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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, Simon James, a partner at Clifford Chance LLP, explains how litigation has changed under the Jackson regime.
What were the Jackson reforms designed to achieve?
The reforms were designed to make litigation costs more proportionate and predictable—laudable aims.
In 2008, the then Master of the Rolls was concerned about the increasing cost of litigation, particularly in light of the enhanced case management introduced by the Civil Procedure Rules 1998, SI 1998/3132 a decade earlier (the work of one of his Master of the Rolls’ predecessors). There were also subsequent legislative changes, such as those allowing success fees under conditional fee agreements (CFAs) to be recoverable as part of the winner’s costs.
The Master of the Rolls instructed Lord Justice Jackson to ‘review the rules and principles governing the costs of civil litigation and to make recommendations in order to promote access to justice at proportionate cost’. Lord Justice Jackson produced a preliminary report in May 2009, followed by a final report at the beginning of the following year. Most of the reforms recommended by the reports were introduced on 1 April 2013.
What are the main reforms?
The Jackson reforms, so far as they affect commercial litigation, include:
• a stricter approach to enforcing rules and orders, particularly time limits
• the winning party is unable to recover costs that are ‘disproportionate’ even if the costs are necessary for the conduct of the action
• the court can set the parties’ budgets in many cases—budgets don’t affect what parties can or must spend on litigation—they only act as a cap on the costs the successful party can recover from the loser
• standard disclosure is no longer to be standard—instead parties must prepare ‘disclosure statements’, following which the court will pick the appropriate form of disclosure from the menu in the rules
• success fees under CFAs are no longer recoverable in costs from the losing party—the winner must pay any success fee out of its winnings
• damages-based agreements (DBAs) are permitted meaning lawyers can enter into agreements with their clients under which lawyers are paid a share of the sum recovered by their clients in litigation
What has been your experience of the first year after the Jackson reforms?Confusion
There is no guidance as to
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