Submission to Civil Justice Council

The impact of the "Jackson reforms" on costs and case management

Richard Harrison, Laytons Solicitors LLP
6 March 2014


This paper examines the consequences of case management and budgeting reforms. It does not consider the funding reforms.

Summary of views

If the Jackson reforms were intended:

they have succeeded.

If they were intended:

they have signally failed.

The recent flurry of decisions on the issue of relief from sanctions (with its consequent uncertainties on the possible implications of Mitchell) has done considerable harm to the reputation of our civil justice system. It has diminished our ability to market the merits of English dispute resolution to potential clients.

There has been a disproportionate response to a perceived problem. This is engendering disproportionate cost. The concept of "proportionality" itself is undermined and brought into disrepute.

Suggestions for change

I would propose the following:

Rule 3.9 and the overriding objective should be reframed so as to ensure that the doing of proportionate justice in an individual case can take a reasonable degree of priority over the enforcement of compliance with orders, rules and practice directions. This is not to denigrate the importance of robust case management and the need to consider the interests of all litigants. However, some of the present interpretation is causing immense damage.

In particular, urgent action is needed to remove the scope for arguing that any procedural error has somehow attracted a "sanction" in respect of which the only option is to make an urgent application for relief. The nature of a "breach" and the applicable sanction must be made clear before really drastic consequences are created.

Judicial interpretation should tend against the termination of litigation and the encouragement of applications by way of micro-management of cases. It should encourage sensible agreements and accommodations between parties.

Rule 3.14 should provide for a range of sanctions rather than the single "Draconian" one which now prevails.

The requirements for the "disclosure report" should be clarified to emphasise that it is a broad-brush scoping exercise and parties should not be expected to have front-loaded standard disclosure.

There should be review of the budgeting rules and the structure of "precedent H" to avoid the rigid artificialities of prescribed "phases" and in particular to avoid unhelpful "front-loading".

The civil justice system should recognise that many parties wish to use it to help them in a "trip to settlement" not a "trip to trial". Undue concentration on procedural discipline and front loading of costs may inhibit this.

The revision of the CPR to achieve "culture change"

Significant problems have been caused by:

How did this come about? Did we vote for this?

When Lord Justice Jackson wrote chapter 39 of the Final Report, he based it on extensive consultation with various stakeholders.

In particular, he referred to a difference of opinion between Professors Zuckerman and Zander on whether an option suggested in the Preliminary Report at 43.4.21 should be implemented. This stated

"Another possibility would be a declared change of judicial policy that as from a stated date, say 1st January 2010, non-compliance with deadlines or due dates would no longer be tolerated, save in exceptional circumstances. There would then be a series of "hard cases" in January 2010 where parties found themselves struck out or unable to rely upon late evidence etc., and thus thrown back upon their remedies against their own lawyers. This may rapidly lead to a tightening up of practice on the part of all litigators, for the benefit of civil litigation generally. This is not a reform which I am positively advocating, because of the hardship which it would cause to individual litigants and lawyers. However, I raise this as one possible way of dealing with the concerns expressed in the Phase 1 submissions."

On the consultation:

There was a clear weight of recorded opinion against a system based on the rigid enforcement of sanctions.

Indeed, Lord Justice Jackson's conclusion appears at 39.6.5:

"The balance therefore needs to be redressed. However, I do not advocate the extreme court which was canvassed as one possibility in PR paragraph 43.4.21 or any approach of that nature".

As matters have turned out, despite the views of the apparent majority of respondents, the measured conclusion at 39.6.5 has been lost and we have an effective enactment of the apparently rejected 43.4.21.

The change appears to have occurred between the Final Report and the 5th Implementation Lecture to the Judicial Institute on 22 November 2011. That lecture itself recognised that "good case management saves both time and costs ... however ... bad case management may drive up costs and do more harm than good". The lecture focussed on the considerable reforms to case management achieved in Singapore. I do not believe that it recognised to a sufficient extent the fact that Singapore is a smaller jurisdiction which was given significant case management resources, including IT resources. The wording of the rules for firmer enforcement, in particular the new 3.9, appears to have emerged in this lecture.

What are the main problems?

