Times are a changin' in Blighty

Lord Justice Jackson's civil litigation reforms are beginning to bite ... Active judicial management of disclosure and hearings ... Horror of horrors - case budgets and cost controls ... Judge Docket reports from Blighty   

One of Judge Docket's heros, Judge Simon Brown QC, the designated mercantile judge for the Midlands, at a local flower show with his wife and daughter (both right)

I have made good cyber friends with a number of American and Australian judges who share the same professional interest in costs and disclosure/discovery in civil litigation.

"How sad. Get a life," you may well say to us. 

Frequently I get this response ...

"What is it to do with judges? It is none of their business - it's our livelihoods as it was yours in your time until you went to work for the government with a certain job, good salary and final pension scheme. It's our turn now to make serious money - please mind your own business and judge our cases when we require you to do so. Enjoy all your spare time playing golf." 

Let me use my now redundant advocacy to try and bend these minds.

English judges, lawyers and the law have never had a good press. Shakespeare wrote about "the law's delay's, the insolence of office" in his most famous soliloquy in Hamlet. He caricatured judges as Mr Justice Shallow in Henry IV.

Charles Dickens - we are celebrating Dickens year here (nothing has really changed you will be pleased to learn). In his great legal satire Bleak House (1853), he declared that the law was not for the litigants but for the lawyers:

"The one great principle of the English law is, to make business for itself. There is no other principle distinctly, certainly, and consistently maintained through all its narrow turnings. Viewed by this light it becomes a coherent scheme, and not the monstrous maze the laity are apt to think it. Let them but once clearly perceive that its grand principle is to make business for itself at their expense, and surely they will cease to grumble." 

When I arrived bright eyed and bushy tailed in Birmingham as a relatively young appointee in 2006 to take my "seat on the Bench" as the Mercantile Judge in the Midlands, I declined to wear my Ede & Ravenscroft 18^th century wig and robes and "sat" in a business suit, like the litigants appearing before me.

After a while the lawyers reluctantly followed and old fashioned attitudes started to change.

One of the early cases before me was a Chancery case concerning a disputed will.

An elderly bachelor had died leaving his £250,000 bungalow to a charity for the Josiah Wedgwood adult learning college near Stoke-on-Trent in the Potteries.

The trustee, who was the principal of the college, did not know whether to hand this princely sum over to the local authority or to a charitable fund in the college itself.

Towards the end a lengthy rambling opening going through reams of irrelevant documents, I asked how much each side had spent on the case.

Suddenly changing a gear and as quick as a flash, counsel for the claimant triumphantly exclaimed, "£125k a side, but that is not a problem because all costs will come from the estate".  

"But, Mr Snouts, this is just like Jarndyce v Jarndyce 150 years ago," I found my self blurting out.

"Is Captain Nemo still working for your instructing solicitors in their basement back office writing out all these millions of pieces of paper you have brought with you to my court?" 

The other counsel, Mr Intrough, added: 

"Jarndyce. Indeed, quite so my Lord. My instructing solicitor tells me that his firm's founder was a Mr William Challinor, Esquire, who provided the material for Mr Dickens from one of his cases - Cook v Fynney - a dispute over a farm at Onecote in Staffordshire. The Lord Chief Justice, Lord Denman, took grave exception to Mr Dickens scurrilous serialisation of Bleak House and wrote to the Times condemning him for the 'Death of Chancery'." 

I opined:

"But, Chancery did not die, gentlemen; it was reformed and has now seemingly reverted to 'type' - quite literally! Lawyers are extremely conservative businessmen as Mr Dickens quite correctly observed." 

At the end of short, one day, cases, I am required to "summarily assess" the successful party's costs.

Invariably, this is the subject of intense debate between the advocates and those instructing them. It can take longer that the case itself.

After doing a number of them, I realized that the fantastic sums being claimed were the product of a £ multiplier of unchecked billable hours and two mysterious fee earners called Doc Handler and P. Hot o'Copier - the largest fee earners in any firm, so I am told. 

How do lawyers and accountants get away with charging by the billable hour when nobody else does?

No sane person - not even a lawyer - would call in a builder to build a conservatory and agree to pay him by the billable hour rather than obtain competitive quotations for the job.

Otherwise, how would he know if they could afford a new conservatory after the work had been done and how would the builder know if he was going to get paid for all his hours of labour?

The answer maybe that the lawyer, and his client, hope that their unchecked bills will be paid for by their litigation opponents.

The unverified billable hour and professional ethics make uneasy bedfellows.

On April 26, 1999, we threw out the old rule book for civil litigation and brought in a shiny new one - the Civil Procedure Rules (CPR).

These were designed to improve "access to justice" by making legal proceedings cheaper, quicker and easier to understand for lawyers and non-lawyers alike.

