At the end of last month, the government announced what many had suspected for a while; that it is not going to introduce a ‘costs council’ of lawyers and other experts that would have been tasked with ensuring that fixed costs, and the guideline hourly rates used by courts in assessing costs, are set at the right level.

The Ministry of Justice has also disbanded the independent entity that currently advises on hourly guideline rates, the Advisory Committee on Civil Costs, because it is keen to trim down the number of advisory bodies. The body was set up in 2007 and generally considered to have a good understanding of law firm costs.

Instead, the ACCC’s role will be passed to the Civil Justice Council, another independent body which is expected to set up a sub-committee of experts to look at the guideline rates, and provide other costs-related advice to the MoJ ‘from time to time’.

But significantly, without the introduction of a costs council, everything apart from the guideline hourly rates – for example, fixed fees – will fall outside the scope of the new CJC committee, and will be dealt with in the first instance by the lord chancellor. Should lawyers care about any of this? Yes they should; especially if and when fixed fees become introduced throughout the fast-track, as they eventually will (though no one knows when).

The costs council was intended to ensure that the fees remained at a sensible level. Jackson wanted it to build up a macro picture of the costs landscape, monitoring and tweaking costs on an ongoing basis, looking not just at lawyers’ costs, but also issues such as the cost of medical reports. It would have ensured that fixed fees were changed to reflect inflation.

True, the MoJ never promised that it would follow through on Jackson’s plans for a costs council. Back in November 2010, in its response to Jackson’s final report, it said it would ‘need to consider what type of supervisory role might be needed in any new regime and how this role could best be discharged at minimum cost’.

And it was clear from remarks made by then master of the rolls Lord Neuberger at last year’s Association of Costs Lawyers conference that the judges were worried that a costs council was in doubt. As I blogged at the time, Neuberger warned that ‘one big push every 10 years or so to meet a crisis is neither a proper nor a sensible way to deal with the problem of litigation costs’, adding: ‘It is not sufficient to sit back and let a system get progressively out of kilter and act only when continuing to do nothing ceases to be a realistic option.’

Let’s hope that is not what is now going to happen.

Rachel Rothwell is editor of Litigation Funding magazine, providing in-depth coverage on costs and the financing of litigation.

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