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Costs management will be 'entirely normal discipline' within a decade, says architect of English court reforms


Standard costs management orders and mandatory training for civil judges should be introduced, in order to address some of the criticisms that have emerged about the regime over the past two years, the architect of the reforms has said.

However, although parts of the regime should be improved, the rules were "in the public interest" and "here to stay", Lord Justice Jackson said, in his first major speech since part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO) came into force in April 2013. Speaking at the annual Harbour Litigation Funding lecture, Jackson set out the benefits of the new regime in practice and made a number of practical suggestions for improvement in areas where problems had arisen.

"The first and most important conclusion to be drawn from the experience of the last two years is the same as that which was drawn from the pilots: costs management works," Jackson said. "When an experienced judge or master costs manages litigation with competent practitioners on both sides, the costs of the litigation are controlled from an early stage. Although some practitioners and judges regard the process as tiresome, it brings substantial benefits to court users."

"I predict that within ten years cost management will be accepted as an entirely normal discipline and people will wonder what all the fuss was about," he said.

Legal costs expert Keith Levene of Pinsent Masons, the law firm behind Out-Law.com said that Jackson had delivered a "positive paper" which showed that he remained willing to "revisit, restate and give views" on how his recommendations were being implemented and whether further changes were necessary.

"Two years on, Lord Justice Jackson has taken a considered view of how costs management has 'bedded in', setting out the clear benefits of the new regime and recommending pragmatic solutions to any issues that have arisen," he said. "Notwithstanding those issues, it is clear that the new rules have been a resounding success."

Since April 2013, most parties in civil court actions have been required to prepare and exchange costs budgets for agreement by the court at the start of the trial. Parties that do not file a budget, or do not do so in time, can now be heavily penalised by judges. Amendments to an approved budget can be submitted at any time but will only be approved at the discretion of the court; and costs recoverable by the winning party will be linked to the approved costs budget.

Two years on from the introduction of the new regime, the Civil Procedure Rule Committee has set up a sub-committee chaired by Mr Justice Coulson to review the operation of the costs management rules and report back. Although he is not involved in this process, Lord Justice Jackson used his lecture to make some recommendations for reform that he "respectfully invite[d] that sub-committee to consider".

Among those recommendations was a proposal to replace the recent amendments to the civil procedure rules (CPRs) introducing a presumption in favour of costs management with "criteria to guide courts in deciding whether or not to make a costs management order". The amendments had led to courts making costs management orders in "virtually every case", leading to delays that did not "promote access to justice at proportionate cost", he said.

The problem was particularly pronounced in clinical negligence cases, and should also be tackled through the piloting and introduction of pre-action costs management in cases where the incurred costs tended to be higher, he said. Jackson said that he would be happy to prepare a detailed paper on the issue if requested to do so by the rule committee. He also suggested that clinical negligence cases which were awaiting case management conferences due to be held between October 2015 and January 2016 be released from the requirements to help clear the backlog.

However, in a subsequent speech Master of the Rolls Lord Dyson said that he was concerned that to allow judges discretion on whether to refer a case to a case management conference in exceptional cases could backfire.

"I do not doubt that, if the rule/practice direction were amended to reflect this principle, judges would do their best conscientiously to apply it," he said. "But I fear that the lack of resources card would be played in many cases and that there is a real danger that costs management would become the exception, and not the rule, in clinical negligence cases."

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