Are judges interested in legal costs?

Wednesday 18 April 2012 by Rachel Rothwell

In a year’s time, everything is set to change in relation to lawyers’ costs.

Among Lord Justice Jackson’s many and ambitious plans are a new rule on how to decide whether legal fees are proportionate (met with scepticism by many experts, it must be said), a new process for controlling costs from an early stage with electronically submitted costs budgets, and a new, more efficient, way of dealing with costs assessments on paper in the first instance, rather than incurring the expense of a court hearing.

The driver behind it all is Jackson’s desire to tame an unruly costs beast that has got out of control in recent times. But the reforms will work only if those responsible for implementing them are prepared to deal with what one lawyer describes in April’s edition of Litigation Funding magazine as ‘the elephant in the room’, meaning the judiciary.

Speaking to solicitors immersed day-in, day-out in litigation, there is a concern that actually it is not the rules that are wrong, but the way judges are failing to stick to them; for example by not looking at costs estimates properly or ensuring that parties do not stray from them. Many lawyers see nothing amiss with the current Lownds test to assess the proportionality of costs; the problem is that it is simply not applied properly.

Too many judges lack the understanding, or indeed the will, to address costs issues properly (after all, in the High Court at least, many of those on the bench are former barristers who have never even delivered a bill; they have had well-paid clerks to deal with money matters). Indeed, there is a line of argument that Jackson’s reforms would not have been needed had the judiciary made proper use of its considerable existing powers to keep a lid on costs and manage cases effectively.

The lawyer quoted in Litigation Funding, who was speaking under the Chatham House rule at a recent conference, suggested that some judges can almost be seen rolling their eyes when, at the end of a long trial, the issue of costs arises; it is not as intellectually stimulating as the technical point of law with which they have just been dealing. He added that it is not uncommon to find barristers ill-briefed on costs aspects at the end of a trial.

As Jackson himself acknowledges, judicial training will be essential if his reforms are to succeed. But clearly training alone will not be enough.

With changes to the rules on proportionality, costs management and costs budgeting, Jackson has given judges plenty of new tools to begin fixing the over-active costs machine; but ultimately, none of these will be effective unless there is a change of mindset about costs from the judiciary, and a willingness to tackle the issue head on.

Rachel Rothwell is editor of Litigation Funding magazine, providing in-depth coverage on costs and the financing of litigation.