Expansion of fixed legal costs is “perverse” and will only benefit deep-pocket defendants, says Hodge Jones & Allen

Fixing legal costs when they are not in the control of claimants is “perverse and unfair”, leading London law firm Hodge Jones & Allen has today warned Lord Justice Jackson.

It has also told the judge, who is conducting a review of whether to expand the application of fixed recoverable costs, that government statistics show the most contested damages litigation by volume are personal injury, clinical negligence and civil liberties, along with some housing disrepair litigation.

This litigation is characterised by huge disparity of resources of the parties and fixed costs will only benefit deep-pocket defendants, who generally do not think much about proportionality when fighting a case.

The judge is looking at extending fixed costs to cases worth up to £250,000, which the firm’s analysis of Ministry of Justice figures indicates amounts to around 9,000 cases a year – less than half of 1% of all civil claims. Of these, most are personal injury matters.

The playing field between impecunious claimants and well-funded defendants is only made reasonably level by the existence of the conditional fee agreement regime. Without this, the firm said, “civil justice would not have any meaning for most of the population. At present we have such a system but fixed costs in our view would upset the balance significantly in favour of the defendants”.

The response went on: “It would be wrong, and indeed perverse, to fix recoverable costs in the multi-track by reference to damages when such costs are bound to be less than actual and necessary costs and the costs are largely determined by the litigation conduct of the defendants (and evidence, court and CPR requirements) and not the claimants.”

It said fixing costs without having any control of the length and complexity of the litigation means that claimant lawyers will have no idea of the extent of their costs which can be recovered and therefore how much will have to be deducted from client damages and indeed if the case is viable at all.

The current system controls defendant behaviour by making them pay for their tactics, while assessment regime already acts as an effective break on excessive costs building.

Instead, Hodge Jones & Allen said that to save and reduce costs, Jackson LJ should consider:

• Financial penalties for defendants’ tactics, especially for late admissions or settling at the door of the court;
• Simplifying procedures;
• Changing evidential burdens, for example the burden of proof;
• Speeding up the courts by investment in IT, staff, and buildings; and
• Introducing an IT interface for courts and litigants to create paperless courts and online filing.

Fixed recoverable costs have their place, the firm said, but only in lower value, non-complex cases where issues are straightforward: “A ‘one size fits all’ grid across the breadth of civil litigation would in our view be disastrous for those seeking redress. A fixed costs system as advocated fails to address defendant behaviour and could, indeed further incentivise undesirable behaviours.”

Patrick Allen, senior partner of Hodge Jones & Allen, recently welcomed Sir Rupert Jackson to the firm to discuss his review.

He says: “We understand that to defend and deny is natural until a defendant has seen all the evidence. The harm comes in denying the successful claimant the cost of proving their claim when the work was all necessary due to the law, the CPR and the courts and the approach of the defendants.

“In particular, we say that fixed costs have no place in Human Rights Act claims and civil liberties and fatal claims, while they would end effective disrepair litigation by making them uneconomic.

“Lord Justice Jackson must look at this issue in the round, rather than from the overly narrow perspective of the relationship between damages and costs. There are many reasons why costs are not proportionate to damages, and they often have little to do with the claimant.”

Ends

For further information, please contact:
Kerry Jack, Black Letter Communications kerry.jack@blacklettercommunications.co.uk
020 3567 1208.

Notes for Editors

Hodge Jones & Allen

• Hodge Jones and Allen is one of the UK’s most progressive law firms, renowned for doing things differently and fighting injustice. Its managing partner is Patrick Allen.
• For almost 40 years’ the firm has been at the centre of many of the UK’s landmark legal cases that have changed the lives and rights of many people.
• The firm’s team of specialists have been operating across: Personal Injury, Medical Negligence, Industrial Disease, Civil Liberties, Criminal Defence, Court of Protection, Dispute Resolution, Employment, Family Law, Military Claims, Serious Fraud, Social Housing, Wills & Probate and Property Disputes.
• Co-founder Patrick Allen is still at the helm of the firm he co-founded in 1977.
• In 2016 the firm launched Hearing their voices – a campaign to raise awareness and build conversations around the issues and the injustices we might all face.