Following the Jackson Reforms the treatment of costs in civil litigation will now enter a new era. In my view this goes hand in hand with moving away from looking for someone (other than ourselves) to ‘blame’ when something goes wrong.

Of course it’s early days, but I’d like to suggest a few thoughts:-   Lord Jackson emphasised in his report that mediation is an essential part of the civil justice system and key for achieving access to justice.

  • Cost budgeting, management and capping will be used to control the levels of costs recoverable by a ‘winner’. This should help soften the blow to the ‘paying’ party if costs do come up at the mediation. So in multi-track cases (usually cases where over £25,000 is in dispute), parties are now required to prepare a costs budget which must be agreed between them and approved by the Court in the early stages of a case
  • In my experience it often happens that participants can settle all the practical and legal issues by mid afternoon in a mediation meeting – leaving the costs as the stumbling block – often taking longer to resolve than the other issues! To the participants (and often to the mediator) this doesn’t seem right.
  • As mediators I believe we spend too much of our professional lives discussing costs (here I go again) It seems to me that the participants, and often their legal advisors have an unrealistic view of the likely costs that should be recovered in a mediation. Each side views their case as a ‘winner’ so they think their costs should be paid by the other participants. The harsh reality of a negotiated settlement is not as simple. Business Disputes (as with life in general) is not just about ‘winning’ and ‘losing’
  • So I see the cost budgeting, management and capping changes as a good move, but like all changes it will take time to bed down.
  • In my view, the earlier the parties to a potential dispute can focus on the likely impact, not only on costs, but on the distraction of time, stress and uncertainty that litigation involves, the more they will take responsibility for their own role in bringing about and then settling their dispute.  It’s not appropriate to look around for others to blame (and this sometimes includes the mediator!) If the Jackson changes can help us start to move away from the ‘Blame Culture’ then this will be a real achievement. It will take time and a change of culture and mindset which will not happen overnight.