On 1 April 2013 the first wave of Jackson reforms was implemented into law. The reforms will amend various parts of the Civil Procedure Rules 1998 (CPR) and will also change the way that the courts address the costs of litigation. Much has been written about the proportionality of costs and success fees and 'after the event insurance' premiums becoming irrecoverable. However, this article focuses on some of the other amendments to the CPR.
General: The courts will take a tougher approach to parties that fail to comply with their obligations under the CPR and CPR rule 3.9 will make it more difficult for a party to apply for relief from any sanctions for non-compliance. All money claims will have to be issued online through Northampton County Court and, if defended, the claim will then be transferred to Salford County Court and then distributed to local courts.
Case Management: Case management conferences will only take place where there is a need for one and will involve rigorous analysis of the likely issues in the case. All other common cases will adopt standard case management directions.
Small Claims: The monetary limit for small claims has been increased from £5,000 to £10,000. The presumption that small claims costs rules will apply where the claim exceeds the small claims limit but has been allocated to the track due to agreement by the parties has been eradicated. Expert fees have increased from £200 to £750 on this track.
Disclosure: For multi-track cases, with the exception of those containing personal injury claims, will adopt a new approach in relation to disclosure. Parties will be obliged to file a report prior to the first case management conference which will contain all the documents that are relevant to the matters in issue, their location and the costs that may flow from standard disclosure. The court will direct the parties to agree disclosure from a list of options which are set out in CPR rule 31.5(6). Such options include orders that dispense with disclosure, that disclosure be given on an issue by issue basis or an order for standard disclosure.
Expert Witnesses: An estimate of the cost of instructing an expert and the issues that they are needed to address will have to be given by any party wishing to rely on expert evidence. So-called ‘hot-tubbing’, also known as ‘concurrent evidence’, will also be an option under the CPR. This allows for both sides experts to appear in court together and be questioned on the same issues by the Judge in each other’s presence. It also means that one expert can challenge the views of its counterpart directly. The procedure is often used in Australian court rooms and has been piloted in Manchester TCC and Mercantile Court.
Allocation: Allocation questionnaires will no longer be issued but rather, in all claims except the small track, a court officer will allocate the claim automatically after the defence has been filed. A notice of proposed allocation will be served on the parties and will contain directions along with a directions questionnaire to be completed by the parties. The decision of allocation can be challenged under CPR rule 26.3.
Budgets: In multi-track cases, there will be a greater emphasis on costs management governed by section II under CPR Part 3. Parties will need to consider at an early stage in proceedings an estimate of the time likely to be spent and the level of fee earner completing the work from pre-issue until trial. These ‘budgets’ must be filed and exchanged within 28 days of service of any defence. Litigants in person do not have to file these budgets but must be served with the budget of their opponent, if legally represented. The budgets will have to be approved or amended by a judge. These budgets can be re-visited throughout the proceedings with the final budget likely to be adopted when assessing the costs liability of the unsuccessful party.
If a party fails to file a budget, then it will be assumed that the costs incurred are the court fees only. If parties agree the budgets between them, then the court cannot intervene even if the costs are considered to be excessive. An agreed or approved budget can only be exceeded if the party can show good reason for the excess. There are exempted claims which include cases in the Admiralty and Commercial Courts, commercial cases worth more than £2 million and cases in the Chancery Division or specialist courts that are directed to be exempted. The courts’ powers to make cost capping orders have also been extended under CPR rule 3.19(5) although parties can apply for such an order themselves.