By | 14th June 2012

When I started out writing this blog almost three years ago I confess I did not think I would still be doing it in 2012, still less that I would come to write about soteriology.

I admit I had to look it up, having never heard of it before. Apparently the word comes from the Greek word “soteria” meaning salvation, something which I fear I must have missed in my classical education. According to one definition, soteriology is the study of religious doctrines of salvation. A number of religions are concerned with salvation and Nirvana is the soteriological goal of Indian religions such as Buddhism, Jainism and Hinduism. I stand to be corrected by those more knowledgeable than I but Nirvana is, I believe, a state of transcendence permitting the mind to experience a sense of great peace and a unique form of awareness or intelligence.

I suspect that, however important they may seem, recent speeches by Lord Neuberger and Mr Justice Ramsey will not claim to induce either a sense of great peace or a unique form of awareness or intelligence. Nonetheless, they are definitely part of the ongoing process designed to achieve some kind of Nirvana for clients and litigation lawyers alike.

Let me explain what I mean.Before I do so, you need to understand that there is a new kid on the block. In no way do I intend by this reference to be disrespectful to any members of the judiciary, but only to refer you to LASPO. For an Act of the UK Parliament intended to introduce far reaching reforms to both case and costs management in the litigation arena, it would be difficult to come up with a less appropriate name than the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (otherwise known as LASPO) which received Royal Assent several weeks ago.

Despite its inauspicious name, LASPO contains provisions for the implementation of the reforms proposed by Lord Justice Jackson which are expected to come into force in April 2013. In his recent lecture, Proportionate Costs: Fifteenth lecture in the implementation programme, the Master of the Rolls commends the efforts of Lord Justice Jackson who has taken “only” four and a half years from a standing start to achieve his vision of the reform of litigation costs, and to wish him well in his recovery from a serious operation.

The lecture is short and well worth reading. It includes the view that “disproportionate costs, whether necessarily or reasonably incurred, should not be recoverable from the paying party. To put the point quite simply: necessity does not render costs proportionate.”

As a result there is to be a new CPR 44.4(5) which provides that:

Costs incurred are proportionate if they bear a reasonable relationship to:

(a) the sums in issue in the proceedings;

(b) the value of any non-monetary relief in issue in the proceedings;

(c) the complexity of the litigation;

(d) any additional work generated by the conduct of the paying party; and

(e) any wider factors involved in the proceedings, such as reputation or public importance.

As Lord Neuberger says:

“it is a fallacy to think that time and money are no object where the operation of the civil justice system is concerned. Parties and their lawyers must keep firmly in mind that they ought to expend no more than a proportionate amount of money in the pursuit of justice. If they wish to spend more, they must appreciate that such sums will not be recoverable from their opponent. That is proportionality, proportionate costs, as between the parties.”

There will be teething problems but the Master of the Rolls stresses the determination of the judiciary to get to grips with this problem by agreeing with Sir Rupert Jackson, in the interests of consistency of decision making, that two specific members of the Court of Appeal will be asked to sit on all appeals arising out of the Jackson reforms.

A few days later, Mr Justice Ramsey delivered the sixteenth lecture in the series, Costs Management: A necessary part of the management of litigation. In the course of his lecture Mr Justice Ramsey highlighted the form which the new reforms will take specifically in relation to costs management. There is to be a new rule CPR 3.11 to 3.18 and a practice direction PD3E as well as a new form of precedent H for producing costs budgets.

The new regime will apply to all multi track cases commenced on or after 1st April 2013 in a county court, the Chancery or Queen’s Bench Division(except the Admiralty and Commercial Courts) unless the court orders otherwise and to any other proceedings where the court so orders.”

I urge you to read the whole text and to take particular note of paragraphs 16 and 17:

“There are two particular aspects which will be important when costs management is introduced from April 2013.

  1. First, the court will have to apply new proportionality test to the costs budget. As stated in the Final Report, the judge carrying out costs management will not only scrutinise the reasonableness of each party’s budget, but also stand back and consider whether the total sums on each side are “proportionate” in accordance with the new definition. If the total figures are not proportionate, then the judge will only approve budget figures for each party which are proportionate. Thereafter if the parties choose to press on and incur costs in excess of the budget, they will be litigating in part at their own expense. It will be important for judges to apply the test consistently and for parties and their lawyers to be aware of the impact on recoverable costs.
  2. Secondly, the court, in deciding what directions to give, will have to consider the cost impact of those steps. A good example is disclosure where, particularly with electronic disclosure, costs can soon become disproportionate. The court will have to question whether, for instance, it is proportionate to have standard disclosure or whether the costs of more limited disclosure is a proportionate way of proceeding in a particular case. Other examples of cases where the court will have to consider the impact of costs include expert evidence and witness statements”

Note also the provision relating to reviews of costs budgets at paragraph 22:

“Regular reviews of costs budgets. The onus is on the parties to put forward revised costs budgets if significant developments in the litigation warrant such revisions. Those are then provided to the other party or parties for agreement and, if agreed, the agreement of the revised costs budget will be notified to the court. The court will only become involved in that process if there is disagreement, in which case the party seeking to revise the costs budget will send the court that revised budget, the reasons for the revisions and the objections raised by the other party or parties. The court may then hold a costs management conference which, it is thought, will generally be dealt with by telephone or in writing, leading to approval, with or without variations, or disapproval of the revised budget.”

Aldous Huxley, in his book “Brave New World”, dealt with future anticipated developments which combined to change society.

The Jackson Reforms, LASPO and the new determination by the judiciary to get to grips with the problem of the often disproportionate costs of litigation, may not be the Nirvana sought by many but they surely combine to create a view of a brave new world for litigators, their clients and the courts alike.

Photo credit: Detail from Kalpasutra folio on Mahavira Nirvana [Wikimedia commons]