Crude cost-capping in multi-track civil litigation cases would be 'rough justice', but it could be the only method of reining in the expense of court-resolved disputes, the Master of the Rolls said in Auckland.

Lord Phillips told delegates at a roundtable discussion on civil justice issues, that he saw a situation where claimant lawyers would be told by trial judges they had a fixed budget for case costs. 'Lawyers would be told: 'You've got £20,000 to spend and that's it.' It would be rough justice, but we must contemplate it.'


Napier: clients like CFAs

Further controversial views came from Senior Costs Judge Peter Hurst, who gave a strong steer that the system of recovery in conditional fee cases should be reviewed.

Judge Hurst told the meeting: 'It must be faced that we may have to change the system of allowing success fees and insurance premiums to be recovered.' He said that many claimant lawyers using conditional fee agreements (CFAs) would find that suggestion to be 'heresy', but that he was in favour of returning to the original CFA model where success fees and premiums were not recoverable from the defendant but were paid out of damages.


The system also drew fire from a leading member of the Civil Justice Council, who described the method of funding as 'daft'. Professor John Peysner of Nottingham Law School said the system was a poor substitute for legal aid, and defendant insurance companies had set out to frustrate CFAs since their inception.


He backed Lord Phillips's prediction that there would soon be a system of cost budgeting and capping in larger civil trials, while there would also be a move towards fixed fees for all fast-track cases, which are actions valued at less than £15,000.


However, former Law Society President Michael Napier defended the CFA system. He accepted there were difficulties, but said clients were, on the whole, in favour. 'As long as they [CFAs] are explained clearly, clients like them,' he added.


Lord Brennan QC of Matrix Chambers, London agreed. He said the problems with CFAs are economic in nature and for lawyers and insurance companies to resolve, though he was less enthusiastic at the prospect of lawyers budgeting for costs - 'they haven't been trained to do so.' Likewise, Lord Brennan feared that fixed fees in fast-track claims could become 'a vehicle for anti-competitive practices'.