Lord Woolf’s 1996 review of the rules and procedures of the civil courts in England and Wales aimed to improve access to justice by three principal means: reducing the costs of litigation; simplifying the procedural rules and modernising terminology; and removing unnecessary complexities in the litigation process.

In keeping with these aims and to ensure that litigation was handled in a more just and efficient manner, the then existing rules for the High Court and County Court were combined, and new standardised procedural rules (The Civil Procedure Rules « CPR ») were introduced in 1999. Following their introduction there was a new-found focus on co-operation between the parties and the early settlement of matters (usually through mediation), which did result in a reduction in litigation. However, parties’ costs remained high, and in an effort to combat this, Lord Justice Jackson was tasked to undertake a review of civil litigation costs in 2009, leading to his reforms of 2013. 
With over 20 years having passed since Woolf’s review, there have been a number of key changes to the litigation process, but is there still scope for improvement?
 

Proportionality

The CPR resulted in a new procedural code with the overriding objective of enabling the courts to deal with cases « justly », as defined. The Jackson Reforms went further, adding the wording « and at proportionate cost » to the overriding objective. A new test of proportionality was also introduced in 2013, providing that costs will be deemed proportionate if they are balanced with (amongst other things) the quantum, complexity and importance of the case. The rule expressly states that disproportionate costs may be disallowed or reduced even if they were reasonably or necessarily incurred (a reversal of the previous position).

This is a more rigorous test, with the greatest impact on small to medium-sized cases, where there is a greater risk of costs being disproportionate to the value of the claim. Even in high value commercial cases, recent case law illustrates that the courts are taking a tougher stance against excessive costs.
 

Case management

Woolf wanted to place greater responsibility for case management in the hands of the court, rather than the parties. Although timetables were made more stringent and cases were coming to trial more quickly, many parties/their legal advisers still failed to comply with court timetables, resulting in overall delays. Inevitably, parties incurred more costs in attempting to rectify such delays.

Consequently, Jackson imposed stricter rules on compliance with court orders. As a result, more claims were struck out and adverse costs orders were made. This tougher stance however did not achieve its purpose, with much satellite litigation ensuing. Three significant cases were brought before the Court of Appeal in 2014, which adopted a more pragmatic test for sanctioning non-compliance rather than the draconian measures that had started to prevail.

Overall, the courts have taken a more proactive approach to case management, often requiring parties to justify why proposals for progressing a claim to trial are felt to be proportionate.
 

Costs

The CPR introduced the summary assessment of costs (the immediate assessment of a party’s costs following a hearing of one day or less), which was effective in keeping tabs on the costs of interim applications, but the costs at the conclusion of trial were still generally high.

Jackson wanted greater planning and project management of litigation to enable the courts to manage the costs of litigation. Accordingly, he introduced the concept of cost budgets. Parties are required to budget for various phases of litigation at the outset and then share those budgets with their opponents and the court. Where required, the budgets should be amended as the case progresses, and costs will usually be awarded at the end of a matter by reference to the budget. The budgets can be agreed between the parties or subject to the court’s management. Failure to provide a budget or overspending will restrict the amount of recoverable costs.

These changes were implemented to make each party’s liability for their opponent’s costs more predictable from the outset and to assist in litigation planning. However, the general view amongst practitioners is that the cost budgeting exercise is in itself expensive, and unduly burdensome, especially as it can be difficult to predict costs accurately for the entire litigation process at the outset. It can also be difficult for parties and the court to determine whether budgeted costs are « just » and « proportionate », when the complexity and merits of the case may not yet be fully appreciated.
 

Other changes

  • In terms of funding litigation, English law is becoming more progressive. Solicitors are now able to enter into contingency arrangements with their clients, permitting them to use a percentage of the damages awarded, for their costs. In practice though, whilst the law changed in 2013, there has been little uptake, due to uncertainty in the regulatory framework.
  • Woolf narrowed the definition of disclosure to reduce the volume of documentation involved, thereby reducing the associated costs. However, parties continued to disclose vast numbers of documents to limit potential accusations of non-compliance with their obligations. The rise of electronic disclosure also resulted in numerous documents being disclosed. Jackson narrowed the scope further by introducing a « menu » of disclosure options to keep disclosure proportionate.  However, the usual standard disclosure order continues to prevail.  Additionally, parties are now required to provide a report at the outset, confirming the likely costs of disclosure before the disclosure exercise is commenced.
  • With regard to expert evidence, litigants and the courts will determine at the outset what issues the experts need to address, as opposed to just the field of expertise. Thus reducing the likelihood that time and costs will be wasted dealing with peripheral or unnecessary issues.
  • The reforms to witness evidence encourage the courts to use their powers to control witness evidence, particularly for cases which do not warrant extensive evidence. 

Room for more change?

The introduction of fixed costs recovery for claims of up to £250,000 is presently being mooted. Such restrictions would increase certainty, limit the potential for disputes regarding costs and would force parties to conduct litigation in a way that ensured the vast majority, if not all, their costs would be recoverable from their opponent. However, in practice, winning parties will likely remain liable to their solicitors for unrecoverable costs. Moreover, the application of fixed costs to complex cases would lead to many cases being economically unviable to pursue, thereby undermining the principle of access to justice.

A further substantial increase to court issue fees is also being considered. This would serve to steer more potential claimants towards the use of alternative dispute resolution processes, which often allow parties to negotiate settlement on a more personal basis, enabling them to preserve any commercial relationship if appropriate.
Changes to the cost budgeting exercise would be welcomed by practitioners. For example, budgeting in stages, rather than for the entire case at the outset of the matter, would result in a less onerous and expensive process. Although, the introduction of fixed fees as discussed above would alleviate some of the pressures of the current costs budgeting exercise.

It remains to be seen whether the proposed fixed costs and issue fee changes will be implemented and the effect they will have on the approach to litigation in England and Wales. Although we have come a long way through various reforms, litigation costs remain high and there is still a need to combat this.
  Contact : mariyam.harunah@squirepb.com
katie.nunn@squirepb.com
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