The Master of the Rolls is to appoint a senior judge to conduct a root-and-branch review of the costs system, the Gazette has learned.


Sir Anthony Clarke is set to identify a judge - most probably a Lord Justice - to get the costs review under way at the start of the next legal year and report back by July 2009.



No firm terms of reference have yet been agreed because Clarke wants to see the government's much-delayed response to the claims process and case track limits consultation paper first.



The review, also reported in our sister publication Litigation Funding, will cover issues such as the cost-shifting rule, fixed costs and contingency fees, but Clarke's office has stressed that whoever undertakes it will conduct the review with an open mind.



Any recommendations for change would be made following extensive ?consultation with all stakeholders and having identified the cause of current problems.



Giving the keynote address at the recent Association of Personal Injury Lawyers (APIL) annual conference, Clarke expressed concern over how long the conditional fee agreement system would last 'if, for example, the after-the-event insurance market were to fail. It would then be necessary to consider further other types of funding'. These included a conditional legal aid fund, supplementary legal aid scheme and contingency fees.



He said the approach to proportionality might also need to be reconsidered. 'Should we have a much more robust rule, limiting the amount of costs to be recovered from the losing party to a figure which bears some relationship to the amount recovered?' he asked. 'Do we spend too much time and money assessing the costs?'



Law Society President Andrew Holroyd welcomed the review. 'The costs regime is one of the most significant issues in deciding whether or not to commence litigation and, in some cases, may amount to a significant barrier to access to justice,' he said. 'However, this is a very complex and difficult area and one which needs a careful and open-minded review.'



While backing the initiative, David Greene, president of the London Solicitors Litigation Association, cautioned that it should not be led solely by the judiciary. 'Costs are part and parcel of day-to-day litigation practice (and) need to be examined with the active participation of practitioners,' he said. 'We would ask whether costs can be looked at in isolation from a review of the Civil Procedure Rules more widely.'



APIL chief executive Denise Kitchener acknowledged there were important costs issues that urgently need addressing, but was 'cautious and wary about another root-and-branch review' before the consequences of the government's responses to the claims process and law on damages consultations are known.