“A strategic and holistic look at costs” – a new consultation from the Civil Justice Council
UK & Europe
Insurance & Reinsurance
On 13 July 2022, an event was held by the Civil Justice Council (CJC) to discuss the upcoming costs consultation. The event was attended by several colleagues at Clyde & Co with head of costs, Paul Wainwright, invited to contribute to a panel discussion on ‘the future of digital justice and the pre-action protocols’.
You can read more on the upcoming consultation in our recent insight here.
A number of interesting observations and discussions were had during the day, here are our key takeaways:
1. Radical change... in time. It is clear from the scope of the CJC consultation that radical change is proposed but there appeared to be an acceptance that reform of this nature should be incremental due to the unintended consequences;
2. There was much discussion of the direct and indirect impact of the extension to fixed costs with the fixed recoverable costs consultation happening in April. One housing lawyer said it would devastate access to justice as the cap on costs, coupled with publicly funded fees, would mean this work was unviable. There was broad agreement that the extension to fixed costs was a good idea in principle, but the representatives of the bar and some claimant lawyers were keen to highlight the unfairness of a rules based indexing mechanism that would uprate fees annually;
3. The CJC is clearly looking at radical reform to pre-action processes and the line between contentious and non-contentious work will continue to blur as a consequence. The room was in near total agreement that the Solicitors Act 1974 needed to be re-drafted and whatever the outcome of the CAM Legal Services v Belsner 2022 decision later in the year, these calls will grow over the coming months. The CJC and the Ministry of Justice (MOJ) are giving serious consideration to the time when costs shifting starts in a claim (in a significantly more onerous pre-action protocol, it was suggested that defendant’s should have the ability to recover their costs prior to issue) and the compatibility of protocols and non-contentious fee arrangements;
4. Prior to the conference, the mood music was that costs budgeting may be dead in the water, however, his Honour Judge Lethem made the point that if you don’t prospectively costs manage, you need fixed costs to be expanded significantly and this point was accepted and understood by the attendees. It appears that the CJC see the value in cost management and for those cases where fixed costs are not appropriate, they accept (with some changes) that it broadly works as intended;
5. There was a lively discussion about solicitor’s guideline hourly rates, albeit there was no consensus on what should be done about the rates and how, if at all, the underlying basis and rationale for the figures should be modified. Our belief is that in the absence of any real alternatives, guideline rates are here to stay albeit their impact will be limited somewhat by the expansion of fixed costs;
6. Access to Justice, access to justice, access to justice were the final words of Lord Justice Briss, Deputy of Civil Justice, when summing up the conference. The CJC are very alive to unintended consequences of sweeping costs reform which is why changes will likely be incremental rather than a big bang.
The CJC will be running several online seminars before the consultation closes at the end of September. We will be considering the wider impact of the consultation over the summer, concluding with a webinar in September.