Commercial Litigation feels the effect of major fee reforms


Should the winning claimant rather than the losing defendant cover the lawyers’ success fee? Lord Justice Jackson’s report suggests new reforms.

Basically, should the winning claimant rather than the losing defendant cover the lawyers’ success fee?

2013 saw this report transform the conduct of litigation with further developments still to have an effect throughout 2014. Head of Dispute Resolution, Stephen Eccles, outlines the reforms below.

Setting cost budgets

In complex cases the parties are now required to file detailed cost budgets at an early stage in the proceedings and these budgets are subject to approval by the Court. Once budgets are approved that budget caps the costs they may recover if they are successful regardless of the amount of work undertaken.

2014 will see how Courts deal with the setting of the actual budgets, but it seems clear that the aim of the budgets is to limit the successful party’s cost recovery if the budget is exceeded. This is in line with the present government’s policy of seeking to shift additional costs onto claimants.

Compliance with time limits

In the past, there has been a certain amount of flexibility with regard to time limits set by Courts. This enabled the parties to agree extensions between themselves and even be late in complying without incurring any particular sanction.

Under the reforms there is an entirely new approach to time limits. Time limits must be strictly observed and if a party fails to observe a time limit they can expect significant consequences.

The first major case to which the rules have been applied is the case of Mitchell -v- Newsgroup Newspapers Limited in 2013. In that case a cost budget document was filed late by merely a few days. The Court struck out any entitlement the claimant had to payment of its costs (subject to being successful) on the grounds that he had failed to comply. The costs were expected to be well in excess of six figures and so not surprisingly the claimant appealed but was unsuccessful.

Our View

Pinney Talfourd’s litigation team meet regularly to discuss how these reforms are developing and to consider the effect of these new principles to our clients.

There have been procedural reforms of the litigation process in the past but these reforms look set to stick. We expect there to be very little sympathy extended to a litigant that fails to comply with time limits set out in Court Orders.

2014 will likely bring considerable litigation from litigants seeking relief from the Court from quite draconian sanctions but we are not expecting those litigants to be successful. Defendants will be looking for any procedural errors on the part of claimant’s solicitors as a technical way of striking out claims.

A litigation team needs to be highly informed, motivated to work together as a team and able to plan individual case strategies. The team at Pinney Talfourd aims to provide a comprehensive litigation service to clients and we hope our commitment to excellence combined with our research and case management techniques will provide us with a significant advantage over traditional High Street firms who do not benefit from working as a team and do not have the resources we employ.

This article was written by Stephen Eccles. Stephen is a Partner and Head of the Dispute Resolution Department. This article is only intended to provide a general summary and does not constitute legal advice. Specific legal advice should be taken on each individual matter. This article is based on the Law as at February 2014.


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