"Civil justice today is too expensive and too exclusive. The very rich and the very poor have access but middle income Britain is left out in the cold - and middle income Britain is the overwhelming majority of people in this country. They cannot litigate because the lawyers' fees are so high and because they cannot afford the risk of losing and having to pay their opponent's lawyers' fees as well".
“Civil justice today is too expensive and too exclusive. The very
rich and the very poor have access but middle income Britain is left out in
the cold - and middle income Britain is the overwhelming majority of people
in this country. They cannot litigate because the lawyers’ fees are so high
and because they cannot afford the risk of losing and having to pay their
opponent’s lawyers’ fees as well.
Not only is civil justice far too expensive for people to afford because
of the scale of the costs: they are deterred from pursuing good cases because
they cannot make any rational assessment of how much it will cost them in
the end. These and the level of costs are the biggest bars to access to
justice.”
Lord Irvine of Lairg October 1997
| 1.1. | In too many cases legal costs are too high. They often equal or exceed the sum in dispute. The high costs are incurred, in part, because current procedures are too complex and too slow to deal appropriately and proportionately with the majority of cases. |
| 1.2. | In his keynote address to the Solicitors' Annual Conference at Cardiff in October 1997, the Lord Chancellor announced his proposals to reform the civil justice system to make it cheaper, quicker and simpler. These reforms were developed from the proposals made by Lord Woolf in his report in 1996 (endnote 1). The Lord Chancellor proposed that he would extend the small claims limit to £5000 generally and £1000 for personal injury claims (he has since announced that this lower limit will also apply to housing disrepair cases), and introduce a 'fast track' for claims up to £15000 which would have a strict timetable, with cases being heard within 30 weeks of allocation to the track, and with greater control over the conduct of the litigation by the courts. A multi-track would take the remaining claims above £15,000 and any claim considered too complex for the other tracks. |
| Protocols | |
| 1.3. | It was also proposed that pre-action protocols should be developed for as many categories of case as possible. Pre-action protocols were envisaged by Lord Woolf in his Final Report as codes of practice for pre-litigation behaviour. He considered them an important part of the new regime. They are intended to facilitate early settlement where possible and ensure that parties are adequately prepared for litigation where not. The improved co-operation and early sharing of information between parties which are key elements of the protocol concept should reduce unnecessary work and duplication, bearing down on costs. Where one or other party has failed to comply with the relevant protocol, judges would be expected to use the power which would be vested in them in the new Civil Procedure Rules to penalise the offending party or parties in costs. |
| 1.4. | The LCD has received complaints that various protocols that have existed for some time are being substantially disregarded in practice so that their purpose is being frustrated. The Lord Chancellor is concerned that when the pre-action protocols currently being agreed and piloted become operational they should complied with. He would welcome any opinions on the powers or duties that should be conferred or imposed on the courts to ensure strict compliance with the protocols, and in particular whether costs sanctions are sufficient or whether there should be some other, and if so what, sanction. |
| Controlling Costs | |
| 1.5. | All of these factors will contribute to making costs more predictable and more affordable. However, the Lord Chancellor believes that the problem of disproportionate legal costs needs to be addressed directly, by placing some restriction on recoverable costs. This would exert downward pressure on costs, and would provide greater certainty for parties about the costs they may have to pay their opponent or that they will recover. |
| 1.6. | The proposal to restrict costs as part of the reforms to be implemented in April 1999 has not been universally accepted however. The Lord Chancellor has received requests from various specialist personal injury lawyer groups and others urging him not to apply fast track costs to personal injury actions. More generally, the Law Society has expressed concern that before fixed costs are introduced time should be given for the reforms to bed down, and any regime should be piloted before being introduced generally. Much of this discussion has, necessarily, taken place without firm proposals for a fixed costs regime, in particular the level at which it might be set. The Lord Chancellor believes that much of the concern may have been met by the scheme set out in this paper. He is, nevertheless, concerned to ensure that implementation of his plans for modernising the way that legal services are provided are begun, and that the problems of disproportionate costs are addressed. The Lord Chancellor is, therefore, concerned to consider all relevant issues before finally deciding on the form, scope and timing of the introduction of the fixed costs regime. |
| 1.7. | Accordingly, the Lord Chancellor invites comments on
