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the Jackson Report - Civil Litigation Costs Review 2010 The Jackson Report – Civil Litigation Costs Review 2010 Sir Rupert Jackson’s one year long review of costs in civil cases culminated in the publication of a 584 page Report on 14 January. There is far too much to absorb in the short time since then, but the main aim is to promote a package of measures designed to facilitate access to civil justice at proportionate cost. It also undertook a review of case management procedures and has regard to different costs regimes. The main findings and radical recommendations that may be of interest to members, are summarised below. Alternative dispute resolution (especially mediation) Mediation / and Joint Settlement Meetings are efficacious for all kinds of claims including personal injury claims (in the latter case with specialist mediators versed in PI law and practice) Small businesses and the public as well as some lawyers and judges do not know of or accept the benefits of ADR and a serious education programme is needed Mediation has a significantly greater role to play than is currently recognised It is important that mediation is undertaken at the right time (i.e. too few mediations take place before proceedings) Mediation should not be compulsory BUT must be encouraged, directed and parties penalised for unreasonably refusing to participate The message is that there will be a greater role for mediation and a need for specialist mediators Conclusion Since what is needed is a culture change not a rule change, perhaps we can expect developments in this area sooner rather than later. Costs The Report recommends – An end to the recoverability of success fees and insurance premiums under conditional fee agreements – these should be paid by the party who incurs them; private individuals and SMEs would be encouraged to take out Before The Event Insurance Qualified one way costs shifting for certain types of claim for example personal injury, clinical negligence, IP and defamation, with other types of claim to be considered. Thus a claimant would be able to recover costs from the defendant if successful as at present, but would not be liable for the defendant’s costs if unsuccessful in the claim (unless he behaved unreasonably or unjustifiably) Fixed costs of £12,000 pre trial in fast track cases and extending the fast track to more cases Streamlined procedures and a sued guide for the Mercantile Court; an extended small claims track for SME business v business claims The abolition of the indemnity principle – meaning a party entitled to costs need not show a liability to its own representatives for the costs or amount of costs claimed; this would facilitate contingency fee as well as conditional fee agreements Making contingency fee arrangements available for contentious work thereby adding another method of funding provided that the unsuccessful party ordered to pay costs will only be liable for conventional costs and the agreement are regulated to safeguard clients IP claims will be dealt with by a Patents Court with extended jurisdiction and capped costs Abolishing referral fees Repealing large parts of the Practice Direction on pre-action conduct to save complexity and cost Replacing standard disclosure (of documents) with a ‘menu’ of disclosure options in some types of cases and training for all lawyers and judges in e-document management and disclosure Stronger use of case management powers including costs management – which may reduce costs or simply limit recoverable costs e.g. reducing the length and prolixity of witness statements Increasing damages by 10% to compensate for inability to recover success fees and or insurance premiums in CFA cases Increasing damages by 10% when a defendant fails to beat a claimant’s part 36 offer Creating a costs council to decided guideline hourly rates Improved costs management, training for all lawyers and judges in costs budgeting and management and a simplified bill of costs and IT-streamlined procedures for detailed assessment Extending electronic working as in the TCC and Commercial court to all other high courts county court and district registries The T&C and commercial courts are left largely untouched as they work satisfactorily Preliminary thoughts Some of these measure will doubtless improve the procedures and help to reduce costs particularly the front end costs which have increased dramatically and at least in part as a result of pre-action protocols and practice directions; and in further part by reason more extensive and sophisticated disclosure including electronic disclosure. At the same time any shift away from conventional costs awards is unlikely to be welcomed by businesses who expect to recover their costs if successful. Whilst initial proposals for limited costs shifting will be confined to cases involving individuals or small businesses, and specific types of claim (see above), it may be an indication of things to come. Also many will fear a system of contingency fees. Not least because it requires significant funding and careful risk management that smaller law firms may find a problem, could lead to a denial of justice to those whose claims are not very strong, and might result in conflict between lawyer and client. There is however no doubt that the proposed reforms give the Institute and its dispute resolving members the hope and opportunity of an increased share of the dispute resolution market. Arbitration, if not mediation, may prove to be a more attractive option to public authorities, commerce and industry. The time for users to start thinking about the future is now before they enter into contracts which provide for litigation in an uncertain future. A well crafted dispute resolution provision could take some of that uncertainty away by adopting the best and rejecting the rest of the CPR. K T Salmon Partner Mace & Jones For CIARb © all right reserved O:\KTS\CIArb\2010\The Jackson Report.doc