Judges were put under the onerous duty to "actively manage" the cases in furtherance of these "Overriding Objectives" - which include proportionality and saving expense.

The parties were required to help the court in that regard. It is not a role most judges would have considered as being part of their job description, but it is.

The notion of cooperation is a stranger to most litigation lawyers who are born and trained, like Spartans, to fight.

To combat this mindset, I explain the role of the lawyers as being like the seconds in a duel; they agree the process for the fight i.e. the location, time and weapons for their principals to fight to the death.

Other judges take a more robust method - the stick rather than the persuasive carrot.

In a recent case, the leading magic circle firm of Herbert Smith was hit by the judge with a £135,000 wasted costs order for its adversarial attitude to expensive electronic disclosure, where cooperation is vital and specifically required by the rules.

From that moment on just before the turn of the millennium (sorry about the use of Latin which is now banned over here like the Tridenine Mass once was before the new old Pope was elected), the interests of the litigants and the lawyers were therefore at odds and the judge's task was to promote the interests of the litigants above those of the lawyers.

So why, you may ask , did I have a Jarndyce case before me in 2006 and why are small/medium companies (SME's) reluctant to litigate their disputes in my, or any  other, business court - preferring the cooperative fudge of mediation?

Lord Justice Jackson spent a year finding out.

He travelled the world and asked everyone these questions.

He wrote a monumental Report, Review of Civil Litigation Costs, published in December 2009 - 10 years on from the birth of CPR.

In Part 6 of his magnus opus (old lawyers' Latin habits never die) he identified nine areas – divided into chapters - of "controlling the costs of litigation".

As one of the few fully docketed judges in the country, I have been closely involved with four of those chapters and in one of them, Chapter 40, I have been piloting a scheme for the review:

37. Disclosure

39. Case Management

40. Costs Management

43. Information technology 

Essentially, he found out that judges were not able to manage their cases as envisaged by the rule changes and were not able to control the process of litigation. They did not have the tools - budgets and IT software - and were swamped in paper.

You will not be surprised that it came as something of a nasty shock to many unwary practitioners coming before me, fresh from my training at the new Judicial College at a case management conference, to be asked for their budgets for the litigation. 

They had been used to cobbling together at the last minute an agreed set of directions for rubber stamping. They cried: 

"Lawyers do not do budgets. Anyway it is impossible in litigation as it has so many vagaries, but we can give you a rough estimate on the back of the proverbial fag packet, your Lordship."

During the first year the number of new issues in my court - a court of choice - declined and the civil servants and my presiding judges expressed their concerns.

I asked a local member of the bar for his view - was it me or was it something else? He replied:

"No, not at all. It is just that the solicitors who decide where to issue believe they can avoid budgeting and get better rates elsewhere. City of London guideline Grade A rate is £409 per hour; Birmingham is £217. Some are muttering about not being able to afford the second BMW on the drive in front of their house by the golf course. No brainer really, Judge."  

Naively, I was rather shocked at such ethics and the conflict of interest of the lawyers with those of their clients and of cooperating with the court on achieving the overriding objective.

On October 1, 2011, my pilot went national to all the SME business courts and the numbers rose.

The lawyers had begun to realise that paradoxically budgeting was actually good for their business. Their commercial clients wanted a more certain risk assessment before they committed themselves to the gamble of litigation - which is all about money in the business courts - not matters of principle or liberty.

While the clients could seek to control the budget of their own lawyers, being empowered with the potential offer of lucrative repeat business in the background, neither they nor their lawyers could control the costs of their adversaries even though they would become liable for them should they lose their case.

However, under the Costs Management Pilot, the judge could, and indeed should do so.

The judge does this by scrutinising the budgets to see what is reasonable for him to "approve" or simply "not approve" (cp "disapprove") as one would do on a Summary (cp Detailed) Assessment of costs.

The effect of "approval" is very beneficial for all the parties and their lawyers: it is likely to obviate the need for subsequent tedious and expensive detailed assessment and early payment of a settled amount of their costs. 

Winners all round.

I often describe myself as a case manager or overall case project manager, rather than as a trial judge.

If I am the latter then it is a fact finding judge - the law is for the Court of Appeal and beyond.

Over 85 percent of my cases settle before trial and the skill of the case managing judge is to get those cases resolved sooner rather than later at the least expense to the litigants.

The Case Management Conference (CMC) is my first opportunity to get my hands on the case.

Have I convinced you that costs control is good for you? No! Are your minds at least bending, like one of Uri Geller's spoons?

If not, then then standby for part two in this series and meet old Mr Fees, who came a bit of a cropper when he recently appeared before the dreaded Judge Docket.