The Harrison Drury Blog

The impact of new legal review on property litigation

Judge's desk in a courtroomLord Justice’s Jackson’s long awaited (further) review of civil litigation costs has finally been delivered. Laura Hallett Lea, associate in the property litigation team at Harrison Drury, explores the report and discusses the potential outcomes.

The Jackson reforms were originally brought into force in 2013 to boost efficiency and reduce litigation costs. It was envisaged that they would limit the amount of legal costs that could be recovered by the ‘losing’ party.

Originally, fixed costs only applied to personal injury claims to the value of £25,000 but in 2016 Lord Justice Jackson sought to impose this limit on all claims up to the value of £250,000. The fixed costs were planned to be a maximum of £70,000 inclusive of VAT and fees.

Had this proposal come into force, access to justice may have been negatively affected, particularly in higher value and more complex cases which can’t be run to trial on a small budget. Therefore, a client with an important and valuable claim or a defence with a high prospect of success could be faced with tens of thousands of unrecoverable costs – even if the case was run efficiently. 

The new proposal

However, Lord Justice Jackson has backtracked significantly as he now concedes that fixing the level of recoverable costs is not possible without reforms to existing procedures.

His latest report proposes a fixed grid of recoverable costs in relation to all fast-track cases – those up to the value of £25,000 that can be disposed of at a one-day trial.

His report also seeks to create a new intermediate track for claims up to the value of £100,000. It is proposed that this will relate to cases which can be heard at a trial in three days or less and with no more than two experts on each side.

Lord Justice Jackson suggests piloting a ‘capped costs’ regime for businesses and property cases up to £25,000. This pilot would adopt the procedures currently used by the intellectual property enterprise court.

If the pilot is successful, it is envisaged that the regime should be made available at the judge’s discretion for any suitable case in the business or property courts.

It is also proposed that recoverable costs in judicial review cases that last for days and generate huge costs are limited by introducing costs management, A grid for recoverable fees ring fencing fees in more complex cases is also proposed.

In concluding his report, Lord Justice Jackson acknowledges that work must be undertaken to streamline the litigation process at the same time as implementing the new costs regime. This will go some way to controlling the amount of work which is required by solicitors and their clients.

So, what happens now?

Historically, the law society have been critical of Lord Justice Jackson’s proposals and have suggested that applying fixed costs to highly complex cases would be inappropriate and undermine access to justice.

However, they have welcomed the review’s proposals as “good news for solicitors and consumers alike” and they acknowledge that the one size fits all approach originally suggested would have made many cases financially unviable.

Lord Justice Jackson’s most recent review of litigation costs must now be considered by the government before any of his proposals can be implemented.

Harrison Drury welcome reforms which promote greater efficiency in litigation. The conclusions of this report show that feedback from solicitors and their clients has been considered, it recognises that efficiency in the civil litigation system cannot be achieved by slashing the costs that can be recovered – but not making improvements to the system as a whole.

It is promising that Lord Justice Jackson has reconsidered his stance with regards to fixed costs and it is hoped that these new, updated proposals will have a positive effect on litigation and recoverable costs, while maintaining a positive effect on access to justice.

Harrison Drury has a team dedicated to advising clients on a wide range of issues relating to property litigation. For more information on this review, contact Laura Hallett Lea on 01772 258321.

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