(1) Failure to understand day to day pressures of practice

In my view, a Court of Appeal judge (especially one as eminent as Lord Justice Jackson) was the wrong person to conduct such an exercise. The Court of Appeal is probably more used than most tribunals, to properly presented cases, and seeing the end result of trials. This leads to a misplaced confidence in what a badly resourced court administration can achieve on a day-to-day basis at the more mundane end of the civil justice system.

Administrators of lesser ability and resource are simply unable to cope with the commitment involved in the detailed examination of budgets and the processing of constant applications to vary timetables.

The lack of understanding is exemplified in the Mitchell case at paragraph 41 of the judgment of the Master of the Rolls where he said:

"We understand that solicitors may be under pressure and have too much work. It may be that this is what occurred in the present case. But that will rarely be a good reason. Solicitors cannot take on too much work and expect to be able to persuade a court that this is a good reason for their failure to meet deadlines. They should either delegate the work to others in their firm or, if they are unable to do this, they should not take on the work at all. This may seem harsh especially at a time when some solicitors are facing serious financial pressures. But the need to comply with rules, practice directions and court orders is essential if litigation is to be conducted in an efficient manner. If departures are tolerated, then the relaxed approach to civil litigation which the Jackson reforms were intended to change will continue. We should add that applications for an extension of time made before time has expired will be looked upon more favourably than applications for relief from sanction made after the event".

Many commentators, even Professor Regan, who has been closely involved with the process, have remarked on how this approach shows a remarkable ignorance of how solicitors' firms need to operate in the real world. Time and deadline pressure is unpredictable at the time a case is "taken on". Many commercial cases are not actually "taken on": they develop from a pre-existing situation. Crises arise not because of bad planning or events foreseeable at the outset of the case but because of difficulties caused by third parties; often, it needs to be said, because of administrative incompetence by the courts.

Further, even a week before a deadline, you cannot be certain that it will be missed and despite your best efforts you will only know this as the expiry looms. What then is the point of diverting your client's resources to making a pre-emptive application before expiry which will only take up more of the court's scarce resources?

(2) Failure to understand how cases settle

Judges see tried cases. They do not necessarily understand that a vast proportion of cases take the burden off the court system by being settled.

Putting too many cases, which would otherwise settle, into a rigorously enforced case management process is simply going to clog up the system with unnecessary applications and satellite litigation

The new emphasis on compliance with rules, practice directions and orders does seem to mean that court resources are wasted on pointless relief applications: such resources could be better employed in progressing the case.

This is being slowly recognised, inter alia in the decision of Mr Justice Leggatt in the Summit Navigation case (21 February) but the system is now blighted with considerable uncertainly.

Litigation is capable of being both a "trip to trial" and a "trip to settlement". Clearly, settlement is the most desirable destination for all cases. However, the new culture, in making litigation more hazardous has concentrated on the "trip to trial" aspects and has discouraged the party autonomy that enables cases to be managed to a settlement with minimal court intervention. The notion of "reciprocal procedural indulgences" has in fact much to commend it.

(3) Lack of court resource to manage cases properly

It may be that overseas jurisdictions such as Singapore are better suited to activist case management than the somewhat ill-resourced and variable system we have here.

Anecdotal evidence suggests a rather ramshackle system not geared up to hearing and disposing of applications promptly, not capable of answering the telephone and in some cases not even capable of taking delivery of documents. Many compliance problems are caused by administrative shortcomings.

The need to conduct what are apparently being seen as advanced detailed assessments through the costs management process and to deal with a plethora of pre-emptive relief from sanctions applications has clogged up the system.

To run an efficient system of effective judicial case management requires IT and personnel resources which are denied to the court service.

(4) Expansion of risk

With the encouragement of dicta in the implementation lectures and the Mitchell case, there have been alarming developments which have resulted in an atmosphere where the slightest procedural mistake can be said to have attracted a sanction and a requirement for an application for relief (which will rarely be granted). The sanctions-based regime has resulted in practitioners being encouraged to take every conceivable point and give each other no quarter. This has adverse effects on the ability of parties to reach reasonable accommodations and co-operate in the "trip to settlement". The incentive is always to find or inspire a breach and then take advance of the strict approach to relief from sanctions. This encouragement of confrontation has the potential to generate satellite litigation and has certainly increased the costs and risks of the litigation process.