three main proposals:
1.7.1. the introduction of a cost regime for pre-trial costs and fixed trial costs in all cases in the fast track; 1.7.2. the exemption of personal injury actions from the application of the pre-trial costs regime; and 1.7.3. the case for postponing the introduction of a pre-trial costs regime in fast track cases in favour of a more fundamental examination of the causes of disproportionate costs with fixed costs of trial. |
| 1.8. | In developing a possible costs regime the Lord Chancellor has been greatly assisted by the research commissioned by his Department from the Institute of Advanced Legal Studies (IALS). IALS was asked to undertake research using hypothetical case studies to determine the amount of work required of a solicitor to conduct a case through the fast track. The research was intended to assist the Department in arriving at a suitable costs regime and inform the work of setting the fee levels. Whilst there was a danger that this type of exercise might produce misleadingly artificial results (owing to the effect on the participants of being involved in a new project), it would allow the new approach to be tested repeatedly, on a theoretical basis, over a much shorter period of time than would otherwise be possible. |
| 1.9. | This paper does not consider other fixed costs which apply in undefended actions. A separate consultation paper will be issued to propose revised fixed costs rules akin to those presently contained in Order 62 Appendix 3 of the Supreme Court Rules and Order 38 Appendix B of the County Court Rules. These deal with various circumstances for example costs on entering judgement by default, or entering judgment on an admission of a claim, or for summary judgment under RSC Order 14. |
| 1.10. | If you would like to comment on the proposals in this
paper, please send your comments to the following address:
Mrs Kerry Allen
Lord Chancellor's Department 3rd floor Selborne House Victoria Street London SW1E 6QW to arrive by 17 August 1998. Further copies of this paper can be obtained from this address, or by telephoning (0171) 210 8742. |
| 1.11. | The IALS research report is being published contemporaneously with this paper. The research is briefly summarised in Chapter 2 of this paper, but if you would like a copy of the full research report it is available from Kerry Allen at the above address (it is not, however, available on the LCD web site) |
| 1.12. | Unless you ask the Department to keep your name or the contents of your response confidential, your name and the general contents of your response may be made public in response to questions under the Open Government initiative. Please make sure you mark your response clearly if you wish your response or your name to be kept confidential. |
| 2.1. | The work of the research team (Tamara Goriely, Farah Butt and Professor Avrom Sherr) was assisted by an Advisory Group consisting of representatives of LCD, the Law Society, the General Council of the Bar, the Consumers Association, the National Consumer Council, and two academic researchers. The Group was asked to advise LCD and IALS on aspects of the research, in particular whether the geographical spread of the events was sufficient; whether the case studies chosen were representative of typical fast track cases and represented a mix of straightforward cases and some with complicating factors; and on the size and type of firm (without identifying either individuals or firms) that should be approached to provide assistance in the research. The Group also provided advice on an appropriate methodology and commented on the draft report (although the Group was not asked to approve the report or to agree to the conclusions drawn). |
| 2.2. | The research took the form of role playing events. Participants were asked to look at real (anonymised) cases and determine what steps would need to be taken to progress the case if the fast track procedures were in operation. It concentrated on solicitors' costs up to but not including trial. The research covered road traffic accident and employers' liability personal injury cases and contract cases. Six events were held in five locations (Birmingham, Bristol, Leeds, London and Manchester). Those invited to attend included solicitors, insurance claims assessors and district judges. The events were held from 3 October 1997 to 5 December 1997 |
| 2.3. | For each event involving personal injury actions, IALS sought a mix of 6 plaintiff solicitors, 4 defendant solicitors, 2 insurance claims assessors and 3 district judges. For the contract cases, 12 solicitors and 3 district judges were sought. It was not possible for each event to match these targets exactly, but 84 people attended the events (endnote 2). |
| Personal Injury Cases | |
| 2.4. | Whilst each personal injury (PI) case has its own unique aspects, participants at the PI events were able to reach agreement on the amount of necessary work. There did appear to be broad consistencies in the amount of work needed to take a case through the fast track procedure. The application of the draft pre-action protocol assisted in regularising the work needed pre-issue, and helped determine where further work was necessary, and what that work should be. |
| 2.5. | Consequently, IALS was able to derive a cost matrix for both plaintiffs and defendants, expressed in the terms of hours of work needed to be undertaken, although the costs for each party were significantly different (endnote 3), with plaintiffs' costs being nearly 3 times that of defendants. |
