Putting in the fix

I wanted to write an article about fixed recoverable costs and focus on the impending dread we are all feeling as practitioners about these changes. Where to start and how to keep it concise? You could write a book on all the issues I have gathered together over the last few weeks as I discuss this with fellow litigators. In this article I will try to pick up on just a few points.

First, I am flummoxed not just by the regime itself but also how the principal institutions of state view these rule changes. Every document and speech is littered with the same point – they will improve access to justice - but there is never any explanation of how. In contrast, I am receiving point after point from practitioners telling me why in reality it actually damages access to justice. Some 80% of our members at a recent webinar agreed with this and only 2% disagreed.

The main point to make is that the certainty you get from knowing what trifling sum of money your client will recover from the other side if they win actually introduces an unreasonable level of uncertainty, for many reasons. One reason is because you cannot provide legal services for such low amounts, and so you are not going to be able to control your client’s shortfall like we currently do. As you know, with the current system you could give your client an estimate and explain that they are likely to recover a percentage of that estimate. That was hard enough to manage at times, but these new rules are almost impossible to work with because your percentage shortfall will be much greater and will differ between stages, so you have to really know how to work the tables. That can be tricky in itself.

In my view, your professional indemnity insurance cover should actually prohibit you from fixing your fee to only what is recoverable when a figure is unworkably low, and nor should the Solicitors Regulation Authority allow it. For example, how can you possibly charge just £400 from close of statements of case to witness statements in proceedings for any claim without running the risk of being professionally negligent? This is just one example of a ridiculously low recovery for a particular claim at a particular stage. There are of course many others. Hundreds, if not thousands, in fact.

How can you possibly afford to charge less than a car mechanic, not be negligent and not crash the claim? In my view you just can’t. What you’ll be doing is putting learners behind the wheel of your client’s claim and hoping there are no accidents. This practical problem of providing proper representation which is in your client’s best interests directly damages access to justice because the sums in the tables are too restrictive.

Second, I am really disappointed and disheartened by all of this. It is depressing to see the system being rebuilt in this way and I feel let down on a number of fronts. I certainly feel like the speed of implementation has caught us all cold. Yes, we knew it was coming, but until it was here who really had the time to evaluate the detail? Most of us are busy working.

The entirety of the consultations on this topic at the time they took place were whether we accepted the concept or not - not whether it actually worked. You do not focus on any detail when you reject something outright, you just reject it. This is what we all did back in 2017 and it fell on deaf ears. There was then a long period where nothing happened and the fight in us dissipated. Now, we have been kicked back into our trenches, and as each day passes and we piece together how the rules will work in practice, we are recognising the volume of problems.

The problem is we are now running out of time to do anything constructive. How is that fair? How does that protect the rule of law and access to justice? We saw the draft for the first time at the end of April, and by the end of May both houses have had it laid before them. Then, on 6 June the Secondary Legislation Scrutiny Committee considered it, which triggered the 40-day objection period. I imagine many reading this had no idea about the timeline or the process. I only found it online last Friday and figured it out.

Third, I am frustrated myself because it was only last Friday that I spotted a rule change that I believe really does go well beyond the Civil Procedure Rule Committee’s powers. The committee is not there to introduce rules that change the law. They are only there to change rules relating to practice and procedure and when they do make a change they need to consult appropriate people. In my view new rule 45.1 prohibits contracting parties from agreeing at the outset to recover their full costs in the event of a dispute. I suspect the banks will have something to say about this. I suspect they did not have a clue this was coming and it is probably a drafting mistake. I didn’t spot it initially, but then why would I when there are pages and pages of rules to read with no guidance notes attached? You really have to scrape the logic applied to this new set of rules from snippets of minutes and reports produced over many years. In fact, all the explanatory note to the statutory instrument tells us is that there is absolutely nothing of interest to see here, that it will all be great for access to justice and everyone will be better off as a result. I have no idea how the Ministry of Justice held such a view, when they submitted the SI. It really couldn’t be further from the truth when you work your way into the detail.

All of this either required a careful debate or, if that was not possible, the introduction of these rules as a pilot scheme so we could all take stock and properly review it in a year. We have been given neither to work with. I do not understand why we would deal with such important changes in the way we have, leaving it to a handful of people to get it right when it covers nearly every single type of civil claim. I am writing this article because time is running out so I wanted to set out my concerns in writing, particularly my concern about rule 45.1. We need answers.

In what might prove to be a last ditch attempt to be heard, I have written to committees within parliament which are responsible for protecting our interests when it comes to implementing secondary legislation, such as these rule changes. I have explained the issues to them and asked that they file an objection within the statutory 40-day period if my points seem valid. This ends on 12 July. If you wish to support this then please email hlseclegscrutiny@parliament.uk and refer to the The Civil Procedure (Amendment No. 2) Rules 2023. Ask them to raise an objection before the 12 July and perhaps send them the link to this article, which will save you time scratching your head like I have trying to figure all of this out!

Consultant solicitor James Perry is chair of the Law Society’s National Dispute Resolution Section. He is writing in a personal capacity