Lord Justice Jackson recently conducted an important review of costs in civil litigation. Some of his recommendations have been implemented (known as the "Jackson Reforms") and others are being considered.
The recommendations are aimed at addressing high litigation costs that are claimed to prevent access to justice by keeping such costs at a level proportionate with the amount being claimed in each case. One of the reforms already in place is the fixed costs regime for personal injury claims of up to £25,000 and Intellectual Property claims up to £500,000.
Lord Justice Jackson has now outlined a proposal for a new regime of fixed costs applicable to all civil claims up to £250,000 according to a grid of rates (excluding disbursements other than counsel, the costs of enforcing any order and VAT). The costs recoverable would be:
- £18,750 for claims up to £50,000.
- £30,000 for claims up to £100,000.
- £47,000 for claims up to £175,000; and
- £70,250 for claims up to £250,000.
Lord Justice Jackson has urged the government ministers to adopt the proposed new regime by the end of 2016.
While this proposal has been received with criticism by the Law Society and the Bar Council, the Ministry of Justice has announced that it would consider the proposal carefully.
COMMENT: Lord Justice Jackson's proposal is a further move to limit the amount of costs that a party can recover in litigation, to those costs which are deemed proportionate to the value of the claim. This could potentially mean that a party may not recover a significant part of its costs even if it is successful in the litigation and the costs were "necessary and reasonable". The level of costs are also often influenced by the complexity of the claim not just its value. This is likely to be the shape of things to come and the ability of lawyers to keep litigation costs under control will become an ever more valuable asset.