Are you a Russian oligarch locked in a dispute with a business rival? Welcome to the London courts. Or perhaps you are an A-list actor looking to bring a massive libel claim; or a Prada-clad divorcee battling your ex for a multi-million-pound share in their assets? Come on in and make yourself at home. 

Rachel rothwell

Rachel Rothwell

But what is that you say? You are none of these, just an up-and-coming UK supplier that has been screwed over by its biggest customer. You would like to enforce the contract that you painstakingly drew up. The £250,000 at stake is make-or-break for your business and the livelihoods that depend on it. Sorry, but the courts are not for you. You would not be able to afford the legal costs.

The financial barrier that so many ordinary businesses and people face in bringing a claim is a shameful state of affairs that has been going on for decades. And the 2013 Jackson reforms have failed to solve the problem. Lawyers’ fees are still unaffordable for many, despite the arrival of costs budgeting, with its emphasis on controlling proportionality of costs from the get-go.

Indeed, the mood music for budgeting is now beginning to turn rather ominous, with rumblings that the regime may not last. Last summer, Master Davison of the Queen’s Bench Division was openly sceptical about the merits of budgeting, and let slip that he is not the only judge to be so. More recently, the master of the rolls Sir Geoffrey Vos (pictured) also revealed himself as a budgeting critic. Scarred by the experience of sitting in on a costs and case management hearing in a £100,000 clinical negligence claim that was dominated by tedious budgeting points, Vos suggested last month that it was time to ‘take another look’ at costs management.

But if budgeting were abolished, would it be replaced with something else – and do we need another full-scale review of civil litigation to make the courts more affordable? Lawyers will be relieved to know that there is zero chance of another colossal reform project à la Jackson or Woolf. The senior judiciary regards this approach as much too slow and cumbersome. The future will be all about tweaks and changes in different parts of the system that are brought in as soon as they are ready. These developments will come thick and fast, because the energetic Vos is determined that the current state of play, where ordinary people and businesses are priced out of justice, cannot continue.

So what changes are we going to see? On the costs front, an extension of fixed recoverable costs (FRCs) is earmarked for launch this autumn. FRCs will then apply to nearly all civil cases worth up to £100,000. On the face of it, that should bring down costs and give financial certainty to litigants. But in practice, the benefits will hang on how the market responds. Will solicitors restrict themselves to FRCs, or will they decide they need to charge something extra to their client, which will no longer be recoverable from the losing side? That could make litigation even more expensive than previously. But however FRCs play out, at least they will strip away the need to spend time preparing and revising budgets.

More broadly, you need more than changes to costs rules to solve the problem of prohibitively expensive justice. That is why we are also seeing a judicial push towards mediation; and, much more significantly, towards digitalisation.

Technology is the only real answer to making justice genuinely affordable for all. Vos envisages an entirely digital online justice system for civil claims, including family and tribunal cases. He has tasked the courts service with developing a system that is easy for lay folk to use; with ‘integrated mediated interventions’ at every stage. It will inevitably involve as little input as possible from lawyers – because that is the best way to keep a lid on costs.

If all this sounds rather depressing for lawyers who act on small or medium-sized cases, what about pivoting towards the big-ticket work? Parties’ pockets are deep, fees are high, and – if the claim is worth more than £10m – costs budgeting does not even apply.

Another world indeed.

 

Rachel Rothwell is editor of Gazette sister magazine Litigation Funding, the essential guide to finance and costs.

For subscription details, tel: 020 8049 3890, or click here.

Topics