The Woolf reforms have transformed the civil litigation landscape over the past five years. Here, Lord Phillips and top city lawyers weigh up their impact. Grania Langdon-Down reports

Five years after the introduction of the Woolf reforms, the extent of civil cases has changed so significantly that the Master of the Rolls, Lord Phillips of Worth Matravers, says he can no longer see any logic in retaining the dual jurisdictions of the High Court and the County Court, and says it may be time for a single civil jurisdiction.


Speaking to the Gazette after the court vacation, Lord Phillips also maintains it is time to consider contingency fees, particularly for group actions that may involve issues of public interest but where the litigants cannot get funding.


He says there is now reason to recognise that fears about the so-called compensation culture have been 'overdone', with public authorities over-reacting to fears of being sued.


Lord Phillips says: 'We are in a time of change on all fronts. It is not at all easy to predict what our legal scene is going to look like in ten years, except to say it will look quite different - I just hope it is in ways which are improvements.'


In the meantime, he is concerned about 'keeping the show on the road'.


He explains: 'The Department for Constitutional Affairs (DCA) has a lot of interesting ideas about the longer-term strategy [for the courts]. But, meanwhile, we have courts around the country which are under-resourced. We haven't had the technological equipment that Lord Woolf anticipated would be necessary to make the new system work efficiently. We are about to have a new spending round, but nobody is optimistic that there will be any spare money for civil justice.


'All this results in the current structure being pretty creaky, and I have apprehensions whether we are going to be able to continue to deliver efficient civil justice.'


Looking back over the past five years, Lord Phillips says there has been a 'radical' drop in the amount of civil cases being litigated. He is not aware of a 'tremendous public outcry' that people are not getting access to justice. But, he adds, a lot of people are not aware of their legal rights.


'We don't have the research to know how much this drop represents the desirable consequences of Woolf, how much is due to the removal of legal aid and the inability to persuade solicitors to take on work on a conditional fee basis, and how much is due to the front loading of costs.


'I think the fall-off reflects all three, but I am inclined to think the majority is attributable to the revised attitude to the process of litigation as being an evil to be avoided where possible, and to a much more co-operative approach between the parties. In my time as Master of the Rolls, I have seen a quite radical change in the approach of the rival camps of claimants, unions and insurers.


'And a change was certainly needed because, although it really was coincidence that the Woolf reforms came at the same time as changes to funding, the satellite litigation over costs [in conditional fee cases] was threatening to derail the whole system.'


He says the thinking now is to see what business can be removed from the courts - including areas such as debt recovery and housing. 'What is the hard core that is going to be left? Increasingly, it is going to be public law and clinical negligence, although the health secretary would like that out of litigation where possible.


'The DCA is taking a fresh look at which matters should be in court and which should be resolved without the trial process and this calls for consideration about where you have your trial centres.'


So what does that mean for the future of the High Court? He says: 'The restriction in the ambit of cases involving disputes between citizens or companies that actually get to trial coincided with changes in the jurisdiction between the High Court and the county court, so that most cases can be started in either. And if you start a case in the High Court, you won't always get a High Court judge trying it. I think logic drives one to the conclusion that we ought to have a single civil jurisdiction.


'A lot of work coming to the High Court comes in the form of judicial reviews. But disputes between individuals or companies may be started in either and I can't see any logic in retaining this dual jurisdiction.'


Lord Phillips did not expand further. But having a single civil jurisdiction could involve a look at the numbers and levels of judges, and the way in which cases are allocated. It could also mean more opportunities for district judges, as well as opening up rights of audience if the barrier between county and High Court is removed.


For practitioners, the Woolf reforms have largely bedded in well, but inevitably there are areas where they would like to see developments.


For Claire McKinney, president of the Forum of Insurance Lawyers (FOIL), contingency fees are an important issue in the debate over funding 'because they would give claimants a vested interest in ensuring their solicitor's fees are reasonable'. Both she and Clive Ettinger, president of the Association of Personal Injury Lawyers, would like to see rehabilitation flagged up earlier too.


