Skip to main content

Quick on Costs: The Future of the Laws of Costs (the Woolf and Jackson Reforms)

Content updates

When they were introduced, the Woolf Reforms sought to change radically the approach to    costs in litigious work with the introduction in the UK in 1999 of the codified Civil Procedure Rules (“CPR”). The Woolf Reforms also attracted immense interest in Australian jurisdictions leading to the adoption in nearly all of those jurisdictions of the fundamental concepts of the reforms such as case management, transferring responsibility for the proper management of litigation from the individual parties to the court in which their litigation was proceeding, civil procedure rules or CPR, overriding objective and proportionality. It is important to make the initial point, as others have, that the philosophy which underpins the Woolf reforms is the philosophy that underpins the reforms initiated on 1 April 2013 as a result of the work of Lord Justice Jackson and popularly referred to as the Jackson Reforms.

Lord Justice Jackson’s task was to review how the UK’s CPR had operated since their introduction in 1999 in order to make recommendations that would better enable litigation to be conducted consistently with the aims of the Woolf Reforms.  The review necessarily required a consideration not just of the CPR but also of Conditional Fee Agreements (CFA’s), how they had operated in practice, and the effect they had had after -2000 on the civil justice system. 

The task was thus one to make recommendations that would ensure that the justice system was better able to implement the aims of the Woolf reforms.  That task required him to identify why and how those aims had not properly taken effect and how that could be remedied.
The CPR provide a framework intended to ensure that all litigants have fair access to the courts and a fair opportunity to proceed to judgment. 

That framework must be flexible enough to be adapted to the circumstances of the immediate case. It must also be flexible enough to ensure that parties do not expend more than proportionate costs in conducting their own litigation and to ensure that parties do not expend more of the court’s time and resources than is proportionate given the need to ensure that all other court-users can have fair access to the courts. “A man can have his day in court but not another man’s day in court”.

Implementation of the Jackson Reforms

After their formulation in Preliminary and Final Reports implementation of the Jackson Reforms was undertaken by a Judicial Steering Committee consisting of Lord Neuberger MR (chairman), Maurice Kay LJ, Moore Bick LJ and Jackson LJ. The lead role, under the supervision of the other Committee members, fell to   Lord Justice Jackson. Illness forced his retirement in April 2012 when his place was taken by Sir Vivian Arthur Ramsey, a Judge of the Queen’s Bench Division, who himself retired with effect from November 2014.  Lord Justice Jackson was not able to make a return to finish his work, an unofficial return, until May 2015 with the Third Harbour Lecture. The eponymous Jackson Reforms meanwhile had commenced on 1 April 2013. He retired from the Court of Appeal in March 2018 and this writing outlines his work with the Jackson Reforms before retirement.

At the invitation of the leading global litigation funders IMF Bentham, Lord Justice Jackson will speak at a conference in Melbourne on 25 September 2018.

The Jackson Reforms and Reform Initiatives since

This writing explains three particular aspects of the Jackson Reforms; costs budgeting and costs management, the benefits of and objections to these and solutions advanced to deal with particular problems since 1 April 2013. 

In considering this writing, the Australian reader needs to be conscious of two other things. First, it is not possible to consider the reform of litigious costs in isolation from other UK reforms of civil litigation. The first and arguably one of the most important of these broader reform initiatives is the implementation of the Civil Courts Structure Review (CCSR), released on 27 July 2016. This review, headed by Lord Justice Briggs (now Lord Briggs, a Justice of the Supreme Court since October 2017), into the weaknesses in the services provided by the UK civil courts. Its 62 recommendations identified five main weaknesses in the services provided by the civil courts. The first of these was the lack of adequate access to justice in cases of lower value. To remedy this weakness, CCSR proposed a new Online Court or Online Solutions Court and an extension in Fixed Recoverable Costs (FRC).

Secondly, understanding these broader reform initiatives may require an Australian reader to make use of the dictionary of concepts and organisations, the Dictionary of the Woolf and Jackson Reforms, which can be accessed in in the Chapter “The Futures of the Law of Costs” beginning at [170.1650].

Costs Budgeting, Costs Management and Legal Project Management 

The essence of costs budgeting and costs management is that the costs of proceedings are budgeted in advance and the proceedings are then conducted and managed by the court so as to keep the costs within the initial budget or approved judicial revisions of that budget. In this way, costs are reviewed prospectively not retrospectively. Judicial Costs Budgeting and Management are explained in the Chapter “The Futures of the Law of Costs” beginning at [170.1450]. 

Costs budgeting and costs management have to be distinguished from the older and broader concept of Legal Project Management. What distinguishes costs budgeting and costs management from Legal Project Management is that costs budgeting and costs management are operated by the courts within the framework of legal proceedings and the rules governing them. Legal Project Management in contrast is the application of particular project management principles, including budgeting, to legal work being undertaken for them, whether litigious or non-litigious. Legal Project Management is explained in the Chapter “The Futures of the Law of Costs” beginning at [170.1180]. 

Where next for the UK and for Australia?

The Jackson reforms will not succeed in their purposes and the system of allowing recovery of costs will deny access to justice if it is allowed to mean merely two things. These are first that a client who is a party to litigation risks having to pay an opponent’s costs. Secondly, that the client’s prospect of recovering costs from an opponent remains a powerful incentive to lawyers to drive up the client’s costs. 

It is appropriate to use the future tense in this writing because at the beginning of 2018 the reform of civil costs in the UK is still in progress. There is, however, some evidence that they may work their purposes. 

In part, the evidence for this is that the proposed solutions advanced to deal with particular problems since 1 April 2013, include the Fixed Recoverable Costs or FRC Review. This Review, still under consideration as at March 2018, canvasses the supplementing of costs budgeting and management with a general scheme of Fixed Recoverable Costs. This is because the only way to control the recoverable costs of a party to litigation effectively may be to do so in advance of them being incurred and there may be only two ways of doing that:  a general scheme of Fixed Recoverable Costs such as that proposed; and costs budgeting and management.

The FRC Review asks: “Where next for England and Wales?’ 

The question raised by the Jackson Reforms and other UK reform initiatives once they are understood is: “Where next for Australia? “

By arielgalapo

Speak to a consultant

Can't find an answer to your question?
Contact our support team.

Request training

Contact our team to arrange training.

Tell us what you think

We'd love to hear what you think
of our products and support.