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Lord Justice Jackson has repeated his calls for an extension of fixed costs, this time with a recommendation it should apply to all claims with a value up to £250,000 and also produced a proposed matrix of the fixed costs that should be payable.
One of the reasons advanced in favour of an extension of fixed costs is:
“My impression is that the profession is now more willing to accept fixed costs than it was in the past. This is for two main reasons. First, such a regime would dispense with the need for costs budgeting, which not everyone enjoys.”
It is not entirely clear whether the irony is lost on Jackson LJ of justifying fixed fees as a way to avoid unpopular costs budgeting when costs budgeting one of the key Jackson reforms.
The ultimate irony is where this suggestion leaves the bulk of the Jackson reforms. Those reforms introduced a number of controversial measures (eg an end to recoverability of additional liabilities, Qualified One-Way Costs Shifting) and convoluted measures (eg costs budgeting, Qualified One-Way Costs Shifting (again)), in a report running to 557 pages, in an attempt to achieve proportionality (all at considerable disruption to lawyers and the courts in the implementation). A massive extension of fixed fees would make the majority of the Jackson reforms entirely redundant for the majority of cases (no costs budgeting, costs management, provisional assessment, new bill of costs, etc). Fixed fees across the board was always an easier (if not necessarily better) way to ensure proportionality than the bulk of the previous reforms already introduced.
Jackson LJ recommends that, at least initially, fixed fees are introduced for all claims up to £250,000:
“The first question is whether we should be fixing costs for all civil cases (like Germany and New Zealand) or just for the fast track and the lower reaches of the multi-track. This is a policy decision for others. I would favour the latter course (as recommended in my Final Report), but I acknowledge that some favour the former course. There are two particular reasons why I favour adopting the latter course: (i) Switching to a totally fixed costs regime for all claims, however large, would be too great a change for the profession to accept, certainly in the short term. The justice system only functions because of the high level of support which the profession provides.”
This is the first suggestion I have heard that any element of the Jackson reforms was ever meant to please the legal profession. It is difficult to believe that the final report would have remotely resembled its final form if that was what was intended. Secondly, if a proposal to extend fixed fees is now intended to attract a high level of support amongst the profession, surely this is being looked at the wrong way around. Fixed fees for all civil claims up to £250,000 will impact on the vast majority of claims, the vast majority of litigants and a huge proportion of the legal profession. Conversely, excluding claims above £250,000 will impact on a relatively small number of litigants and a small proportion of the legal profession. Not switching to a totally fixed costs regime for all claim will not lessen the impact for the profession as a whole, it will simply mean that the impact falls almost entirely on large parts of the legal profession whilst leaving other smaller parts almost entirely unaffected.
Surely it would make more sense to pilot an extension of fixed fees for cases worth over £250,000 only. We have repeatedly been told that City firms are much more experienced in providing their client with clear budgets and that legal costs are less of a concern for commercial litigators. If a pilot is a success, we can then extend it downwards.