Our thoughts on the Jackson review

24 February 2010
By Michael Hayes

Lord Justice Jackson’s review of litigation costs has two interrelated, but distinct strands. Firstly, he makes recommendations which are aimed at reducing the cost of the litigation process overall. Secondly, he makes recommendations which are aimed at shifting the burden of what costs remain from one place to another.

The first strand (reducing costs overall) is in the interests of both claimants and defendants, and Lord Justice Jackson’s recommendations should be welcomed by everyone involved in the dispute resolution process.  However, Lord Justice Jackson’s approach to the second strand (shifting the burden of what costs remain) is, in our view, of real concern.

At present, the cost of litigation is borne primarily by defendants whose actions have caused others (successful claimants) to suffer loss. Many of Lord Justice Jackson’s recommendations will, if implemented in their current form, have the effect of shifting the costs burden from (unsuccessful) defendants to (successful) claimants.

The difficulty with this approach is that many defendants (employers, professional advisers, property owners etc) are able to spread the cost of any claims which they may face by insuring against them. In this respect, the defendants “stand together”. Claimants, on the other hand, “stand alone”, as we do not, in this country, have a viable market for allowing potential claimants (i.e. all members of the public) to insure against the risk of suffering a loss due to someone else’s actions, and having to incur the cost of pursuing a claim.  As a result, whereas defendants are, in many cases, able to spread the cost of becoming involved in a dispute, claimants are unable to do so.

Unless commercially appropriate “before the event” insurance becomes widely available, the only way to spread the costs of the litigation process in a way that is financially manageable for those involved, is for those costs to be borne primarily by those who are able to stand together, as opposed to those who necessarily stand alone.

For these reasons, it is our view that the recommendations from the Jackson report which are aimed at shifting costs from one place to another are socially undesirable, and should be opposed.