The Jackson Reforms One Year On

One year on

April 2013 saw the inception of the biggest shake up to civil justice in recent memory. More than one year on, have the Jackson Reforms achieved their aims?

The anticipated reforms heralded by Lord Justice Jackson took effect from 1 April 2013. It had been expected that the majority of the reforms would focus on costs management. However the changes have been far wider reaching, creating a new civil litigation landscape in which the Courts have adopted a much stricter regime with an almost zero tolerance policy for non-compliance with rules and Orders.

Structural changes

Perhaps the most significant reform for the NHS and other public bodies is the ending of Claimant solicitors’ rights to recover CFA success fees and ATE insurance premiums from Defendants and QOCS (‘qualified one way costs shifting’).

Since the 1999 Woolf reforms Claimant solicitors who secure compensation for their clients have been able to add ‘success fees’ to their costs claims (sometimes 100% of their normal costs) and recover these from the Defendant. Defendants have also been required effectively to refund the insurance policy premiums that have been incurred by Claimants pursuing a ‘no win no fee’ case.

For claims issued after 1 April 2013 that recoverability no longer exists. However, this is balanced by an increase in some damages and the introduction of rules removing the right of successful Defendants to recover legal costs from unsuccessful Claimants.

Whilst there was a rush of claims in the run-up to 1 April 2013 (Claimant lawyers wanted to make sure they could claim their success fees!), it is still too early to tell whether the new recoverability rules will result in significant savings for public bodies, although the expectation is that eventually they will.

Practical Changes

Costs budgeting is intended to involve the Court early (rather than right at the end of the case) to prevent costs from spiralling out of control. At various stages the parties must tell the Court what costs have been incurred and what further costs they are likely to incur. The Court then approves a budget for the various stages of the litigation.

It is too early to say whether this change will reduce costs, but the widely publicised case of Mitchell v News Group Newspapers demonstrates the new regime in action. The Claimant’s solicitors were late in filing their costs budget and sought to rely on ‘pressure of work’ and ‘staff shortage’ arguments to avoid sanction from the Court.

The Court rejected those arguments and decided that the Claimant’s costs budget should be limited to Court fees only. As a result Mr Mitchell was precluded from recovering any other legal costs from his opponent (even if successful). His attempt to persuade the Court to grant ‘relief from sanction’ failed. Many similar decisions have followed Mitchell. There is a concern that this new stringent and inflexible emphasis on procedural compliance is compromising fairness and justice itself. Those arguments will run and run.

Ultimately, the message from Jackson and Mitchell is clear. The right to pursue litigation and potentially recover damages and costs has changed. Parties are now compelled to strictly comply with the Court’s rules and Orders. Parties who fail to comply will suffer the consequences.

The Jackson 5: What you need to know:

  • Claimant’s costs should come down but it is still a little early to say how much and which of the changes is likely to be the real driver behind this in practice
  • Don’t assume that the Court won’t be prepared to make what would previously have been regarded as an ‘unfair’ decision. We have seen an immediate change in attitude and this is the best way to ensure meaningful change
  • Diarise deadlines immediately and ensure you have an appropriate reminders system. Make any applications to extend deadlines before the deadline itself. Although by no means guaranteed to succeed, any application is far more likely to be successful if made in advance of the procedural deadline. Deadlines affect everyone. Remind experts and witnesses of their duties in light of the Court’s new stricter approach
  • Don’t rely on ‘pressure of work’ excuses for non-compliance with deadlines. We have seen from Mitchell that the Courts will simply take a zero tolerance approach in this situation
  • Don’t dismiss Alternative Dispute Resolution. LJ Jackson concluded that greater encouragement should be given for this, particularly for low value claims.

Click here to read our articles on: the importance of being compliant, hospital chains, persistent litigants, CCG governance, Monitor’s latest procurement guidance, saying sorry for mistakes and the future of the stethoscope.

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