REUTERS | Charlie Saceda

Brexit and costs

You may think that the law of costs will sail on majestically, despite the political turmoil of the last few weeks. Who could have predicted, however, that instead of Michael Gove as Secretary of State for Justice and Lord Chancellor, we would have Liz Truss?

Her appointment has brought forth trenchant criticism from, amongst others, Lord Falconer, but countervailing support from Lord Pannick. I express no view on her suitability for the post but, rather, want to look into her personal and political background to see if there are any hints on how she may deal with some of the issues that remained in Michael Gove’s in-tray concerning litigation funding before his sudden departure.

Liz Truss’ first foray into politics was in her university days at Oxford as a Liberal Democrat. After graduating, however, she joined the Conservative party. She had a short career as a commercial manager with Shell and as economics director at Cable & Wireless, where she qualified as a management accountant.

Her interests since becoming an MP in May 2010, apart from local issues, appear to have centred on education and free enterprise. She was a member of the House of Commons Justice Select Committee from March 2011 until September 2012, when she became Undersecretary of State for Education and Childcare. She was Secretary of State for Environment, Food & Rural Affairs from July 2014 until she became Lord Chancellor.

She has a reputation for being someone who has fixed ideas rooted in her belief in free enterprise. She has been accused of being zealous in volunteering large cuts in her departments.

How might this translate itself in terms of litigation funding? Perhaps her enthusiasm for free enterprise might persuade her to think radically about the need for such tight regulation of, for example, contingency fee agreements, so that real progress could be made on having simpler and more liberal damages-based agreements regulations. Of course, that is not likely to be very high up her “to do” list, but it might fit in with what is perceived to be her philosophy.

I would expect any measure that is likely to save the government money is also likely to have her support. I have in mind here, particularly, the Jackson/Dyson proposals for fixed fees across the multi-track. Such fixed fees might very well save the NHS substantial amounts and, therefore, might very well appeal to Liz Truss.

Given her apparent inclination towards small government, I would doubt very much whether she will favour any suggestion that the Legal Aid system should be more generous. Rather, I would expect her to try to introduce as much free enterprise and market competition as possible. Who knows, perhaps she will try to introduce tendering to advocacy services provided by the bar. Also, we should be prepared for more deregulation in the legal market generally.

She inherits, it is said, a discontented judiciary. Experience of using the courts shows how far cuts in the court service have reduced staffing levels, causing, often, confusion and delay. Coupled with very high fees, there is much talk of an increase in the use of arbitration, not to mention alternative dispute resolution. Again, Liz Truss’ free enterprise instincts might very well persuade her that that road is a good one to travel. Perhaps, then, we can see far more encouragement for the use of non-court means of the resolution of disputes. This is perhaps an area where costs law has somewhat lagged behind.

Wherever Brexit takes us as a country, costs lawyers should be astute to see where the new regime will take us and take advantage of any opportunities that arise.

39 Essex Chambers Simon Edwards

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