Practitioners have reacted with shock to the senior judiciary’s last-minute decision to drop a key part of the Jackson reforms for high-value commercial cases.
In an 11th hour announcement last week, the senior president of the Queen’s Bench Division and the chancellor of the High Court said the costs-management rules will not apply to cases where the sums in dispute exceed £2m in the Chancery Division, the Technology and Construction Court, and the London Mercantile Court.
Previously, only the Admiralty and Commercial Courts were exempt from the costs-management rule.
The timing of the decision was branded “extraordinary” by one senior commercial dispute resolution lawyer. A leading legal academic attributed the about-turn to “turf wars”.
The Jackson reforms are due to take effect on 1 April.
A statement by Sir John Thomas and Sir Terence Etherton announcing the change said “parity of approach” was important to avoid “inappropriate forum shopping as parties get used to the new rules”.
However, NLJ columnist Professor Dominic Regan of City University, who assisted Lord Justice Jackson with the costs-management pilot scheme, says: “The announcement is a result of judicial turf wars.
“Those caught by budgeting resented those excluded. In particular, they feared litigants would shun them by issuing in a budget-free zone.
“The exclusion is bizarre. A case worth more than £2m arguably screams loudest for the judicial scrutiny and discipline which goes to the heart of budgeting. Those most profligate will evade the rule.”
Rani Mina, partner at Mayer Brown, says: “Very late in the day, there has been a judicial U-turn.
“It is extraordinary that the judiciary has waited until this late stage to announce a major shift in policy on costs management. Many law firms will have spent much time and effort getting ready for implementation of the new rules on 1 April 2013. While that effort will not be wasted, the work that has been done is tailored to the new rules and may well have been approached somewhat differently.”
“Many will now be wondering whether the judiciary remains committed to full implementation of the other significant reforms.”
David Greene, NLJ consultant editor and partner at Edwin Coe, says: “Practitioners are bound to vote with their feet, with a rush to the doors of these courts.”
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