Radical reform of civil justice is on the agenda in the wake of Lord Justice Jackson’s preliminary report on costs.
Greater use of fixed costs, an end to recoverability, a conditional legal aid fund (CLAF), a crackdown on referral fees and changes to the cost-shifting rule are among a raft of significant changes raised for consultation.
The 663-page report, published last week, spans a range of costs and procedural issues across personal and commercial litigation. Although Jackson (pictured) expressed few firm views, he gave some indications of his thinking.
Jackson says extending fixed costs across the fast-track would follow the direction of the Woolf reforms, while they could be the answer for small business disputes too. His provisional view is that, in the absence of legal aid, either conditional fee agreements (CFAs) or some other system of payment by results – he did not rule out contingency fees – ‘must exist in order to facilitate access to justice’.
The judge told the Gazette that he sees risk-free litigation as a problem: ‘One possible conclusion, and at the moment I have an open mind, is that success fees and after-the-event insurance premiums should cease to be recoverable.’
With personal injury costs ‘remarkably high’, he said referral fees ‘add to the costs of litigation to no great benefit’, but sees merit in encouraging greater take-up of before-the-event legal expenses insurance where the insurer meets the policyholder’s litigation costs, rather than sells the case to a solicitor.
Jackson finds ‘some attraction in principle’ to a Bar Council plan for a CLAF, which would be a charitable body operating alongside legal aid and CFAs (for which recoverability would need to be abolished), taking a proportion of damages from assisted litigants to fund future cases.
While complete abolition of the cost-shifting rule ‘does not appear to be a realistic option’, Jackson says it may be appropriate in group actions. He also floated the idea of one-way costs shifting in personal injury, so a successful defendant would not recover. The underlying principle of cost-shifting need not simply be ‘loser pays’.
After a three-month consultation, Jackson will make his final recommendations by the end of the year. Master of the Rolls Sir Anthony Clarke – who commissioned the report – told journalists that Lord Chancellor Jack Straw had agreed to give the findings ‘a fair wind’.