Jackson reforms one year on—a view from the Bar

Jackson reforms one year on—a view from the Bar

Dispute Resolution analysis: Following Lord Jackson’s review of civil legal costs, new measures were brought into force on 1 April 2013. On the first anniversary of the reforms, the Remuneration Committee of the Bar Council explains how litigation has changed under the Jackson regime.

What has life been like in court following Jackson?
The most significant impact to date arises out of the decision of Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537, [2013] All ER (D) 314 (Nov). Anecdotal evidence suggests the courts are grappling with a heavy increase in applications for relief from sanctions which, but for Mitchell, would not have been required pre-Jackson. Solicitors are facing dilemmas of their own, not only when they themselves miss a deadline by just a few days (or even a few hours), but also as to whether to oppose applications for relief brought by the other party to the proceedings. There is a concern that if applications for relief are not opposed then solicitors may be criticised by their own clients in taking advantage of Mitchell and the opponent’s default.

Conflicting approaches at first instance leads to uncertainty and fuels what is bound to be a turbulent period whilst the shock wave of the Court of Appeal’s judgment ripples across the litigation scene. While it may feel more like a tsunami than a ‘ripple’, the likelihood is that over the next year or two, the wave will have petered out. Mitchell brings with it a new and required discipline to the litigation scene which it might be said is long overdue. The test of ‘triviality’ and ‘good reason’ provide the platform for the new approach and while these criteria are unlikely in themselves to be considered controversial, their application may. It is vital the courts maintain consistency in approach.

The new budgeting rules have also affected court life. In the vast majority of cases, courts are now required to budget the costs of the proceedings to trial. This is a new skill and discipline that judges and lawyers are still learning to grapple with. Anecdotal evidence suggests the budgeting process can add cost to the process and cause longer case management hearings than was the case pre-Jackson. However, it may be it will take another two to three years to get a real feel as to the overall contribution that budgeting has made to the post Jackson litigation scene.

While it is still early-days, the Bar Council has launched a major research project to better understand the impact of the Jackson reforms (and other reforms implemented by the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO 2012)) one year after implementation. A critical part of this project is a survey of the Bar, clerks, practice managers and costs lawyers. This survey will help ensure the Bar Council has evidence to better understand and explain trends that are currently only anecdotal. The survey is open from 1 to 22 April 2014.

What particular challenges have barristers faced?
Barristers who were conducting cases pursuant to conditional fee agreements (CFAs) pre-Jackson face particular challenges as to the recovery of success fees in post-Jackson instruction CFA cases. This includes cases where:

• the solicitor instructing them pre 31 March 2013 is replaced post 1 April 2013
• the solicitor was instructed before 31 March 2013 on a CFA with a success fee but only gets round to instructing counsel after 1 April 2013
• the instructing solicitor assigns their case load to other firms, as it remains unclear how assignment impacts the barrister’s success fee
It is unsatisfactory that the Bar should be faced with this uncertainty. It is also unfair barristers may be deprived of success fees in cases which they only agreed to take on the proviso that a success fee would be recoverable.

Are there any aspects of Jackson that you would like to see reviewed?
It is vital the damages-based agreements (DBAs) legislation is reviewed immediately with a view to ensuring DBAs are available and workable forms of alternative funding for the Bar. At present the uncertainty created by the language and stipulations within the regulations is such that the take up of DBAs is believed to be almost non-existent. This is unacceptable in circumstances where the DBA regime was intended to fill a gap in funding and provide a workable solution to the abolition of the recoverability of success fees in CFA funded cases.

How do you see Jackson developing over the next year?
There will continue to be a spike of relief from sanction skirmishes and an increase in casualties falling foul of time deadlines. More Court of Appeal guidance is also likely to be required on the application of Mitchell. However, as the system settles down, a greater emphasis on agreements between the parties as to timetabling is likely to prevail over satellite disputes. Judges and lawyers will become more familiar with the principles behind budgeting that will shorten the process and enhance its impact on cases.

Interviewed by Rachel Moloney.

The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.

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About the author:
Kathy specialises in restructuring and cross-border insolvency. She qualified as a solicitor in 1995 and has since worked for Weil Gotshal & Manges and Freshfields. Kathy has worked on some of the largest restructuring cases in the last decade, including Worldcom, Parmalat, Enron and Eurotunnel.