(5) Valuing administration of justice over justice itself

Gordon Exall has written:

"We have to make sure that the rules of procedure do not become ends in themselves. It benefits no-one (except a few specialist counsel) when the rules of litigation become more important than the merits of the cases themselves". (PI Focus, February 2014)

Kerry Underwood has made pointed comments on the following words:

"...the issue to be considered is not the interests of justice generally or even in relation to the parties but the interests of the administration of justice". (Paragraph 56 of HMRC v McCarthy and Stone and another [PTA/345.2013]).

Professor Zander's commendation of the view of Sir Jack Jacob recorded at 39.3.14 of the Final Report should not be dismissed lightly:

"The admonition by Lord Justice Bowen that 'courts do not exist for the sake of discipline' should be reflected in the principle that rules of court should not be framed on the basis of imposing penalties or producing automatic consequences for non-compliance with the rules or orders of the court. The function of rules of court is to provide guidelines not trip wires and they fulfil their function most when they intrude least in the course of litigation."

Lord Justice Underhill's comments in Abercrombie v AGA Rangemaster Limited [2013] EWCA Civ 1148 at paragraph 49 and footnote 6 are worth referring to. I shall not set them out here in extenso for fear of exceeding the word limit (and failing to obtain relief from sanctions), [but here it is anyway:

".....Where an amendment would enable a party to get out of the trap and enable the real issues between the parties to be determined, I would expect permission only to be refused for weighty reasons – most obviously that the amendment would for some particular reason cause unfair prejudice to the other party."

The footnote is as follows:

"In a passage in Smith v Cropper (1885) 26 Ch D 700 which was once much cited in interlocutory proceedings in the High Court Bowen LJ said (at p. 711): "[I]t is a well-established principle that the object of courts is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights. ... I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the court ought not to correct, if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or of grace.” The qualifications about avoiding “injustice to the other party" and cases of "intention to overreach" (that is, abuse of procedures or pursuit of tactical advantage) are of course important, and one would nowadays add a reference to the importance of proper case management. Nevertheless Bowen LJ's observations are a salutary warning against too schoolmasterly an approach"].

The alternative philosophy is not one which should be jettisoned by our civil justice system. It is not inconsistent with firmer and more robust case management. The present approach has become extreme and counterproductive.


I set out my views at the outset. The reforms and the way they have been interpreted recently have not made litigation cheaper and more efficient. They have if anything increased costs and encouraged satellite litigation. They have made the system less attractive as a product to recommend to clients in settling their disputes. In Tacitean terms, they have created a desert and called it peace.

Rule 3.14: why it should be changed

Rule 3.14, on which the Mitchell decision was based, is a crass overreaction to the issue of possibly delayed budgets.

The White Book's commentary is simply that the rule is "Draconian". Why was a more measured, gradated and, to use a vague but popular term, "proportionate" menu of possible sanctions not provided for?

The minutes of the Civil Procedure Rules Committee of 9 March 2012 show that the committee considered a note from Jackson LJ to which draft rules were attached. The draft appears to have emerged following detailed discussion with the Senior Master and, amongst others, Master McCloud. Rule 3.14 seems to make its first appearance here and its consequences do not appear to have been considered by the committee. It is time this dereliction of duty was reconsidered.


No realistic budget can be prepared without a full understanding of the potential disclosure material. The present system of disclosure statements has been implemented in a way which can be interpreted as requiring the completion of standard disclosure at an early stage so that, as part of case management, the option of standard disclosure can be dispensed with. This requires considerable front-loading of costs.


The idea of budgeting has benefits but it has been implemented by zealots who have imposed unreasonable requirements and expectations. The earlier a complete budget needs to be presented, the less accurate it is likely to be. The idea that litigation is a manageable project does not accord with the reality of most commercial litigation. Budgets are useful tools but they must not become the unassailable focal point of the case. Precedent H and its division into phases does not reflect the messy reality of most litigation.


I identify three particular paradoxes:

Consideration of the suggestions made at paragraph 5 above might improve things.

This document was prepared by me but reflects views also expressed by my colleagues at Laytons who are extremely able and experienced practitioners. Accordingly, it is submitted on behalf of the firm.

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