Calls by Lord Justice Jackson to introduce fixed costs for civil claims worth up to £250,000 have been majorly condemned by the legal profession.
Lord Jackson made the suggestions during a speech at the Insolvency Practitioners’ Association last week, calling for recoverable costs to be fixed in all claims valued at up to £250,000.
The judge argued the present level of costs and complexity of civil litigation has evolved over time and that shifting costs and the system of hourly rates, creates a civil justice system which is ‘exorbitantly expensive.’
He said the profession is now more willing to accept fixed costs than in the past, due to the ability to dispense with costs budgeting, while the fixed costs regime for fast track personal injury cases is ‘working reasonably well’ as evidenced by high levels of personal injury claims in the fast track and widespread advertising for claimants.
He added: ‘We now have enough experience to devise a coherent scheme of fixed costs for the whole of the fast track and for the lower reaches of the multi-track. The time for doing that has now come.’
Fieldfisher’s serious injury sector head, Jill Greenfield, tells Legal Business: ‘Jackson’s proposal takes a completely unrealistic view on how these cases are run. Some will settle quite quickly but often they are hard fought and complex, and defendants aren’t always easy to deal with. Placing arbitrary limits on costs is grossly unfair if you’ve suffered serious injuries and are facing an aggressive defendant. Jackson seems to have taken an evangelical approach – because for every case you prepare for a mini war.’
Law Society president Jonathan Smithers said while the body supports the principle of fixed costs for lower value and less complex cases, it is ‘extremely concerned at the proposal that costs should be fixed for all claims up to £250,000. This represents a tenfold increase on the current limit for many claims. The application of fixed costs for highly complex cases is likely to be totally inappropriate and would raise significant questions about the ability of many people to access justice.’
He added that while Lord Jackson does not speak with the authority of the government, his views were clearly of huge interest.
Bar Council chair Chantal-Aimée Doerries QC echoed the Law Society’s sentiments, and said: ‘Where litigation is straightforward, fixed costs may help to resolve disputes more efficiently, but designing and implementing such a scheme will require very careful thought to avoid unintended consequences. Large corporations and governments may well be willing to spend large sums of money – beyond what is recoverable – on legal disputes with individuals or smaller corporations whose costs are fixed at a much lower rate. Instead of levelling the playing field, this proposal could tilt it further in favour of big business and the state.’