| Contract Cases | |
| 2.6. | Unlike PI cases, where solicitors generally tend to specialise in acting either for plaintiffs or defendants, in contract disputes solicitors will act for either party. It is also often only a matter of timing which of the parties in dispute commences proceedings first. There is, as yet, no developing pre-action protocol for contract cases. This means that there is no agreed set of procedures that ought to be completed before issue. |
| 2.7. | The role playing events for contract cases demonstrated that there was a significant disparity between solicitors in the amount of work they thought was necessary. Participants often could not agree about either the amount of work needed, or the time that the work would take. At one event, the time estimates in the same case varied from 12½ hours to 62 hours. |
| 2.8. | With such a wide variance, IALS was not able to determine a cost matrix based on the amount of work required. Instead, it recommended that it would be possible to limit the amount of the recoverable costs not on the amount of work required, but on a sum proportionate to the value in dispute. |
| 3.1. | The research undertaken by IALS suggests that an approach which seeks to fix costs by means of a matrix may technically be possible for personal injury actions, but there are problems with this approach for contract cases. As part of the discipline of the fast track the Lord Chancellor remains determined to bring greater control over the costs that can be recovered from the losing party. This is consistent with the objectives of making civil justice cheaper, and more certain, for those who use it. | |||||||||||||||
| 3.2. | The Lord Chancellor acknowledges that in implementing a wholly new procedure, with greater direction from the court about the conduct of litigation, it is difficult at this stage to predict accurately the work that may be necessary to take cases through the fast track. Historical information on costs is not a useful guide, both because the costs would be a result of procedures which have changed greatly, and because there is general acceptance that costs are at present too often disproportionate to the sum or issues at stake. | |||||||||||||||
| 3.3. | He believes, therefore, that any scheme to restrict recoverable costs in the fast track must be sufficiently flexible to allow for the variations in the work required depending upon the type of litigation. It must also tackle the problem of disproportionate costs, whilst at the same time setting the restriction on costs at a level which allows lawyers to undertake necessary work within that restriction. He would not wish to set the restriction so severely that clients would find it uneconomic to proceed, because they were losing too great a part of their award to meet any difference between their own lawyer's bill and the recoverable costs. The aim must be to encourage lawyers to charge their clients at a rate equal, or close to, the sum that can be recovered. Setting the level of the costs in these circumstances is essentially a matter of judgment as to whether the fixed costs ensure better proportionality, and yet allow sufficient flexibility. It also militates, initially at least, against a matrix approach which may prove too inflexible. | |||||||||||||||
| 3.4. | The proposed scheme which follows seeks to achieve this balance. It recognises that the most appropriate way of achieving greater proportionality is to provide a cap on recoverable costs, but leaves the precise determination of the amount either to assessment by the trial judge, or taxation in the usual way. The proposed scheme also deals with the costs leading up to the trial, and the costs of the trial day itself, separately. The Lord Chancellor believes that whatever the difficulties of determining costs for conducting the case to trial, the certainties the fast track system bring to the likely length of trial mean that it ought at least to be possible to fix trial costs in advance. | |||||||||||||||
| 3.5. | This Chapter sets out the proposed scheme mentioned in paragraph 1.8(a), and in the following Chapter refinements to the scheme are considered and a number of questions are asked on which responses are sought. Chapter 5 considers the options set out in paragraph 1.8(b) and (c). | |||||||||||||||
| Pre-Trial Costs | ||||||||||||||||
| 3.6. | The general principle would remain that the award of costs is in the discretion of the court. The costs regime would apply where the court is asked to determine the costs of a fast track case either by assessing costs at the end of the trial or hearing, or when taxing the costs in pursuance of an order of the court, or where parties have settled the main issues in the case but are unable to agree the amount of costs. | |||||||||||||||
| 3.7. | The recoverable lawyers' costs (that is solicitor's profit costs and any pre-trial fees paid to counsel but not including disbursements such as expert reports or other expenses) would not be allowed to exceed 50% of the award or claim (see paragraph 3.9). This cap would apply for all work excluding the work covered by the trial fee (see paragraph 3.12). Disbursements would also be recoverable as allowed by the court, as would any VAT payable on lawyers' fees or disbursements. Where the case is not a claim for money but for some other remedy or relief, a cap of £7,500 would apply. | |||||||||||||||
