REUTERS | Denis Balibouse

Fixed costs: a trip down memory lane

Jackson LJ’s proposals to introduce fixed costs in multi-track cases worth up to £250,000 make me think back to the days of County Court scale fees, and a quick dig around some dusty books turned up the County Court Practice for 1995. There I was reminded that, until 30 June 1991, there were four scales of costs in the County Court and, from 1 July 1991 up until the advent of the CPR, three. If you succeeded in a claim worth more than £3,000, then your costs were taxed on the giddy heights of “Scale 2”. Between £100 and £3,000, they fell within Scale 1, and between £25 and £100, they were caught by the Lower Scale.

County Court scale costs

For those without long teeth or long memories, the entitlement to Scale 2 costs meant, in effect, that your costs were taxed as if they were High Court costs.

Scale 1 covered everything from the institution of proceedings through to taxation of costs. At each stage there was a specific range or, less commonly, an hourly rate (for example, attending on a counselling conference was charged at £13 per half hour), and sometimes costs were calculated on a per page basis.

Based on the Retail Prices Index, inflation since 1995 has been approximately 75%. £26 per hour translates, therefore, into £45.50 per hour. Perhaps, when Jackson LJ was working on his matrix for fixed costs in clinical negligence cases, he had that sort of notion of hourly rate in mind.

High Court scale fees in personal injury cases

In the High Court, apart from fixed scale fees, there was a scale of fees for counsel in the Queen’s Bench Division for normal personal injury cases where the value exceeded £50,000. The scale did not apply to QCs and a higher fee could be sought. Apart from conference fees, the fees were all fixed and did not cover a trial. A short summons before a master would merit £125 on the brief, an opinion on liability was £90, one on quantum was £100 and an advice on evidence was also £100. Again, these fees when increased by 75% for RPI inflation seem, to today’s eyes, very low. When was the last time counsel in a Queen’s Bench personal injury action was either allowed or given a budget of only £175 for a full advice on quantum?

Plainly, the introduction of the CPR, which had as one of its aims the control of costs, hardly had that effect. The assessment of costs on hourly rates must have been one of the contributory factors to the large increase in the cost of litigation seen since the introduction of the CPR. The reintroduction of fixed costs is, of course, an attempt to row back from that position.

Need for simplification of procedures

Plainly, if Parliament so decrees, very low fixed costs can be imposed even in relatively complex clinical negligence cases. Whether or not that is fair is another matter, but it seems to me that if fixed costs of that nature are to be imposed, then the procedures for the determination of those claims must be simplified as well. If low fixed costs are imposed without the commensurate reforms necessary to make procedures simpler, then grave unfairness, especially to claimants, can be anticipated. Simply put, in anything other than the most straightforward of cases, proper resources with proper levels of expertise will not be available.

We are, I would expect, a long way from going down the continental road of court-appointed experts. A halfway house, however, might be for cases where fixed costs apply on the multi-track to be dealt with by simplified procedures that would include:

  • Modified disclosure rules, so that a party would only have to disclose documents upon which they relied at the same time as they serve their witness statements.
  • Single joint experts as a rule.
  • A limit on the number of experts, so that if there were more experts or if the court considered that the parties should each have experts on any area, the case would come out of the fixed costs regime.
  • There could be a limit on the number of witnesses and the length of witness statements.
  • The court could give directions upon service of the defence without a hearing.
  • The directions could take the claim right through to a hearing date.

So far as directions are concerned, there could be a direction that no surveillance is permitted without a without notice application. If a defendant makes such an application and succeeds, then the court would direct a time by which such evidence has to be served and that the matter should be listed for a further hearing at which further directions, including taking the case out of the fixed costs regime, would be considered. A trial could be limited to two days and the parties directed to agree a timetable, which could be departed from only with good reason.

It might be said that much of the above is impractical or unfair or both. I put these ideas forward not as any well-thought-through plan, but simply as an indication of how we might seek to wind back the clock on the cost of litigation. Fundamentally, what I am saying is that it is no good simply imposing fixed fees without getting to the root of the problem, which lies in the procedures that parties are obliged to adopt. Without simplified procedures, fixed fees, in my view, either will not work or will not work well.

Whilst straying down memory lane, I have just been involved in a case on the assessment of costs where the paying party raised an objection based on the Consumer Protection (Cancellation of Contracts Concluded away from Business Premises) Regulations 1987. Those regulations were revoked on 1 October 2008. This made me wonder whether there were any cases left out there where the Conditional Fee Agreements Regulations 2000 still applied. Probably not, but it is nice to see that regulations which have long been revoked, and indeed whose replacement has even been revoked, can still come back to bite us.

39 Essex Chambers Simon Edwards

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