Jackson Reforms – One Year On

We are now over a year on following the significant changes to the Civil Procedure Rules, Practice Directions and the implementation of The Legal Aid Sentencing and Punishment of Offenders Act 2012. Who would have thought this time last year that the MP on the lips of the legal profession would be the MP for Sutton Coldfield, rather than Chris Grayling?

The changes have brought about the most fundamental shift in legal practice since the introduction of the Woolf reforms in 1999 and, only 1 year on, we have seen some rather substantial ripples spreading across the legal landscape.

It was inevitable that the reforms would take some considerable time to bed in, a fact acknowledged by Sir Rupert recently. Mr Justice Ramsey, tasked with the implementation of the reforms recently conceded, at an event in which Ontime’s Sharon Denby appeared on the panel, that there had been “teething problems” but a full five years would be needed to assess whether the reforms had been a success.

The unfortunate situation is that we will, by now, all know, or know of, someone who has had the misfortune, rightly or wrongly, of being ‘Mitchelled’.   The amendment of the rules for relief impose a much steeper and more difficult mountain to climb, should a party to litigation fail to comply with a rule, order or practice direction. Whilst there is a clear will within the judiciary (Lord Dyson MR having himself confirmed such) to make compliance with the rules and orders more strict, there has been a whiff of common sense in recent decisions clarifying that trivial breaches do not justify such  draconian sanctions as strike-out and that parties who seek to use such as a nuclear weapon within litigation could, themselves, be hit with adverse costs orders.

Proportionality was a major factor within the reforms, no greater evidence need be sought for this than the appearance of the word proportionate three times within the overriding objective at CPR 1.1. The amendment of the CPR to what is now Part 44.3 and the abolition of the Lownds test should have been the most significant reform introduced, though with the transitional provisions in place, the impact is yet to be properly felt. There is little guidance on what is now considered proportionate and I would expect a tranche of litigation over the meaning and application of the term and revised test. I expect proportionality to be thrown about as a generic objection to costs, both in detailed assessment proceedings and in budgeting, until such time as there is firm and reasoned guidance from the Court of Appeal or Supreme Court.

Provisional assessment of bills under £75,000.00 and the associated capping on the costs of assessment (to £1,500.00 plus success fee, plus vat and any court fees) has had a significant impact on the way costs are being dealt with. In addition to the changes to the CPR governing points of dispute and replies,  this has led to a shift in the attitude of paying parties as the risk in costs of proceeding to assessment has greatly reduced and the opportunity for the receiving party to provide submissions, either via replies or orally, has been significantly diminished. This has led to a significant delay in settlements and will inevitably take up more of the court’s time. I have experienced great variance regionally but in general provisional assessments are not being listed within the 6 week period envisaged in PD 14.4(1). There is also a considerable amount of inconsistency in the way the bills are being assessed and more training for the judiciary is needed, although with the cuts to court funding, it is sadly unlikely.

Costs Budgeting has also had a major impact on the profession, with greatly varying results. I have had involvement with the pilot schemes so was prepared to commence battle, though it seems sadly the majority of the profession and judiciary was not. Whilst judges have had some training it is clear to me that much more is required and a complete change in culture, which will no doubt take some considerable time, is required. Some judges have been reluctant to deal with budgets at all (there has no doubt been some savvy listing so there is conveniently not enough time) whilst others have clearly not understood the function of the costs management hearings. Docketing, had it been introduced as recommended by Sir Rupert would clearly have helped, so one can only hope that such is somewhere on the horizon.

Like judges, some Defendant solicitors have been taken by surprise by budgeting and been averse to discussing and attempting to agree budgets prior to the hearing. Dare I say it, budgeting can be a satisfying and worth-while exercise with parties who prepare and approach the pre-budget discussions properly and judges who deal with budgets appropriately. Particular features of the budget should not prevent discussion or agreement and it is worth considering the comments of RCJ Lethem (who was the course director at the judicial college responsible for training the judiciary in costs management) “Judges are unlikely to be too concerned with charge-out rates. They do not want to get involved in Wraith arguments”.

It is clear that budgeting is here to stay, so the sooner parties and the judiciary embrace the process the better. Proper preparation of the budgets, effective and progressive negotiations beforehand and expert representation at the hearings could mean the difference to your client obtaining a budget that can be operated within to secure the remedy they seek, or a potential negligence claim against the solicitor if not.

It was inevitable that the reforms would take the unprepared by surprise, would take some considerable time to bed-in and would be found to be lacking in some areas when put into practice (DBA anyone?). However, the reforms, whatever subsequent tinkering is done, are here to stay. With the uncertainty of proportionality, limited opportunity to make representations in provisional assessment and the complexities of budgeting, what is clear is that thorough preparation, drafting, negotiation and advocacy, as offered by Ontime, are all the more important.

What are your thoughts on the Jackson Reforms so far?  We would love to hear from you.