| 3.8. | Costs would either be assessed by the trial judge, or taxed separately to determine the paying party's exact liability within the maximum limit above. There would be no discretion to exceed the maximum limit. The cap would apply to all the costs ordered to be recovered: the amounts of any interlocutory cost awards would be reckonable together with the taxed or assessed costs of the main proceedings in determining if the cap applies. | |||||||||||||||
| 3.9. | If the claimant wins the case, the maximum sum recoverable would be fixed by reference to the amount of the award. This would ensure that claimants who inflate their claims do not benefit in costs. If a defendant succeeds, the maximum recoverable costs would be fixed by reference to the amount of the claim. This, too, would act as a deterrent to over- enthusiastic claimants. | |||||||||||||||
| 3.10. | For cases where proceedings are issued and defended, and the case settles before allocation to a track, but costs cannot be agreed and fall to be taxed by the court, the taxing authority would first be required to consider whether the case would have been allocated to the fast track. If he believes the case would have been allocated to the fast track, he would be required to have regard to the fast track costs limits. | |||||||||||||||
| Trial Costs | ||||||||||||||||
| 3.11. | The recoverable costs for the day of the trial would
be set according to the following scale:
|
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| 3.12. | The trial costs (whether advocacy is undertaken by counsel or a solicitor) would include work done by the advocate in preparing for advocacy. Where a solicitor attends with counsel, he would be able to claim a fixed recoverable sum of £150 in addition to counsel's fee. These sums would not be recoverable unless the trial commences. | |||||||||||||||
| 3.13. | The fee for solicitors who undertake their own advocacy would include the preparation they have undertaken as advocate. All other preparation would be included in their general claim for profit costs, and subject to the fixed costs limit for pre-trial costs. | |||||||||||||||
| 3.14. | There would be no discretion to award a higher, or a lower, fee. | |||||||||||||||
| 4.1. | The Lord Chancellor welcomes views generally on the scheme set out in Chapter 3. However, in devising the scheme the Lord Chancellor has considered a number of possible alternative formulations, and he would be grateful for views on the specific issues raised in the following paragraphs. | ||||
| Pre-Trial Costs | |||||
| The effect of the cap in smaller claims | |||||
| 4.2. | For claims under £5000, which are either not suitable for the small claims procedure, or are personal injury or housing disrepair cases above the £1000 limit, the effect of the cap at 50% of the claim may be to fix recoverable costs at a level insufficient to achieve an equitable balance between restricting costs, and allowing the successful party to recover a reasonable amount for his costs of going to law. It could be argued that there is a minimum amount of necessary work which must be completed in every case, and in small value claims this would always exceed 50% of the claim. The Lord Chancellor would, nevertheless, wish to continue to ensure that whilst costs may equal, or possibly exceed, the value of the claim, the disparity was not wholly unreasonable. Accordingly, he would welcome views on whether there should be a point below which the 50% cap would be suspended. Instead a fixed monetary cap could be set at a sum which would allow the recovery of the cost of the irreducible minimum work required in every case. | ||||
| 4.3. | If this were generally thought necessary, the Lord Chancellor would be minded, in cases below £5,000 to allow the recoverable costs to be taxed or assessed within a cap of £2,500. The percentage element of the cap would not apply. | ||||
| 4.4. | This would effectively give a two tier scheme. The maximum
liability for each tier would be:
|
||||
| 4.5. | The Lord Chancellor would welcome views on:
4.5.1. whether he should allow higher proportionate costs in small value cases; and if so 4.5.2. whether a cap of £2,500 in small value cases is a suitable level for the cap, or whether a lower limit should apply. |
||||
| Penalising unreasonable behaviour of parties | |||||
| 4.6. | The proposed scheme does not allow any discretion to exceed the maximum limits. One of the criticisms of the general proposals to fix costs is that it might provide an opportunity for a financially stronger party to behave oppressively, and cause the weaker party to incur costs to the point where they abandon an action through lack of funds. There are provisions in the present county court rules on small claims, where generally costs are not recoverable, that allow the court to award costs where there has been unreasonable conduct on the part of the opposite party (County Court Rules 1981 Order 19 rule 4(2)(c)). | ||||
| 4.7. | Should there be some similar provision in fast track cases? One possibility might be to remove the application of the cap in such cases. Costs would be at large. Alternatively the court might be given a limited discretion to allow costs above the cap within certain limits. The limits could be expressed either as a percentage of the cap; for example, if the court had discretion to increase the cap by 50% it would mean, in the case of a £6,000 claim, that recoverable costs might be allowed up to a maximum of £4,500 rather than £3,000. Or the discretion could be expressed to allow the court to award a further sum not exceeding a specified figure, say £1,000. | ||||
