Jackson Costs Review – Part 2 – Fixed Fees
Lord Justice Jackson’s Preliminary Report on Civil Litigation Costs is, in general, careful to avoid reaching any final conclusions or making any firm recommendations. However, even from a cursory reading, it seems all but inevitable that the final report will recommend the introduction of fixed fees to all stages of fast track claims.
Jackson LJ writes: “I have canvassed views from my panel of assessors and it is our unanimous view that we should take forward this work and try to achieve a fixed costs system in fast track cases”. This is as I previously predicted. Further, it is suggested that: “There appears to be a strong case for some method of applying fixed costs in fast track cases at all stages” and not just pre-issue as in the current low-value RTA scheme. This is supported by FOIL who the Report states: “believe that there should be fixed costs for all cases within the fast track”. The conclusion reached is that: “It should be possible to devise a fair system of fixed costs for all cases within the new fast track limit”. To avoid one of the perceived problems with the current fixed fee regime, he writes: “I would propose an annual review mechanism to be included in any such fixed costs regime”.
Unlike other elements of his Report, he appears to have reached a clear view already on this issue. Good luck to those who try to persuade him to change his mind.
Of course, the idea of extending fixed costs in fast track cases is not exactly new. That is what was proposed in the Ministry of Justice’s consultation paper: Case track limits and the claims process for personal injury claims. Those proposals were largely abandoned when the new claims process was announced. It remains to be seen whether the final report carries sufficient weight to persuade a (new) government to resurrect this idea. However, at the very least, this Preliminary Report does seem to finally kill off the new claims process. Or, more accurately, delay any implementation of the new claims process pending a decision being taken as to Jackson LJ’s final proposals. The Report states: “It may therefore be sensible to dovetail in the development of the new claims process with whatever implementation programme may be put in place following completion of the 2009 Costs Review. The introduction of two different packages of reforms addressing the same subject matter may be unsettling for both practitioners and court users”. I have previously reported on the problems the new claims process has been facing. The sooner an announcement is made to, at least, put into hibernation the introduction of the new claims process the better. To see how bizarre the whole issue has become read this article on the RTA claims process (external link) from Anthony Hughes, President of the Forum of Insurance Lawyers.
What impact would Jackson LJ’s proposals have if fixed fees are rolled out to all stages of fast track cases? The new fast track limit is £25,000. The Report gives details of “a substantial firm of claimant personal injury solicitors” who informed Jackson LJ that 92% of all personal injury cases which they undertake fell within the bracket £1,000 to £25,000. This would therefore catch the vast majority of such personal injury claims. In addition to impacting on the revenue of claimant solicitors (for better or worse) it would wipe out a large proportion of law costs draftsmen and other costs professionals.This proposal has massive implications.