Wednesday, November 12, 2014

J v J: Something must be done

Mr Justice Mostyn
In J v J Sir Nicholas Mostyn, clearly exasperated at yet another case with disproportionate costs, has proposed that two measures be taken to address the problem:

Firstly, fixed pricing for cases. Sir Nicholas  referred to two quotes from Lord Neuberger's 2012 lecture to the Association of Costs Lawyers:
"Hourly billing at best leads to inefficient practices, at worst it rewards and incentivises inefficiency. Moreover, it undermines effective competition in the provision of legal services, as it 'penalizes . . . well run legal business whose systems and processes enable it to conclude matters rapidly.' It also penalises the able, those with greater professional knowledge and skill, as they will tend to work at a more efficient rate. In other words, hourly billing fails to reward the diligent, the efficient and the able: its focus on the cost of time, a truly moveable feast, simply does not reflect the value of work."
"That no-one has suggested a viable alternative is something which needs to be remedied, and the sooner the better. An approach to litigation costs based on value-pricing rather than hourly-billing is one which urgently needs to be worked out and applied. Rather than treating time as the commodity which is being sold, we should be adopting an approach where skill and experience are the commodities which are sold."
Sir Nicholas envisages fixed pricing for all types of cases, but so far as ancillary relief (he still uses the term) is concerned he suggests a fixed price for each of the three phases of an ancillary relief case namely (1) Form A to First Appointment, (2) First Appointment to FDR and (3) FDR to trial.

The second measure is "for the court in ancillary relief proceedings to be able to impose at the very beginning of the case a costs cap on what may be charged by the lawyers to their client for each of the three phases of the case." "Naturally", he says, "this cap would be variable if circumstances change but the change of circumstances would have to be a big one for a variation to be allowed."

Mostyn continues:
"In my opinion only if these two steps are taken will the grotesque leaching of costs, such as has occurred in this case, be arrested. It might also have the beneficial consequence that the present volume of self-representation deriving from the wholesale withdrawal of legal aid from private family law cases is reduced. If a litigant on the cusp of self-representation knew at the start of the case how much it was going to cost for each phase then he may well opt for representation. The benefits of representation are too obvious to spell out extensively. Far more cases with the benefit of representation settle, with the resultant avoidance of the legacy of heartache that contested litigation engenders. Those cases that do fight will be on rational and properly pleaded justiciable issues. The lengthy delays in the court system caused by the explosion in self-representation may be reduced."
Difficult to argue with that.

For those lawyers worried about these proposals, he returns to Lord Neuberger:
"The drive for lower legal costs should represent an opportunity for forward thinking lawyers. If litigation is cheaper, elementary economics suggests that there will be more of it. Rather than charging high in a few cases, and driving away those with valid claims from the courts, lawyers should be able to charge realistic fees, and encourage many more clients to instruct them to fight their case. So, significantly lower legal costs should not lead to less money for lawyers, but it should lead to better value for money, and should give to our citizens what so many are currently denied, namely access to justice."
In an effort to prevent his words from simply adding to the dusty pile of "something must be done" rhetoric, Sir Nicholas stated that he would be bringing his judgment to the attention of the President, with a view to him raising 'this pressing matter' as a matter of urgency with the Family Procedure Rules Committee.

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