| 4.8. | To be effective as a sanction, it might be argued that the proper course would be for the restriction to be removed entirely. However, the Lord Chancellor would not wish to create an incentive on parties to allege unreasonable behaviour because of the perceived prize of unrestricted costs if the allegation was accepted. Essentially, the question whether a party has behaved unreasonably would need to be determined by the court, but consistent with the aim of achieving greater certainty for litigants, it might be considered desirable within the rules, or in practice directions, for examples of behaviour which might merit the application of the sanction to be specified. | ||||
| 4.9. | The Lord Chancellor would welcome views on:-
4.9.1. whether he should make provision to give the court discretion to exceed the cap where a party has behaved unreasonably; 4.9.2. whether the discretion should be unlimited or limited, and if so how; and 4.9.3. whether the rules or practice directions should illustrate what kinds of behaviour might merit the sanction, and if so what behaviour might be included in any rule or practice direction. |
||||
| A general discretion to exceed the cap | |||||
| 4.10. | Even where parties have behaved reasonably there could be circumstances where applying the fixed costs cap might lead to injustice to the party entitled to recover costs. This might occur, for example, where issues in the case almost merit inclusion in the multi-track. The Lord Chancellor would be prepared to consider allowing the court a limited discretion to exceed the fixed costs cap. If a discretion were provided, the Lord Chancellor favours allowing the court to increase the cap by a maximum percentage figure, probably no more than 50%, as described in paragraph 4.7. | ||||
| 4.11. | Such a provision might also give the court a means of dealing fairly in cases where there are already a number of interlocutory costs orders (which have either been assessed or left to be dealt with once the action is determined at trial - costs in cause), which would equal or form a substantial proportion of the capped limit. A residual limited discretion to exceed the cap might allow the court to ensure that parties are not deterred from making or resisting further interlocutory applications simply because costs have already mounted significantly, or be deterred from taking the case to trial because the cap has been reached. | ||||
| 4.12. | The Lord Chancellor would welcome views on:-
4.12.1. whether he should make provision to give the court a residual discretion to allow costs to exceed the cap; and 4.12.2. if so, should the discretion be limited to allowing the cap to be exceeded by no more than a further 50% of the cap. |
||||
| Fixed Trial Costs | |||||
| Entitlement to trial costs | |||||
| 4.13. | It is proposed that the trial fee only becomes payable where the trial commences. The aim of the provision is to discourage late settlements. Late settlements would mean that the court time allocated to the trial would likely be wasted. To achieve fixed appointments within the overall 30 week limit, it would be essential to ensure that court time is not wasted. | ||||
| 4.14. | However, as in so many areas, there is a balance to be struck between ensuring that any incentives in the scheme encourage early settlement, and allowing successful parties to recover costs which they have incurred, within the context of the fixed costs regime. Moreover, it is arguable whether making no provision for trial costs, unless the trial commences, creates a perverse incentive to delay settlement where it is offered close to the trial date. This might be of particular importance to a client where the remainder of the costs are likely to be restricted by the cap, and there was likely to be a significant disparity between the costs he can recover and the costs he is liable to pay his solicitor. | ||||
| 4.15. | Preparation to act as an advocate would in many cases not be undertaken until very near to the trial day. There could therefore be an argument for allowing a proportion of the trial costs in those cases which settle close to the hearing date, if it was felt that to do otherwise created a perverse incentive to delay settlement until the day of the trial. The Lord Chancellor has in mind here cases which settle within 48 hours of the trial day. | ||||
| 4.16. | Accordingly, it might be possible to provide that a percentage of the costs would be recoverable depending on how long before the trial date settlement takes place. For example, if the case settled 48 to 24 hours before trial 40% of the trial fee might be recoverable; between 24 and to 18 hours before trial 80%; and within 18 hours of the trial, the full trial fee might be recoverable. The problem of creating a perverse incentive would not be removed by this proposal. There would still be an incentive for cases close to settlement to procrastinate to within 18 hours of trial to recover the full advocacy fee. Settlements occurring this late would give the courts little prospect of re-allocating court time to other fast track cases. | ||||
