Mediators at the centre of the post-Jackson landscape
27th March 2013
Next month sees the introduction of a radical new regime for costs in civil litigation.
It will be a dramatic change for mediators who spend their professional lives discussing costs (actual, future, potential) with litigants. Mediators had grown used to the phenomenon of the super-claimant who was insulated from exposure to costs by CFA's and insurances and could afford to "lose with impunity". But super-claimants needed to recover very substantial sums in respect of their lawyers' fees, their funders and their ATE insurance premium before they themselves made any recovery. Mediators had to deal with the conflict between the party and his/her legal advisers under the incentivised cost arrangements as well as resolve the dispute between the parties
Some of the problems mediators face look likely to improve while some look very possibly to have got more acute. No doubt new issues will emerge. One thing is for sure: the landscape is about to change radically and mediators are at the heart of it.
- CFA's and ATE premiums will no longer be recoverable in most cases so collecting them will no longer be part of the mediators' task
- A lawyer's reward for success will not be an uplifted hourly rate but a portion of the damages under the new DBAs ("damages-based agreements"). The defendant will no longer need to be concerned with any additional element of liability for costs - but the claimant and his lawyer may need to discuss whether they might agree to shave the lawyer's proportion of the damages in order to get a deal
- Cost budgeting and costs capping will increasingly be used to control the levels of cost ultimately recoverable by a winner which should also ease the burden on the paying party if costs do come up at the mediation
- In most personal-injury cases the defendant will simply not be able to recover his costs at the end of the day at all even if successful (this is the QOCS regime - “qualified one-way costs shifting"). It is designed to compensate for the loss of ATE insurance in these cases
Lord Jackson was clear in his report that mediation was now a vital part of the civil justice system and essential to achieving access to justice. He called for the publication of a book to assist judges and practitioners with all aspects of ADR. This month sees the publication of the Jackson ADR Handbook. The CMC was proud to be one of its joint editors.
But the costs regime is absolutely the canvas on which mediators paint and this is a time of major change. The effect of many of the reforms is unpredictable. The Civil Mediation Council and its members are ready for the challenge.
Bill Wood, CMC Vice-Chair