Lord Phillips says: 'Contingency fees are a very big issue and people are becoming more prepared to consider it. We don't have as much data as I would like about the effect of the change in funding. But, obviously, if you have a conditional fee system, it is not going to cater for the action where the chances of success are not great but, nonetheless, it may be in the public interest that it should be brought.


'Contingency fees, particularly in relation to group litigation, render possible access to justice where perhaps at the moment litigants simply cannot get the funding to proceed.'


In its recent report on redress for consumers, the Better Regulation Task Force called on the government to conduct an investigation by May 2005 into whether contingency fees are appropriate for the UK. The government should respond shortly on whether it will do so.


The main concern about contingency fees is that they will fuel the so-called compensation culture - which the task force described as a perception rather than a reality - as damages are increased to take account of the percentage going to the lawyers.


However, Lord Phillips says: 'We now have reason to think our fears about the compensation culture have been overdone. What happened with the introduction of conditional fees was some companies thought they were an interesting form of commercial activity and set about drumming up litigation. Since then, one or two have come badly unstuck and lessons have been learned. The figures show we are not seeing a massive surge in speculative legislation.'


He says there has perhaps been an 'over-reaction' by public authorities and those advising them about being sued. However, he points to the House of Lords judgment in Tomlinson v Congleton Borough Council [2003] UKHL 47, where the judges made some 'fairly dramatic' comments about the restrictions on personal liberty that would be involved if local authorities are held liable for activities individuals choose to carry out.


He too is in no doubt about the 'tremendous importance' of rehabilitation. The Civil Justice Council, which he chairs, has two groups looking at it - a working party that is considering whether there should be a rule change to include rehabilitation in the pre-action protocol and whether there needs to be a practice direction, and a high-level policy group that is bringing together health professionals and representatives of insurers and claimants.


Lord Phillips says: 'We are a long way behind some other countries, such as the US. But that may well be because the damages awarded there are a powerful incentive to do one's best to mitigate the consequences.'


However, he disagrees that there would be any benefit in trying to enforce rehabilitation with costs sanctions. 'It can so easily involve satellite litigation which is of greater complexity than the original evil it was designed to cure - we have seen this with wasted costs orders.'


On the personal injury front, Lord Phillips stands firm in his call - first made at the roundtable run by the Gazette's sister publication, Litigation Funding, earlier this year - that the possible 'de-lawyering' of smaller claims should be examined (see [2004] Gazette, 29 April, 1). It is a stance that has attracted criticism from claimant solicitors. 'I am not suggesting one could impose some kind of embargo on the use of lawyers, but it seems there is scope for the insurance industry to alter their approach to claims to reduce the need for the intervention of lawyers.'


He draws the analogy between someone who has a skiing accident and claims on their insurance and a passenger in a car accident. 'Why do you need lawyers in one and not the other? The answer is unless and until insurers are prepared to treat both the same, the injured passenger is going to need the assistance of a lawyer.'


For Iain Mackie, a litigation partner at City firm Macfarlanes, a key issue of the Woolf reforms is the increasing use of mediation and the considerable variation in the approach taken by different judges.


'There is also a perception that some judges force parties to use alternative dispute resolution (ADR), when what the parties really need is a judicial decision, which just incurs considerable costs on a pointless mediation,' he says.


Lord Phillips answers: 'Judges are all individuals. I am sure there are some who think their job is to resolve disputes and not to twist the parties' arms to make them settle their own disputes. Other judges - and I am one - think it is very desirable to put pressure on parties to try to resolve disputes without the costs of litigation.


'Identifying which disputes cry out for mediation is sometimes difficult but very often it is easy. With hindsight, we get some cases coming to the Court of Appeal where you are absolutely horrified at the amount that has been expended and parties need someone to bang their heads together at the outset and say: "Do you realise what you are letting yourself in for?"'


