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Fixing legal costs in litigation scaled back in the UK

According to the Law Society of England and Wales :-

A move to apply fixed costs for all legal claims up to the value of £250,000 has been significantly scaled back, boosting the principle of justice delivering fairness for all.

Unveiling his long-awaited review of the costs regime, Lord Justice Jackson today recommended that fixed recoverable costs should apply to claims valued up to £25,000, with a further fixed recoverable costs regime for some cases of modest complexity up to £100,000. A significant decrease in the limit he had previously called for.

Law Society president Joe Egan said: “Lord Justice Jackson’s views are of huge interest to all involved in the civil justice system. The outcome of this review is good news for solicitors and consumers alike – a ‘one size fits all’ approach to the regime would have risked making many cases economically unviable.”

It is essential for justice that a successful litigant is able to recover reasonable legal costs, instead of a pre-determined fixed sum. If the sum for legal costs is fixed then for at least some cases, the costs that a successful party could recover will fall significantly short of the costs they have incurred. Either they would have to meet the costs out of their own pockets, or out of their compensation, or the solicitor would have to do the work for the recoverable costs only.

Joe Egan commented: “We’re pleased that Lord Justice Jackson has listened to the strong feelings from solicitors and has reduced the scale of his original plans. In particular, we welcome his recognition that clinical negligence claims require a bespoke process, and claims should only be fixed up to £25k – this is in line with Department of Health proposals.

“Clinical negligence claims are brought by people who have been injured through no fault of their own as a result of negligent care. These patients need specialist legal advice to help them get the compensation they are entitled to in law.

“This review contains a high level of complexity in terms of determining the correct level of fixed recoverable costs, and we look forward to working with our members and stakeholders to consider the proposed reforms. The new ‘intermediate track’ would bring in fixed costs for cases of somewhat higher value. We will need to consider the detail of this very carefully to see whether it can work without harming access to justice.”

The Law Society does not oppose fixed recoverable costs in principle. For genuinely low value and straightforward claims, fixed costs can offer some assurance for both sides in litigation and they avoid protracted disputes about the level of costs.

Joe Egan explained: “Fixed recoverable costs require a fixed process to be workable, as fixed costs do not reduce the work done by solicitors. We hope that the process can be streamlined for cases affected by fixed costs before they’re introduced, in order to ensure that the costs will be manageable for solicitors and claims can still be brought.

“We still have reservations that introducing fixed recoverable costs without robust empirical evidence will negatively affect access to justice, if the impact of these proposals is not carefully assessed. This is work that should be done during the Ministry of Justice consultation period and prior to implementation.

“We look forward to engaging with members to understand their views and concerns.”