denotes premium content | Mar 13 2010 Current issue
Volume 12 Issue 8
Trial or error?
AS MOST in the ‘real’ economy recover from Christmas while continuing to worry about precisely what they can or cannot afford in our cash-strapped global economy, many might feel it is only right − and possibly about time − that counter-cyclical litigation lawyers are also called to account for their costs.
Fortunately most of them seem to think so too, even if views on the overall verdict are a bit of a mixed bag. The Right Honourable Lord Justice Jackson’s wide-ranging ‘Review of Civil Litigation Costs’ − in which he attacks “disproportionate” costs that require some substantial changes − has been broadly welcomed and praised by the entire profession. While there will be losers as well as winners from any changes to the longstanding ‘loser pays’ principle, the general feeling seems to be that Lord Jackson’s efforts to provoke further debate and provide some solid possibilities are both laudable and long needed.
As widely reported, chief among these suggested changes would prevent a lawyer’s ‘success fee’ and after the event (ATE) insurance being recoverable from an unsuccessful defendant in conditional fee agreements (CFAs) between lawyers and their clients. Instead the cost in such agreements − including the ‘no win, no fee’ variety of daytime TV fame − would be borne by the client themselves.
Identifying this as the “major contributor” to escalating costs in personal injury cases, Lord Jackson said his measure would lead to “significant cost savings” while still safeguarding access to justice.
However, he also acknowledged that a rise in fees should not result in substantially less compensation for claimants that are truly in need. Recommendations to avoid this eventuality include capping any success fee at 25 per cent of total damages and increasing those general damages awarded by some 10 per cent.
Another potential benefit for those with a meritorious claim in certain fields of litigation could be “qualified one way costs shifting”, where a claimant would not have to pay the other side’s costs if he or she lost their case, but the defendant would have to pay costs if the claimant wins. Meanwhile, the abolition of the controversial ‘referral fees’ that personal injury lawyers can pay for details of potential work would also serve to reduce the overall cost burden.
“The challenge of litigation funding is huge, and it seems that Lord Justice Jackson has met it head on,” says Harbottle & Lewis head of litigation Andy Millmore.
“If even some of the recommendations are adopted, the result could be a sea change in how litigation is run.”
But lawyers being lawyers, needless to say many also point to difficulties the proposals pose for the market.
“Insurers and other businesses will be very concerned about defending a claim when there’s a risk that they won’t be able to recover costs when they win,” argues Reynolds Porter Chamberlain partner Alexandra Anderson.
The weighty Jackson report is now in the hands of justice secretary Jack Straw; a man, of course, who also has a rather important election to think about, but as Eversheds partner Brendan Padfield points out, the fragile economic climate means the report is unlikely to be ignored by any of the political parties.
“The government is a significant compensator and implementation of these recommendations will reduce public spending and no Government, whatever its political line, will ignore it,” he says.
I would just like to take a final, all too brief, window to wish all our readers a very happy 2010. Please don’t hesitate to contact me with your own opinions, or feedback on any of the articles and discussions featured in this first bumper edition of a busy year.
Richard Brent
Editor
Features
Survey: The legal profession 2020
Fast Futures is working with Governments, banks and global law firms (to mention only a few clients) to identify global future trends.
Social working: portrait of a new intranet
The magic-circle law firm Freshfields Bruckhaus Deringer recently opted to transform its intranet in an attempt to increase collaboration across diverse teams using an Enterprise 2.0 social business tool.
Opinion: Virtually reality
By looking at the fundamental costs of a law firm through a different lens, and by being prepared to challenge all of the taken-for-granted assumptions about what a firm needs to be credible in the client’s eyes, a new, still nascent model had been created.
Opinion: Hard lessons learnt
With a new year comes the hope of a brighter outlook for many professional practices, and for some, closure on possibly the hardest financial years that some practices have ever faced.
Opening up
Six-office law firm Stanley Tee LLP has implemented open source and virtualisation technology, deploying Novell solutions to form an architecture that supports both Linux and Microsoft systems.
Granting space
Reed Smith wanted its new, award-winning intranet to drive greater firm-wide usage through screen appearances that were carefully tailored to an individual’s priorities.
Going paperless
Fenwick & West LLP’s ‘paperless’ office project stands the law firm in good stead for advising clients on the most appropriate document management, retention/destruction and security policies for their own data stores.
Room for a better view
Fee-earner mobile working options at Freeth Cartwright include the digital dictation of documents from their bank of Blackberry smartphones. Already improving billing efficiency and accuracy, the next step is now to offer access to greater case-related information through a single work environment.
Linking and learning
Legal OnRamp, the expanding knowledge-sharing platform for in-house lawyers and their firms, recently launched its first FirmRamp − a practice-specific option for a firm’s own clients.
The real deal flow
On joining online forum Legal OnRamp, Swedish law firm Vinge recently provided all members of the group with an insight into its ‘Deal Tracker’ project to maximise relevant information-sharing activities. Allowing for more sophisticated trend analysis than before, the firm also finds the initiative has benefited business development.
The backup business
Increasingly, law firms need to demonstrate to their clients they are capable of continuing to deliver the high levels of service they have come to expect in the event of a disaster.
Overheads out
Woolley & Co is one law firm that has committed itself to fully outsourcing business-support functions, including marketing efforts and legal software.
Q&A: Spring Law
Formerly a lawyer at both Simmons & Simmons and Denton Wilde Sapte, in 2002 Tim Perry founded Spring Law as an alternative to the traditional law firm partnership structure. He tells Richard Brent why he now expects to welcome a new wave of disenchanted or displaced talent.
