Phillips makes major costs reform pledge

The end of the indemnity principle and introduction of a fixed costs regime for fast-track claims have moved a major step closer after the Master of the Rolls pledged to push both forward.Winding up a high-powered costs forum at the weekend held by the Civil Justice Council - of which he is chairman - Lord Phillips of Worth Matravers said he recognised the 'almost unanimous voice' of delegates in favour of abolishing the indemnity principle, rather than modifying it, as some judges suggested.He promised to press the Lord Chancellor's Department (LCD) to find parliamentary time for the primary legislation to achieve this.

The rules committee - which was asked some time ago by the Lord Chancellor, Lord Irvine, to work on abolishing the principle - maintains that legislation is required to achieve this.But an LCD spokeswoman said: 'The government has made it clear that it wishes to see the indemnity principle tackled...

and looks forward to proposals from the Master of the Rolls on how this might be achieved through rules of court.'If the rule is abolished, solicitors will be able to recover reasonable and proportionate costs regardless of the terms of the retainer with their clients.The Gazette's sister publication, Litigation Funding, was given exclusive access to the forum on the basis that no other delegates were identified.Lord Phillips said the majority of delegates - from every side of the costs issue - supported the introduction of fixed costs on the fast-track, but added that it would be difficult to construct the regime.

He has asked Professor John Peysner of Nottingham Law School to compile proposals for a small committee to work on this.

The committee would report in a year's time at a similar conference.The LCD spokeswoman said: 'We look forward to receiving details for following up the forum and to working with any committee established to look at costs.'Law Society President David McIntosh spoke for both claimant and defendant solicitors this week when he said that abolition of the principle was overdue.' Mr McIntosh also supported the idea of fixed costs, saying he was 'sympathetic to any steps which contribute towards sorting out the present appaling mess over costs'.l The Civil Justice Council costs forum is reported in full in the December issue of Litigation Funding.

By Neil Rose