However, he says the recent Court of Appeal ruling in Halsey v Milton Keynes General NHS Trust and Steel v Joy and Another that mediation should not be compulsory 'seems, at the moment, to be the right approach'.


He adds: 'There is a pilot scheme at the Central London County Court which comes quite close to compulsory mediation - you can decline, but you are expected to give reasons. Certainly, I have seen in the US that mediation as an incident of the civil process is absolutely automatic - it may be something to look at when we have progressed a bit further.'


Another significant area of the Woolf reforms that has come under scrutiny is the role of the expert witness, particularly in the light of the criticisms of child abuse experts highlighted by the cases of solicitor Sally Clark and other mothers whose murder convictions have been overturned. Lord Phillips says: 'These high-profile cases must raise a question mark over the reliability and the weight that should be given to expert evidence and it may be just as well that it does. But I don't think it undermines the principle of it. Expert evidence certainly needs further consideration, including what does and does not have to be disclosed.'


For Jonathan Wyles, a senior litigation solicitor with City firm Reynolds Porter Chamberlain, some legal costs issues still need resolving - for instance, where claimants use pre-action protocols as a 'fishing expedition' for documents and then drop the claim, leaving the potential defendant with the 'very difficult, if not impossible task' of recovering the costs.


Lord Phillips says the Civil Justice Council has made a good start in dealing with costs in lower-value claims with a fixed-costs scheme for road traffic accidents, and fixed success fees both in those actions and also employers' liability accident claims. He says there are still 'real problems' with costs in some of the more substantial cases, adding that options such as costs capping and budgeting need to be considered.


He says the proposed scale of court fees, currently out for consultation, includes some significant increases. 'One proposal which I and the Civil Justice Council approve of in particular is over longer-running, high-value cases which, at the moment, pay nothing by way of fees for the daily use of the court and judge. Yet it seems to me that court fees should be proportionate to what is at stake and the amount of judge and court time being taken up.'


However, mention the Treasury's 'full cost recovery' mantra and he laughs ironically. 'The Civil Justice Council and the judiciary are opposed to that in principle because we believe that the provision of a civil justice system ought to be part of the structure that any civilised country provides for its citizens. But we are not in charge of the finances of the country - perhaps fortunately - and we have to live with the position as it is.'


The past year has seen the relationship between the judiciary and the government in the spotlight as never before over the plans for constitutional reform and over the human rights issues arising in immigration, asylum and security cases. When Lord Woolf 's reforms were introduced, the relationship between the judiciary and the media seemed less volatile.


Lord Phillips says: 'The media likes to present a picture of judges in conflict with the executive. The reality is the Human Rights Act is now in place and judges have to apply the [European Convention on Human Rights] and sometimes ministers don't see the problem through precisely the same eyes.


'I think if the media is constantly slating judges, it is bound to be detrimental to public confidence in the judiciary. At the same time, whenever there is a public inquiry, the call always seems to be for a judicial inquiry because the public will have confidence in it if it is conducted by a judge.'


Lord Phillips is well aware of this - he took over as Master of the Rolls in October 2000, fresh from three years chairing the BSE inquiry. He told a conference in 2002 that one of his first tasks as Master of the Rolls was to address an Association of District Judges seminar on the Woolf reforms; unfortunately, he had been so immersed in BSE that he was the only senior member of the judiciary who did not receive any training on them. So the assessment forms filled out afterwards did not make altogether comfortable reading: 'Bewilderment is not the prerogative of the inferior judiciary,' one delegate reported; 'Content little, presentation good,' another said, finding something positive at least; while a third discovered that 'the appointment of the Master of the Rolls is fairly arbitrary'. Nonetheless, he decided, Lord Phillips was 'a good egg'.


Having been at the coalface since, and especially having presided over an era of unprecedented argument over lawyers' costs, he has certainly made up for his initial difficulties.


Grania Langdon-Down is a freelance journalist