Not since Lord Justice Woolf started his review, Access to Justice, in the late 1990s has there been so much interest in the civil justice system.
The issue has come to the fore recently thanks to Lord Justice Jackson’s review into civil costs, something which the Forum of Insurance Lawyers has been actively involved in. I have no doubt that Lord Justice Jackson will carry out an independent and thorough review.
However, there are a number of different bodies also looking at aspects of the civil justice system. The wide range of reviews being undertaken includes:
- The Ministry of Justice review of the claims process for road traffic accident claims;
- The review of guideline hourly rates by Professor Nickell;
- The Law Society’s review of conditional fee agreements (CFAs);
- The Law Society’s review in relation to multi-track costs; and
- Lord Gill’s review of the Scottish civil courts system.
It is evident that these reviews all centre on the issue of costs which, while understandable, is a little concerning. While we should applaud efforts to reform the system, what the industry needs to avoid is a series of recommendations which could in fact conflict with one another and cause confusion. So why does cost continue to be such a big issue?
The entire landscape of legal costs changed with the government’s removal of legal aid from the vast majority of civil cases. Looking back at the various changes that were introduced as a result, it is clear that this has been the single most influential factor in what has become known as the costs wars. Key developments of note include the CFAs order in 1995, the government’s intention to allow CFAs in the majority of civil proceedings in October 1997, and the introduction of part 2 of the Access to Justice Act in 2000 (which allowed the recoverability of additional liabilities in the form of success fees and insurance premiums). Quite simply, the stakes have become very high.
Unfortunately, the lack of guidance around the level of success fees resulted in some high-profile court disputes (namely the House of Lords case Callery v Gray in 2001) and since then we have seen no end of technical challenges to the initially complex rules surrounding CFAs, success fees, and after-the-event insurance policies. The challenges themselves have been very expensive and have inevitably increased the overall legal costs associated with what were once arguably straightforward disputes.
Clearly, this remains a key issue and one that needs to be resolved, but if the current reviews result in significant changes to the cost regimes, are they are going to be for the better? Some of the issues that have arisen highlight some of the complexities of the task.
For example, Professor Nickell’s attempts to reform the guideline hourly rates highlight the difficulties of having a ‘one cap fits all’ approach. Nickell attempted to explain the differential in terms of remuneration. But it is important to remember here that you are not comparing like with like – the business models of claimant and defendant firms are entirely different.
On the other hand, while negotiations around the MoJ process review have seen significant areas of agreement and a desire to improve the current system, areas of conflict must be resolved if a new process is to be introduced. The last thing the industry wants is to become entrenched in disputes, leading the market into a situation of uncertainty for practitioners, litigants and insurers alike.
So what can we learn from these reviews, and the problems that have been raised in the past? First, we need to ensure adequate communication among the stakeholders. Second, remember to concentrate on the discrete areas. And lastly (dare I say it) someone, somewhere, ought to take a coordinating or leading role.
Anthony Hughes is president of the Forum of Insurance Lawyers