Commercial Litigators Urged to Embrace Costs Budgeting

A leading litigation funding consultant has questioned the widespread reticence towards the new costs budgeting reforms which were introduced in April this year.

Many commercial litigators have voiced their opposition to the new regime, which relates to all High Court and County Court multi-track cases. Lord Justice Jackson’s reforms dictate that any case starting on or after April 1^st 2013 is subject to costs budgeting unless the court decides that this is inappropriate.

There are exceptions to the ruling, which does not apply to the Commercial or Admiralty Court or to cases in the Chancery Division, TCC or Mercantile Court where the value of the claim is £2m or above (excluding interest and costs).

Many lawyers have chosen not to opt in to the scheme in these instances, possibly due to lack of experience with the embryonic system which has not yet had chance to show its merits or otherwise.

However Nick Rowles-Davies, a solicitor and consultant with litigation funding provider Vannin Capital, has encouraged his peers to welcome the new reforms, insisting that “costs budgeting isn’t a ‘nice to have’, it’s a necessity”.

While suggesting that the caginess from some solicitors may be due to the lack of proper definition of the law on proportionate costs, Rowles-Davies insisted that the changes were a positive step for the litigation procedure.

“Costs budgeting enables a more accurate and, in the long-term, a more cost-effective budget to be produced”, said Rowles-Davies, who has previously been involved in a number of reported cases in the High Court, Court of Appeal and House of Lords.

“Like most things, the more you do it the better the outcome and even more importantly, it will offer important insights for future planning which all firms should be harnessing.”

The former private practitioner, who is a frequent public speaker on the subject of third-party litigation funding, went on to cite a desirable reduction of risk in the case load of solicitors as a further benefit of these profound changes. Rowles-Davies also insisted that the reforms would “make the process of going to court quicker and easier” and create “a system of consistency”.

The Jackson Reforms were openly criticised in some quarters, with detractors arguing that the new system threatens access to justice for many people. However, Rowles-Davies concluded that the costs budgeting reforms are simply “re-emphasising the professional duties under the SRA Code that solicitors have to their clients and should be engaging in anyway.”

“Change is challenging, but put simply, costs budgeting is here to stay. As a litigator, I can only see benefits and think my fellow professionals should embrace the new regime.”