Costs and the rule of law

The working year has begun.

On the horizon are more reforms to the law and practice of costs, including the move to digital bills and J codes, the tortuous marrying up of costs budgets and bills, the introduction of fixed costs for NIHL claims and clinical negligence claims, the rise in the Small Claims Track limit to £5000 for personal injury claims and the abolition of the exception to LASPO 2012, for insolvency proceedings.

Reforms particularly procedural reforms, can often seem to fall into two types: ambitious top down plans, formulated to make existing procedures better or to introduce a new and improved way of doing things or perhaps more commonly, haphazard and bit piece reforms, reactive to a particular perceived deficiency, largely for the benefit of one sectional interest at the expense of another.

In truth, such a dichotomy is false: all reforms have their genesis in sectional interests, who promote vigorously their preferred course of action, seeking to overturn the natural bent to inertia inherent in any system.

If the groundswell for change, is sufficiently wide and prolonged, then reforms can take on a widespread nature and achieve systemic change. Equally, caution and a very human desire to keep to the status quo, means that probably the majority of reforms are piecemeal.

Surveying the landscape of the law and practice of costs, in early 2016, including the wreckage left after the Jackson reforms and the introduction of LASPO 2012, the conclusion I draw is that not only does the current state of the law of costs lack all symmetry or consistency of theme, it is failing to meet some of the most basic requirements of a legal system underpinned by the rule of law.

Confining myself to civil proceedings, it is possible to note that the personal injury market is well served, by an intricate and prolix code of fixed costs for low value claims, notable by its absence in relation to other types of dispute.

Due to the existence of qualified one way costs shifting a person can bring a personal injury claim, and not go bust if they lose: but if someone has an environmental dispute or a discrimination claim they may be practically prevented from bringing it, by the absence of public funding, the absence of costs protection and not even the cold comfort of being able to predict their liability for costs should they lose.

The decimation of Legal Aid, has meant that access to justice is dependent in large part, in lawyers being willing to defer or make contingent their fees, but if lawyers are unwilling to do so, then the current system sees no constitutional problem with the lawyer through their caution, effectively acting as a de facto gatekeeper to the court.

This is a massive constitutional shift, which transfers far too much power to the lawyers, at the potential expense of the citizen, but inevitable for those cases for which contingency fees are the only means of funding litigation.

Public law proceedings are even more restricted by funding restrictions and costs rules; the number of lawyers who have the necessary skillset and are in the right place, to challenge the egregious actions of local authorities or central government is dwindling, and the limited protection provided by the Civil Procedure Rules for Aarhus claims or costs capping orders made under the common law jurisdiction adds a deliciously random quality to the prospects of a public law claim proceeding.

The inescapable conclusion that I draw, is that if you were looking to draw up a fair, reasonable and efficient set of provisions for costs to underpin a fair, reasonable and efficient system of civil justice, not in 100 years of effort would you come up with the present system.

So what should costs law and procedure look like? And is a search for overarching principles a vain pursuit?

I do not believe that it is a vain pursuit: I think that the law and practice of costs needs to return to its origins: as a means of facilitating justice, rather than acting as an impediment to it, and the simplest touchstone is to ask how any rule, provision or criterion, runs with the grain of a civil justice system which does in fact provide justice, the vindication of the substantive rights given to citizens by our laws.

Thus the starting point must be that the first and foremost purpose of the civil justice system is to provide a fair and efficient way for the citizens of this country at affordable cost, to resolve their legal disputes with each other and the state, avoiding civil disorder or self help or simple injustice, by legal rules conferring rights and obligations which conform with the rule of law.

Last year I attended the excellent conference run each October by the Public Law Project and listened with interest to the opening address by Lord Justice Laws, which included consideration of the rule of law, both the “thin” theory and the “thick” theory, beloved of legal jurists to describe different aspects or interpretations of the meaning of the phrase “rule of law”.

The differences between the theories perhaps are less significant than the similarities; most lawyers would agree that the rule of law means as an irreducible minimum, a legal system governed by publically declared and available laws, which apply with prospective effect and which apply generally and with equality and certainty to all.

It follows that any laws (including those pertaining to costs) must also comply with and be part of the rule of law: a settled predictable set of rules, which apply generally and with equality and certainty to all. This in turn means that there must be judges trained in and conversant with the law, a system for appeals to ensure that the laws are actually applied and applied consistently and means of enforcing decisions of the court, made according to law.

In a post industrial society of more than 60 million citizens any body of rules, must cater for the myriad complexities of the society it applies to, will be necessarily complex and thus a need for a legal profession to advise upon and interpret the law is arises, as an essential part of the rule of law. Such a profession must be paid for: the question is by whom and on what basis and the law of costs thus takes on a constitutional role.

The practice of costs shifting, whilst not essential for the rule of law, must if it applies result in predictable awards of costs, whether by fixed costs or otherwise, in order to comply with the overriding requirements of the rule of law.

The courts are for the losers as well as the winners, and it is antithetical to the notion of justice that a dispute must end with the ruin of the losing party, due to excessive costs.

Equally, whilst not essential that the state directly funds the legal profession, it must put in place satisfactory measures, which ensure that the individual can access legal advice and representation and have their claims resolved in court.

Of course, these considerations are far removed from the daily bread of arguing the toss over yet another part 45 issue in the County Court, but by the time we come to leave 2016, we can but hope that the law and practice of costs is in a better state than it currently would appear to be.

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