Summary and implications

Widespread reforms to the ways in which civil litigation is paid for were recommended by Lord Justice Jackson in his 557 page report published last week with the aim of reducing the sometimes disproportionate cost of going to court.

It is yet to be seen how and when these new proposals will be introduced, but change is in the air and it is likely to be fundamental.

Three highlights are:

  • Fixed costs will become much more widespread; and in many cases the costs recoverable by (or from) an opponent will be capped. This will greatly reduce the risk of costs becoming disproportionate to the amounts at stake and encourage more cost-effective dispute management.
  • Scope for risk and reward sharing between clients and their lawyers will be encouraged by the legalisation of 'contingency fees' - where a successful claimant's lawyers can be paid an agreed proportion of the amounts won. Conditional fee agreements ('no win – no fee') will, however, be reined in, with defendants no longer facing disproportionately high 'success fees' of their opponents' lawyers.
  • Introducing flexibility to the current 'loser pays' system (where the unsuccessful party pays the costs of the successful party) by, in certain cases, shifting costs to the successful defendant.

Nabarro's approach to the reforms

We recently conducted a wide-ranging survey of our clients' needs and expectations recognising the requirement for cost certainty and risk minimisation in civil disputes. They are, unsurprisingly, seeking a commercial approach to costs. We have responded by continuing to develop a range of flexible fee arrangements. Also, we have a robust approach to communication and project management, which is often the key to controlling costs in our experience. Jackson's reforms will potentially enable us to offer even more options and we will outline these in more detail as soon as we know when and how the reforms are going to be implemented.