Reform chief predicts “sweaty palms” over legal costs budgets

The Review of Civil Litigation Costs by Lord Justice Jackson (Jackson reform) is a regulation and prohibition on legal fees in relation to personal injury claims. The law is concerned with certain practices in relation to “no win no fee” and totally bans referral fees. Judge Ramsey, the person tasked to implement the Jackson reform believes that substantial compliance is only a matter of time. The main issue here is use of proper law costs draftsmen practices, and based on a few starter cases, solicitors can easily comply with the same. This is an important subject and everyone in the legal industry should be aware of future changes.

Specific Concerns
Lowering legal costs, especially in cases of personal injury, where lawyers usually collect a “referral fee” or a substantially higher fee for a “no win no fee” basis is a long time coming. In this regard there are several issues that have lawyers twitching. This includes but is not limited to:

1. Allowable recovery of costs, which as a general rule, to be limited to costs that have been “budgeted for”. In this regard law costs draftsmen would ask “Are there exceptions, and what are the exceptions, if any?”
2. To what extent will the court allow the “assumption of costs.” How will a particular cost qualify as capable of being assumed and what are the exceptions to the same if any?
3. The concern that the Jackson reform can be made to apply to other business models or litigation other than personal injury claims.

Nomenclature vs. Underlying Purposer
It is worth mentioning that the governing bodies have warned against the practice of the law costs draftsman to try and go around the law by changing the designation of the cost or business model. One such example cited is changing the term “referral cost” to “cooperative marketing efforts”. This will not work, because the law applies to the underlying purpose of the fee and not to the specific designation given by a law costs draftsman.

Full And Substantial Compliance Is Only a Matter Of Timer
Judge Ramsey declares that budgeting is a reality in life as well as in litigation. As such solicitors can easily adapt to the same, particularly given the fact that regulatory bodies are serious in its enforcement. And are ironing out the details to avoid confusion as to its applicability and/or scope.