How fixed costs are looking

Speaking yesterday, Lord Justice Jackson was keen to defend the logic behind his January 2016 call for an extension of fixed costs.

He pointed out that fixed costs save all the expense of budgeting, ensure proportionality, and are - according to research undertaken for his 2013 final report - desired by small businesses.

There’s no doubt that fixed costs are indeed going to spread beyond their current very limited remit. But the question is, how far?

Back in January, Jackson was proposing that fixed costs come in throughout civil justice for all cases worth less than £250,000. He also said it could happen by the end of this year.

But the more things develop, the more one gets the sense that the reality is going to be far less radical.

The 2016 timeframe is clearly never going to happen. For one thing, government has chucked a bucket of ice onto anything not directly related to a certain referendum – and there is simply no way the new regime could be up and running by the end of the year.

But one also gets the impression that the quarter of a million threshold is quietly being toned down.

Government has always been supportive of the ‘principle’ of a fixed costs extension, but has not specifically endorsed the £250,000 level. Speaking at the Association of Personal Injury Lawyers annual conference this month, Lord Faulks said the same thing again.

Earlier this year, the lord chief justice said that while fixed costs ‘ought to expand’, this should be incremental rather than done all at once.

Many sensible lawyers are calling for a much lower threshold to start with; for example, at yesterday’s event, Nicholas Bacon QC said he believed the starting point should be £25,000 – or £50,000 as an absolute maximum.

The costs barrister also argued that the costs figures set should be based on actual evidence – drawing on real figures from detailed assessment (and then of course knocking a bit off because the aim is to reduce costs, not maintain current levels). He highlighted the danger of setting costs too low, which will end up costing the client.

No doubt claimant lawyers attending the Civil Justice Council meetings being held to explore the fixed costs initiative will be strongly making the case for starting low, and seeing the effect of that first – though the Forum of Insurance Lawyers favours the £250,000 limit.

I am told that the first CJC meeting on the topic, which took place in March, did feel like a ’genuine consultation’.

Though Jackson did not refer yesterday to what the threshold of the extended fixed costs will be, in a paper accompanying his previous speech - to the Law Society’s Civil Justice Section in April - he said: ‘In view of the vociferous opposition to fixed costs, it is uncertain when and up to what level fixed costs will be introduced.’

So all in all it seems safe to assume that what claimant solicitors might have regarded as the nightmare scenario of plunging into fixed costs in all cases worth up to £250,000 is not going to happen.

But perhaps the spectre of that has made a starting point of £25,000 seem much more acceptable.

Rachel Rothwell is editor of Litigation Funding magazine