The defendant costs specialists

Predicting when costs are predictable

By on May 26, 2016 | 1 comment

Lord Justice Jackson’s provisional view is that if there is too be an extension of fixed recoverable costs, it should, at least initially, be introduced for all claims up to £250,000:

“The first question is whether we should be fixing costs for all civil cases (like Germany and New Zealand) or just for the fast track and the lower reaches of the multi-track. This is a policy decision for others. I would favour the latter course (as recommended in my Final Report), but I acknowledge that some favour the former course. There are two particular reasons why I favour adopting the latter course: (i) Switching to a totally fixed costs regime for all claims, however large, would be too great a change for the profession to accept, certainly in the short term. The justice system only functions because of the high level of support which the profession provides.”

It is difficult to reconcile this view with two of the key justifications for fixed fees, namely predictability and an end to the need to expend time and trouble time recording all work.

Many claims are pleaded as being worth in excess of £250,000 but subsequently settle, for a variety of reasons, for a fraction of this amount.  Where is the benefit to claimants or defendants of knowing that the costs might be fixed if the claim settles for £x but will be entirely at large if settled for £y?

Secondly, if the question of whether costs are fixed or not fixed is dependent on the actual future, and unknowable, settlement value, parties will have to continue to painstaking record all time to allow for the possibility that the costs will not be fixed, notwithstanding that this work will often prove to be wasted when the matter settles for under £250,000 (or whatever figure is used).

    1 Comment

  1. Absolutely. And the converse is also true. In cases worth up to, say, £30,000.00 I would say that claimant solicitors would actually favour fixed costs because they then have a certainty as to what they will receive and therefore what they will earn out of the case. As it currently stands, proportionality is too big a risk so fixing costs in claims up to £30,000.00 would actually be a positive thing.

    For anything above that, you are quite right, claims can start off being worth any sum and, as the evidence evolves throughout, the claim can either be worth significantly more or significantly less without altering the level of essential work that has to be done to prepare a case for trial.

    I think if fixed costs were sold to the profession in this way then, actually, there would be more solicitors, both claimant and defendant, willing to tempt the waters of the brave new world than there currently are.

    If LJ Jackson wanted to create a debate, as he now claims was his intention, he has certainly achieved that but he has done nothing to approach this tentative issue in a meaningful way that will benefit all stakeholders in litigation; it can be done but it must be done right.

    Chris

    26th May 2016

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