You will comply : The Jackson Reforms - Six months on

You will comply : The Jackson Reforms - Six months on


Author: Craig Bennett

Many expected a revolutionary new take on the conduct of litigation, with costs budgeting taking centre stage. Six months on, and it is time to analyse the impact so far; have the Jackson Reforms been revolutionary, and what has been their effect?

Much has been made of the Jackson Reforms to the Civil Procedure Rules and the new approach to litigation to be expected from the courts.

No longer justice at any price?

One of the most important amendments to the Civil Procedure Rules can be found within the Overriding Objective at CPR 1.1(1) with the addition of the requirement that not only are cases to be dealt with justly, but also at a proportionate cost.

It is this amendment which will, arguably, have the greatest impact on how litigation must now be conducted. It is no longer the case that a party can simply throw money at litigation in its desire to be crowned the victor; parties must comply with the principle of proportionality.

A key aspect of this emphasis on proportionality is cost budgeting, one of the Jackson Reforms' flagship initiatives.

Unless the court orders otherwise, cost budgeting applies to multi-track cases issued after 1 April 2013. The exceptions to this rule are cases issued in the Commercial Court or Admiralty Division, or cases in the Chancery Division or Technology and Construction Court where, at the date of the first case management conference (CMC), the sums in dispute exceed £2m (excluding interest and costs).

The costs budgeting regime has forced parties and their solicitors to think realistically from the outset about how much a piece of litigation will cost, whether the cost is proportionate to the value of the claim, and what issues may arise which might cause a costs budget to increase.

Where costs budgeting applies, parties are expected to file a budget at the outset and, once approved by the court, to stick to it.

The message from the courts, in the case law on the subject to date, is that the parties must be accurate in preparing their budgets and be vigilant with their budgets generally - if it appears that you will exceed the approved budget, an immediate application to vary the budget must be made. Otherwise, the risk is an inability to recover costs, no matter what the outcome or how reasonable the costs were.

In Mitchell v News Group Newspapers Limited (2013) EWHC 2355, the claimant's solicitors failed to submit a costs budget within the required time period. As a result, the High Court ordered that the claimant be restricted to his court fees only, thereby depriving him of his ability to recover any of his other legal fees.

It is anticipated that this strict approach will be upheld when the claimant's appeal against this draconian order is heard by the Court of Appeal in November. So watch this space!

Relief from sanctions

Parties to litigation can apply to the courts for relief from sanctions for non-compliance with a procedural rule or a Court order under CPR 3.9.

The changes to CPR 3.9 mean that when a court is considering an application for relief from sanctions, it must consider all the circumstances of the case to enable it to deal with the case justly, in particular:

  • the need to conduct litigation efficiently and at proportionate cost; and 
  • the need for enforcement and compliance with court orders

 Although the amended CPR 3.9 would suggest that the court conducts a delicate balancing act in deciding to grant relief from sanctions, in practice it appears the courts are readily favouring the enforcement of court orders and ensuring that parties meet all court-imposed deadlines.

A much stricter regime now exists.

The unreported case of Jaswant Singh Bharj v Sukhwinder Singh is an example of the courts' new approach to applications for relief from sanctions.

The Central London County Court refused to grant relief from sanctions where the claimant's solicitor had incorrectly noted the date for compliance as being 14 May 2013 rather than the correct date of 2 May 2013. They based their argument on the entirely human error of recording the incorrect date and stated that the trial date could still be met and justice done.

HHJ Dight had little sympathy. He stated that as both parties had attended the hearing where the order had been made and it was crucial that dates given in unless orders were adhered to, the application should be refused.

In response to the claimant's argument that the breach could essentially be remedied by an order for costs, HHJ Dight disagreed, saying: "I no longer accept as a principle itself that as long as [the error] is compensated by costs that an application for relief should be granted."

The claimant's application for permission to appeal was refused.

How will you be affected?

In simple terms, where parties ensure that they comply fully with the procedural rules in place, adhere to orders of the court, and pay detailed attention to costs budgeting, there should be little to be concerned about.

Compliance is the key to survival in the Jackson Reforms storm.

If you are a party to litigation, practical tips to ensure compliance include:

  • Clients and solicitors working closer than ever as a team to ensure all deadlines/key dates are met.
  • Parties being realistic in their assessment of how much litigation will cost and keeping in mind the principle of proportionality - the courts will not allow a large spend on litigation if it considers such costs are disproportionate to the litigation itself.
  • If there is any doubt about the ability to meet a particular date set by the court, an application to the court to vary the timetable should be made at an early stage - solicitors and clients will need to let one another know well in advance of anything that may affect the ability to meet deadlines. The earlier the application to the court, the better.

If you have any questions about the Jackson Reforms and how you might be affected, please do not hesitate to get in touch.