The biggest review of civil procedure in England & Wales since Lord Woolf's Access to Justice report in 1996, Lord Justice Jackson's Civil Litigation Costs Review makes a number of important recommendations which, if implemented, could result in significant changes to civil procedure. The final report, which was published today, makes a number of recommendations including:
- Success fees and after the event insurance premiums should cease to be recoverable from unsuccessful opponents. Any success fee will be borne by the client.
- "Qualified one way costs shifting" be introduced for certain categories of litigation (current suggestions are personal injury cases and possibly clinical negligence, judicial review, defamation claims) so that the claimant will not be required to pay the defendant's costs if the claim is unsuccessful but the defendant will be required to pay the claimant's costs if it is successful. The qualifications are that unreasonable (unjustified) party behaviour may lead to a different costs order and the financial resources available to the parties may justify there being two-way costs shifting in particular cases.
- The abolition of the indemnity principle.
- Lawyers should be able to enter into contingency fee agreements with clients for contentious business provided that:
- the unsuccessful party, if ordered to pay the successful party's costs, is only required to pay an amount for costs reflecting what would be a conventional amount, with any difference being borne by the successful party
- the terms of such agreements must be regulated to safeguard the interests of clients.
- A scheme of benchmark costs for routine bankruptcy and insolvency cases should be developed.
- The current pre-action protocols be retained but substantial parts of the Practice Direction - Pre-Action Conduct introduced in 2009 be repealed. Costs sanctions could still be applied to curb unreasonable behaviour.
- There should be a campaign to ensure greater awareness of the benefits of Alternative Dispute Resolution but it should not be mandatory for all proceedings.
- There be a "menu" of disclosure options available for large commercial claims (excluding large personal injury or clinical injury claims) where the cost of standard disclosure is likely to be disproportionate.
- Greater case management measures and costs sanctions to control the content or length of witness statements and expert evidence.
- The courts should be more robust in case management by, for example, allocating cases to judges with relevant expertise; the same judge to deal with the case throughout and standardising case management directions.
- For Part 36 of the Civil Procedure Rules, the effect of Carver v BAA be reversed either judicially or by rule change (for further information on this case, please see our alert Winning and losing under Part 36). Also, where a defendant fails to beat a claimant's offer, the claimant's recovery should be enhanced by 10%. It is worth noting, however, that in respect of higher value claims (over £500,000) there may be a case for scaling down that uplift.
The report is both comprehensive and carefully researched. It reflects considerable effort and thought during a remarkably short space of time. As it weighs in at a not insignificant 584 pages (including the appendices!) there will be plenty to digest in the weeks and months that follow.
The report is certainly a timely one, with the current economic climate serving to highlight unease at the high costs of civil litigation. It remains to be seen whether any of the recommendations find favour with the Ministry of Justice who will determine whether to accept or reject them, although the Ministry has already shown itself to be up for change.
It also seems clear that several of the main recommendations will need primary legislation and/or will have budget implications for the Ministry. Although there has been an indication that Parliamentary time will be made available in the short term, and the Government's legislative programme short term is light, it remains to be seen whether, with a general election looming, there will be political appetite for such legislation and/or the report's budget implications.
A copy of the full report can be accessed on the Judiciary of England and Wales' website.