This article was first published in the July 2009 edition of the World Intellectual Property Report.
In November 2008 Lord Justice Jackson was appointed to conduct a comprehensive review of the civil litigation costs system in the UK. This is the biggest review of civil procedure since Lord Woolf’s Access to Justice report in 1996 and aims to find ways to control the costs of litigation and promote access to justice at proportionate costs.
On 8 May 2009 Jackson LJ published his Preliminary Report, which marks the end of Phase 1 of the review. This will provide the basis for discussion during the consultation phase, which runs until 31 July 2009 and will consider whether the current costs rules meet their intended functions and whether reforms are required. A final report is due at the end of 2009.
A party can spend a large sum of money bringing a claim, which can often be off-putting to smaller claimants. As the winner can generally reclaim its costs from the losing party, confident parties do not have an incentive to keep their costs low. A defendant, forced into defending a claim which it ultimately loses, will have to pay its own, as well as the other party’s costs. This discourages smaller businesses from defending a claim against them, as the costs risk is too great.
The report does not suggest that costs should be dealt with in a ‘one size fits all’ manner for all forms of litigation. The majority of Jackson LJ’s findings deal with low-value, high-volume cases, in which costs can be disproportionate and off-putting to potential litigants. One cost-regulating mechanism considered by Jackson LJ is a fixed cost regime for fast track cases. Cost capping would however appear to be rejected.
The report also considers the costs of complex, multi-jurisdictional cases and acknowledges that there is already a vast array of case management machinery available in the higher courts. The report therefore does not suggest that it is necessary to introduce fixed costs for these high-value cases.
However, cost shifting, in which the winner is not automatically awarded its costs, was suggested by Jackson LJ. This would allow a judge to order the overall winner to pay its own costs for the discrete points on which it has lost, which would encourage the parties to keep their costs reasonable and to consider alternative dispute resolution methods. These types of awards are particularly likely in Intellectual Property claims where judges are already favouring this method of cost allocation.
Other recommendations which would affect IP litigation in England and Wales include ensuring that witness statements only address the issues in dispute and encouraging parties to agree bundles of documents referred to in witness statements to keep duplication to a minimum. Expert reports should also go only to the issue in dispute and it was suggested that it might be more cost-effective to hear expert evidence concurrently. Increasing the use of technology, such as by implementing e-disclosure was also raised.