More than 100 years ago a judge quipped that English justice is open to all, like the Ritz Hotel. It is questionable how much has changed. Many lawyers today must have cases which, in view of the likely costs, are too risky to run. Despite the best efforts of Sir Rupert Jackson and other modernisers to limit recoverable costs or control budgets, for individuals or small businesses civil litigation (outside simple debt recovery) is often still unthinkable. Perhaps, therefore, more radical thought and experiment may be sensible.
The idea that the loser pays – ‘costs-shifting’ as Sir Rupert calls it – so that the costs risks of litigation are more or less doubled is deeply embedded in our culture, perhaps all the more so as it evolved over a long period of time. Pilford’s case in 1613 ruled that if a man recovered damages, he should also have his costs, although many exceptions remained. By that time the penalty for not paying assessed costs could be a whipping – although, as the historian of English Law Holdsworth tells us, this custom died out after the revolution of 1688. Even the sternest traditionalist giving evidence to Sir Rupert has not called for it to be reinstated.
It is remarkable that in the US, the ‘American rule’ that, generally, costs do not follow the event, went so sharply in the opposite direction when in so many other ways the principles of English common law were followed. But the US became a country where individual rights were much more revered than in the old country. Here we have slowly been catching up – see, for example, the revolution in judicial review that has occurred since the second world war and in human rights more recently. Perhaps it is also time to revisit the working of the English costs rule in a way even more radical than Sir Rupert currently recommends.
In the second volume of his 2009 report (p474), Sir Rupert recorded ‘my overall impression’ that the ‘American rule’ does promote greater access to justice than the ‘English rule’, but at a price: ‘Compared with England, more meritless claims tend to be brought, damages are higher, and rich litigants can cause opponents irrecoverable costs unless firmly controlled by the court.’ In other words, bad claims may be brought in America but good ones may not be heard in England. Is there a way of bridging this gap, while controlling the power of rich litigants?
Suppose, for example, that in a limited area of law costs-shifting was to be abandoned, on a pilot and experimental basis by substantially expanding the extent of the small claims track. Claims already well provided for (in personal injury or clinical negligence, for example) would be excluded. But the change would seek to cater for the sort of contractual disputes which individuals and small businesses would like to bring and would generally be competent to run themselves without too much input from the court. In effect, we would be rewriting Civil Procedure Rules 26 and 27.
It would be interesting to see whether cases initially, perhaps of up to a value of £50,000, lasting, say, no more than two days, could be brought, perhaps often by litigants in person. Lawyers would no doubt participate with bundled advice but would be unlikely to be advocates as costs could not be recovered and the size of the claim would not favour a damages-based agreement.
A sensible part of the pilot scheme proposed would be for an application to the court before issue (and thus at a more reasonable fee) for a ruling on whether a claim could fit into the expanded small claims track. There should probably be no appeal allowed at this filtering stage. The court would consider the relevant matters concerning allocation on the lines set out in CPR 26.8. But in this experimental attempt to blend British and American justice, the guidance would need to be rewritten to give more weight to the circumstances of the parties (as now in 26.8(1)(i)) and the overriding objective (CPR 1.1(2)).
A claimant would need to establish an arguable case and that it lacked the means to bring it on another track, but if these heads were established the matter would proceed unless the court considered it beyond the capacity of the claimant. Such an innovation would be a further burden on the district judges of course, but their capacities are legendary. And a procedure on these lines could at least give the possibility of access to justice to claimants currently excluded altogether.
A cheap tea at the Ritz and with no service charge, perhaps?
Roger Sceats, Surbiton