Commercial litigation is heading towards fixed costs, the judge in charge of the Commercial Court warned last week.

Mr Justice Flaux (pictured) told litigators at the Law Society’s commercial litigation conference that he suspected a tariff of recoverable costs would be introduced in the commercial arena.

He said: ‘My own view is that where we are heading is fixed costs; [with] a tariff for what is recoverable. The whole system of [costs] assessment will just go out of the window’.

Flaux said he was not ‘advocating’ fixed costs and had ‘not the faintest idea’ what the tariff should be based on. ‘How do you assess how complex a case is? Certainly not by how much money is at stake,’ he said.

The judge noted that in the Commercial Court, cases ‘do not fit into any type of mould’, making it hard to make fixed fees work. He said he would prefer to see costs-capping orders used more to control excessive costs, adding that ‘anything other than a fixed costs regime would be appropriate’.

Speaking on the same day at a Conservative party fringe event, justice minister Lord Faulks appeared to lend weight to the prospect of wider use of fixed fees (see p6).

At the Law Society event, Mr Justice Flaux also addressed the issue of costs budgeting. The judge said budgeting could be a useful way of controlling costs in some types of case, for example where a party of limited means brings a claim against a number of well-resourced defendants. But he said budgeting sometimes seemed to be a ‘rubber-stamping exercise’, with a ‘conspiracy of silence’ between two sides reluctant to challenge one another’s budgets.

Martin Cox, head of the national costs team at defendant firm Kennedys, told the event that ‘a regime of fixed costs is inevitable’.