| 4.17. | The Lord Chancellor is concerned to ensure that the fixed costs regime does not create perverse incentives to procrastinate and delay settlement. He is concerned too that court time is used to the maximum potential. At the same time, he would not wish the fixed costs regime to act oppressively on those clients whose cases are reasonably settled at a late stage. | ||||
| 4.18. | The Lord Chancellor would welcome views on:-
4.18.1. whether the trial costs should be recoverable for cases that settle close to the date of trial; 4.18.2. if so when should the fee, or a percentage of it, become recoverable; 4.18.3. what should the percentages be, and should they vary the closer to the date of trial that settlement occurs. |
||||
| Pre-Trial Costs | |
| 5.1. | The pre-trial costs regime has been designed so that it can apply to any action that would fall to be determined in the fast track. It has been devised against a background of research which, whilst it provided valuable information, also highlighted potential areas of difficulty. Moreover, the proposals for fixed costs are not being made in a vacuum. If the Government's proposals for extending the use of conditional fees and for reforming legal aid are implemented, lawyers in the personal injury field will have to adapt to other major changes over a very short space of time. |
| 5.2. | As mentioned earlier, the Lord Chancellor has received requests from various professional groups arguing that a costs regime should not be applied to personal injury actions or that generally introduction should be postponed until the reforms in procedures bed down. In putting forward his proposals for a fast track costs regime the Lord Chancellor wishes to consider all relevant issues before finally deciding on the form, scope and timing of the introduction of the fixed costs regime. |
| Personal Injury Actions | |
| 5.3. | The Lord Chancellor is concerned about devising different costs regimes for particular types of litigation since this would run counter to the objective of reducing complexity. He is, however, aware of the arguments put forward by personal injury lawyers and their major clients that a fixed costs regime should not be applied to personal injury cases. He acknowledges that lawyers working in this field of law, which affects very many people, are being asked to adapt to major changes in the way they routinely charge for their services and fund cases. He is ready to consider the case for exempting personal injury cases from the operation of the fixed costs regime over a period of time during which the level of costs could be monitored. |
| 5.4. | The Lord Chancellor believes that the existence of pre-action protocols rigorously applied and enforced, a fixed timetable once the case is commenced, and firm judicial control of cases will act to control costs. Were he persuaded to exempt personal injury action for a period from the application of the fixed costs regime to allow them time to adapt to the new circumstances of working principally under conditional fees, he would expect the profession to ensure that the aim of keeping down costs, and making litigation cheaper and more certain, was achieved. He would, in monitoring the effect of the reforms, seek to collect information on the level of costs in fast track cases generally. This would show him not only how well the costs regime scheme was working in other areas of litigation, but also whether costs in personal injury actions were becoming more proportionate. |
| 5.5. | The Lord Chancellor would welcome views on whether personal injury actions should be subject to, or exempt from, the pre-trial fixed costs regime and what problems might be caused were personal injury actions to be exempted. |
| Delaying Fixed Costs | |
| 5.6. | It is undeniable that the application of a fixed costs regime will, as it is intended, condition the behaviour of parties. It will condition the behaviour not only as between the parties to the action, but as between the lawyer and his client. It is important therefore that in devising a fixed costs system the Lord Chancellor is satisfied that the scheme is set so as to allow lawyers to charge their clients fees which are comparable with the costs that can be recovered from the opponent. To do otherwise either means that clients find themselves paying substantially more to their lawyers than can be recovered, or lawyers only taking cases which they are sure can be completed within the fixed costs limits. |
| 5.7. | That is not to say that there is not now a disparity between the costs paid by the client to his lawyer, and the costs ordered to be paid to the winning party. In general litigation cases, it is not unknown for the solicitors charges to his client to exceed the costs recovered from the opponent by 30% or 40%. The disparity arises for many reasons. The basis on which costs are taxed differs, and lawyers are entitled to be paid for all work undertaken at the request of the client, some of which may be considered by a court unnecessary and not recoverable from an opponent. In many ways a better way to address the issue of costs might be to look closely at the way lawyers charge for their services and in particular whether control of solicitor and own client costs might not achieve a better result. The Lord Chancellor is aware of work that has been done in other comparable jurisdictions with this aim in mind. |