LETTERS OF INTENT It is often said that Letters of Intent are not contractually binding, or that they cause more confusion than they are worth. This is because they are often poorly drafted, are used inappropriately and their effect is not properly understood. There are broadly two types of Letter of Intent. The first merely provides comfort to the Contractor but no commitment from the Employer. The Employer may say, for example, that he intends to enter into a contract and would the Contractor please mobilise in preparation. An intention for the future is not contractually binding, and if the Contractor is not awarded the contract, there may be a quarrel over money. The second type of Letter forms a contract in its own right, and is used where it is genuinely not possible to enter into the formal contract at this stage because full particulars have not yet been agreed, but there is some compelling reason for progressing the works at once. It may be, for example, that the Contractor must order materials or procure the design now in order to meet the proposed programme. The Contractor requires some contractual comfort, and the Employer requires definition of the scope of works and payment. If it is essential to progress the works before the formal contract is agreed, the Letter should be contractually binding. It should set out the nature and scope of the works, the maximum amount to be paid for that work, and it should provide a mechanism for valuation and payment. It should state the form of the formal contract that will be used when negotiations are completed (e.g. JCT D&B), it should state that the formal contract will supercede the Letter and that work carried out under the Letter will be deemed to be carried out under the conditions of the formal contract. The Letter should make it clear that the Employer is under no obligation to enter into the formal contract or to give the Contractor any further work and may terminate the instruction contained in the Letter at any time subject to payment of a reasonable sum. It may be appropriate to include provisions whereby the Employer may step in to any sub-contracts or orders for materials if the instruction is terminated. There may be further provisions relating to the provision of copies of drawings and other documents, confidentiality, the CDM Regulations and any indemnities to be given to the Employer by the Contractor. There may be express provisions relating to dispute resolution, and disputes may not be referable to arbitration unless there is a written arbitration agreement. Any variation to the scope of work encompassed by the Letter should be recorded in writing, or statutory adjudication may not apply. The Contractor should sign and return one copy of the letter to indicate his acceptance of its terms, although there may be acceptance by performance if the Contractor proceeds with the works without signing the Letter. Once the letter is in place, the Contractor knows that he will be paid and the Employer knows his liability is limited. The parties should continue to negotiate the formal contract with a view to signing it as soon as possible. One effect of a Letter of Intent is that the Employer will lose much of his bargaining power, because the Contractor knows that he has the Employer on the hook and is unlikely to search for a new contractor. Thus the Contractor can insist on his own terms during negotiation of the formal contract and the Employer has little room to manoeuvre. Another effect may be that the parties take their eyes off the ball, as the works progress, and never get round to signing the formal contract. If the formal contract is not signed, and something goes wrong on site, and the parties’ obligations are not clear, there may be confusion and acrimony. A Letter of Intent may allow the work to proceed if necessary, but should not be used if it is not necessary. Daniel Brawn Kuit Steinart Levy LLP

Dublin International Conference Programme & Agenda The following is the Conference Programme and Branch Officers Meeting Agenda for the Inernational Conference weekend 02-04 Nov 2007. Please see our Chairman;s report in the News section. Branch Officers Agenda.pdf

Chairman's Report to the AGM 07.03.07 The Chairman gave his report to the Members present at last night's AGM. CIArb NW, Branch Chairman's Annual Report 2006-7, 07.03.07.pdf

Second Annual Congress Report Representatives of the Branch wenat along to the November 2006 Congress and a report is provided here. Report on Second Annual Congress and Conference - Short.pdf