Big questions on fixed costs for civil litigators

Lord Justice Jackson’s review of fixed costs is now firmly underway, and interested parties have until 30 January (thanks to a last minute time extension) to make their views count by submitting evidence to the review.

The most obvious question on lawyers’ minds is, how much will the fees be? Even Jackson doesn’t know the answer to that yet. But I certainly wouldn’t expect the final figures to be the same as the ‘grid’ the judge put out last January. Jackson always made it clear that those numbers – lambasted by claimant lawyers as far too low, while defendant lawyers complained, slightly less vociferously, that some of them were too high – were only a starting point, to spark debate.

The final figures should be as evidence-based as possible, and indeed members of Jackson’s review team have been sifting through costs budgets approved by the courts for different types of case, which will surely help to inform any final figures. Of course they might want to skip over anything from 2013, when costs management had an atrocious start and the judges had no clue how to deal with it.

Lawyers in every sphere of civil litigation will argue that their area is unique, there is no such thing as a typical case in their field, and there is too much disparity for fixed fees to work. But I suspect Jackson inwardly rolls his eyes every time a lawyer makes this point – he has heard it many times, and he isn’t swayed by it.

Fixed fees will be coming throughout civil litigation, like it or not. Rather than arguing against the concept, lawyers will be better off focusing their energy on providing the relevant data to ensure the fees are pitched at a level that allows them to stay in business.

Will the level of fee be linked to the amount of damages at stake? Many assume that it will, but no decision has been made on that yet.

Linking the fee to damages can be particularly problematic in some areas of law - such as actions against the police - where damages are low, but important public policy issues are at stake.

Ironically, from the claimant perspective costs management is actually working quite well now in this field, as judges are tending to apply the non-monetary factors in the new proportionality rule to approve claimant budgets as proportionate, despite the high costs compared to financial damages. So it ain’t actually broke, but it is still destined to get fixed along with everything else.

Jackson must decide whether to provide escape routes from the fixed costs regime, and if so, when. Under what circumstances will he allow lawyers to pull a Houdini and slip out of fixed costs? Perhaps this is the way to achieve justice in cases where there is some wider principle or public interest aspect to a claim, but fixed fees are not economically viable to bring the case.

But if escape routes were permitted, would they be overused, or abused?

There are so many questions up for grabs in this review. But the profession will not be held in suspense for too long – Jackson is due to file his final conclusions this summer.

Rachel Rothwell is editor of Litigation Funding

Follow Rachel on Twitter: @LawJourno