| 5.8. | More generally, the Lord Chancellor is aware of the very large changes in practice and procedure that will flow from the introduction of fast track, and which will require litigants and lawyers to change drastically the way they conduct cases. In addition, with his intended extension of conditional fees to all non-matrimonial civil cases, the way lawyers charge for and fund cases may alter dramatically. Anticipating the effect of all these changes in devising a scheme for fixed costs in these circumstances is not a straightforward task. Indeed, this fact is explicitly recognised in the more flexible scheme that he is considering implementing. |
| 5.9. | It has been argued that implementation of a costs regime should be postponed for the first few years of the operation of the fast track. It is suggested that some control over costs would be effected through the operation of protocols, where they applied, the fixed timetable and judicial control. The costs of cases could be monitored in order to develop a regime based on experience. Postponing implementation however, would also postpone achieving greater predictability and proportionality in the costs incurred in very many cases. |
| 5.10. | In the Lord Chancellor's view, postponement could only be justified if it were to allow a more fundamental consideration of the causes of high costs. He would wish to seek the help of the judiciary, the profession and other interest groups to look closely at the relationship between solicitor and own client costs and recoverable costs, with particular reference to schemes developed in other countries. The aim would be to devise jointly a scheme, based on experience, that would tackle at their root the causes of disproportionate costs. This might necessitate consideration of the operation of other matters of procedure and law that apply to costs, (for example the operation of the indemnity principle). It could also result in a more predictable way for lawyers to charge their clients for taking fast track cases, and, hence, more predictable recoverable costs. |
| 5.11. | The Lord Chancellor would welcome views on whether he ought to postpone the introduction of pre-trial fast track costs in favour of a more fundamental examination of the reasons for disproportionate costs. |
| Trial Costs | |
| 5.12. | The Lord Chancellor does not believe that the considerations which may apply to the coverage of pre-trial costs apply in relation to the proposals for fixed costs of trial. In this case the work required is more easily definable and with hearings not exceeding one day, the Lord Chancellor believes it ought to be possible in any action which may come to trial for lawyers to work within the fixed costs allowed. He believes also that at least in this area it is right to achieve certainty now. |
| Compliance with protocols | |
| 6.1. | The Lord Chancellor would welcome any opinions on what powers or duties should be conferred or imposed on the courts to ensure strict compliance with protocols. [Paragraphs 1.3 - 1.4] |
| A proposed scheme | |
| 6.2. | The Lord Chancellor would welcome views generally on the scheme set out in Chapter 3. [Paragraphs 3.6 - 3.14] |
| The effect of the cap in smaller claims | |
| 6.3. | The Lord Chancellor would welcome views on:
6.3.1. whether he should allow higher proportionate costs in small value cases; and if so 6.3.2. whether a cap of £2,500 in small value cases is a suitable level for the cap, or whether a lower limit should apply. [Paragraphs 4.2 - 4.5] |
| Penalising unreasonable behaviour of parties | |
| 6.4. | The Lord Chancellor would welcome views on:-
6.4.1. whether he should make provision to give the court discretion to exceed the cap where a party has behaved unreasonably; 6.4.2. whether the discretion should be unlimited or subject to some limitation and, if so, what; and 6.4.3. whether the rules or practice directions should indicate what kinds of behaviour might merit the application of the sanction, and if so what behaviour might be included in any rule or practice direction. [Paragraphs 4.6 - 4.9] |
| A general discretion to exceed the cap | |
| 6.5. | The Lord Chancellor would welcome views on:-
6.5.1. whether he should make provision to give the court a residual discretion to allow costs to exceed the cap in appropriate circumstances; 6.5.2. if so, should the discretion be limited to allowing the cap to be exceeded by no more than a further 50% of the cap. [Paragraph 4.10 - 4.12] |
| Entitlement to trial costs | |
| 6.6. | The Lord Chancellor would welcome views on:-
6.6.1. whether the trial costs should be recoverable for cases that settle close to the date of trial; 6.6.2. if so when should the fee, or a proportion of it, become recoverable; 6.6.3. what should the proportions be and should they vary the closer to the date of trial that settlement occurs. [Paragraphs 4.13 - 4.18] |
| Coverage of the pre-trial costs regime | |
| 6.7. | The Lord Chancellor would welcome views on whether personal injury actions should be subject to, or exempt from, the pre-trial fixed costs regime and what problems might be caused were personal injury actions to be exempted. [Paragraphs 5.3- 5.5] |
| 6.8. | The Lord Chancellor would welcome views on whether he ought to postpone the introduction of pre-trial fast track costs in favour of a more fundamental examination of the reasons for disproportionate costs. [Paragraphs 5.6 - 5.11] |
| 1 | Access to Justice Final Report (HMSO 1996) |
| 2 | Costing Fast Track Procedures through Hypothetical Studies LCD 1998 page 5 |
| 3 | ibid. Page iv |
