Two years of the Jackson reforms

We are now just a whisker away from the second anniversary of the Jackson reforms, but I suspect most solicitors do not feel like putting candles on a cake.

No doubt claimant lawyers will fondly remember this period back in 2013, when they were frantically scrabbling round for after-the-event cover, and their ATE insurers hadn’t slept for weeks – and were busy making all the hay they could before the sunshine dipped beyond the horizon for good.

Many of those pre-Jackson 'bulge’ cases are still going through the system, of course – but all the same, it is a good time to take stock of the effect of the reforms so far.

Firstly, lest we forget, we had the relief from sanctions nightmare – prompted by the Mitchell decision, which was nothing to do with Lord Justice Jackson himself, and then largely resolved by the clarification - or was it climbdown - in Denton. Most litigators seem to think things are pretty much back to normal now, but I bet everyone is a lot better at remembering court deadlines.

Then we have proportionality. As I’ve blogged before, we still don’t have any guidance on how the new rule is supposed to operate – but, hey, we’re only two years into the reforms, what’s the rush?

Proportionality comes into play from the outset now that we have budgeting, but there is quite a variation in terms of how judges are assessing it, and how much weight they give to the actual financial value of the claim in proportion to costs, compared to the other factors that they appear to be allowed to consider.

On the face of it, it is hard to argue with the notion that costs should be proportionate to the amount of the claim. But there are a few aspects to proportionality that I don’t feel comfortable with. What about the merits of the claim? If you have an extremely strong case, then it may still be worth bringing your claim, even if costs are high compared to damages.

But at budgeting stage, the judge ruling on the proportionality of the figures will not have heard enough evidence to know how strong the claim is.

The other, more obvious, point, is that if you put too much emphasis on the ratio between costs and damages, there are many claims that are for a lower financial amount – but still very important to the individual litigant – that would never be ‘proportionate’, so never brought. How is that fair?

Needless to say, the government’s recently ratcheted court fees will only serve to make it even harder to keep costs proportionate.

Let’s turn to budgeting itself. Again, this is an area where more guidance is needed, and while it may or may not be having an effect on reducing parties’ costs, it is most certainly leading to massive delay and frustration. Budgeting is working worst in personal injury - the area that many feel was the real target of the reforms - and best in commercial, where there was arguably less of a problem.

In the personal injury field, the jury is still out on qualified one-way costs shifting, which should start having more of an impact this year.

Damages-based agreements, which were intended to go some way to make up for the loss of recoverability by extending the menu of funding options for both commercial and PI claimants, effectively had the sword put through them last November, when the government ruled out hybrid ‘no win, low fee’ DBAs.

The DBA rules are still being tweaked and tidied by the Civil Justice Council, but most lawyers have lost interest now that the only option on the table is a straight, all-or-nothing, DBA. 

Another big reform was provisional assessment. This was introduced for cases of much higher value than expected – up to £75,000, instead of up to £25,000 as in the pilot. Speaking at an IBC Legal Solicitors Costs conference earlier this year, Master Haworth of the Senior Courts Costs Office (giving his personal views) acknowledged that the process was taking longer than expected, and described the six-week target for completing PA as ‘a joke’.

There are many other aspects to the huge package of reforms, including changes to the management of cases and the rules on discovery and use of expert evidence. It would be interesting to hear lawyers’ views on what the impact of these has been so far.

On experts, judges’ reluctance to order ‘hot-tubbing’ has been surprising – but I have been told anecdotally that even though hot-tubbing isn’t used that much, experts are aware that it could be ordered, which has had a positive effect on reports and the levels of co-operation between experts.

So, two years on, finding something positive to say about the reforms is harder than it should be. At the root of many of the problems is uncertainty - among both lawyers and judges - about how the new rules are supposed to work. So we can only hope that by April 2016 we will be able to make a more positive assessment.

Rachel Rothwell is editor of Litigation Funding magazine and a former Gazette news editor