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The Final Countdown

So J-Day is nearly upon us.

 

J-Day (for those of you whose homepage isn’t www.justice.gov.uk) is not the author of that racket coming out of your teenage daughter’s bedroom, but is what some hip and happening lawyers are calling 1 April.

 

The J in question is Sir Rupert Jackson, the man behind a series of reforms to the civil justice system. His final report was published over 3 years ago. After much consultation (but, some would say, not enough) his reforms are to be implemented on 1 April. Just goes to show that someone at the Ministry of Justice has a sense of humour.

 

The man himself has said that after 1 April “litigants who substantially disregard court orders or the requirements of the CPR will receive significantly less indulgence than hitherto”.

 

For those of you who don’t do Judge-speak, this is the judicial equivalent of that gravel-voiced movie trailer chap saying that your life will never be the same again. “This time it’s personal” presumably wasn't far from Sir Rupert’s lips.

 

But as a sequel to the last major reforms of the civil justice system (W(oolf)-Day), how does J-Day compare – is it Die Hard 2 or more Die Hard 5?

 

There is no doubt that the Woolf reforms changed the way that a lot of litigation was conducted – they introduced the concept of proportionality into the way cases were run; there was more focus on resolution of cases outside the court; claimants were able to make settlement offers with consequences; disclosure was to be dealt with in a way appropriate to a case; judges were to manage cases and costs actively. So when you look at the changes to be brought in on J-Day and see all these areas covered again, you have to ask whether the reforms are fundamental or are just tinkering, albeit on a larger scale than normal.

 

There is certainly the potential for real change. On the face of it the new costs controls could put an end to the all too familiar situation of legal costs exceeding the amounts in issue. However, probably recognising that such controls would drive away some court users to other jurisdictions, Admiralty and Commercial Court cases were exempted from these controls and in a last minute change claims over £2m in a number of other Divisions were also exempted. No doubt there will be an increase in claims just exceeding this threshold.

 

Perhaps to compensate lawyers for the loss in income that might follow stricter costs controls, the Jackson reforms bring in a significant change in the basis on which we can charge. Damages-based agreements (DBAs) have been making some lawyers in other jurisdictions (notably the U.S.) rich for years. The “no win, no fee” CFA system we’ve had for a number of years allows lawyers to charge a success fee but it is still based on the time we spend on a claim rather than the financial result for the client.  DBAs by contrast allow lawyers to work for a share of the proceeds (up to 50% of damages for commercial cases). CFAs will continue to be an option for new cases, but the success fee (which can be an additional 100% of our standard fees) won’t be recoverable from an opponent and as a result CFAs are unlikely to be attractive for lawyers or their clients.  DBAs give clients far more certainty on costs and, in the right cases, will handsomely reward their lawyers. Expect to see many more DBAs and Claimant lawyers (freed from fees based on time spent) pushing for early settlements.

 

One thing we can be sure of though is that reforms such as these always generate satellite litigation as the courts and lawyers iron out the rules. Interesting for the lawyers involved, but perhaps not so great for their clients.

 

We’ll keep you updated on developments over the coming months.

 

 

 

 

 

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