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A review of the cost of justice will Hit Forensic accountants hard

More than a decade after Lord Woolf’s defining report Access to Justice the
cost of justice has again been placed under the microscope following Lord
Justice Rupert Jackson’s civil litigation review, published in January, dealing
with the fundamental rules and principles of the cost of civil litigation.

Experts and forensic accountants who operate in the civil litigation area can
expect their costs and work to receive increasing attention from lawyers and the
judiciary, and could impact on the work they do.

Justice Jackson argues that the cost of experts will be most effectively
controlled by proactive, robust judicial case management. However, the cost of
preparation for such a critical case management hearing, together with the
amount of time that it would take a Judge to read into the case in order to be
fully prepared, makes it unlikely that this approach will get off the ground.

The two recommendations Justice Jackson sets out in respect of expert
evidence are that:

* Parties seeking permission to enter expert evidence should also provide the
Court with an estimate of costs.

* “Hot tubbing” or “concurrent evidence” for experts should be piloted where
all parties agree.

Experts have long been required to provide costs estimates but Justice
Jackson’s proposal seems likely to be the start of a judicial management process
regarding the content of expert reports and how work is conducted. I envisage
that in order to reduce expert costs the next step will be pre-appointment
consideration by the Court of what the expert should comment upon and how work
will be undertaken.

“Hot tubbing” or “concurrent evidence” is where areas of disagreement between
the experts are addressed in a discussion that is chaired by the Judge and where
the Judge and counsel can raise questions of each expert. The experts can also
question each other.

This is very different to the adversarial struggle of cross-examination and
undermining of credentials that often occurs – confirming that the days of the
monosyllabic “Boycott” defensive response to cross-examination are numbered.
These days it is rare that a case reaches a formal hearing but what is clear is
that, despite the rules in place regarding experts and their reports, the Courts
do not believe that all of the relevant ground is being covered efficiently.

It should be borne in mind that this costs review follows hot on the heels of
the consultation paper issued by the Ministry of Justice dealing with Legal Aid
funding reforms where fixed rates were proposed for expert and forensic work
that most accounting firms would struggle to sustain.

There’s no doubt that the cost issue is here to stay. In future, accountants
working in civil litigation will be from a burgeoning specialist “cottage
industry” (with minimal overheads) or offering fixed price projects.

Paul Smethurst is a forensic partner with accountancy firm, CBW (Carter
Backer Winter LLP).

Recommendations on witness statements and expert evidence

“I recommend two measures (in appropriate cases) for curbing litigants’
overenthusiasm for prolixity, being (i) case management measures to place
controls on the content or length of statements; and (ii) cost sanctions.
Case management: One of the points that was impressed upon me during the Costs
Review was that judges should take a more robust approach to case management, to
ensure that (realistic) timetables are observed and that costs are kept
proportionate. Case management can and should be an effective tool for costs
control.

I recommend a number of measures to enhance the courts’ role and approach to
case management, including, where practicable, allocating cases to judges who
have relevant expertise; ensuring that, so far as possible, a case remains with
the same judge; standardising case management directions; and ensuring that case
management conferences and other interim hearings are used as effective
occasions for case management, and do not become formulaic hearings that
generate unnecessary cost (e.g. where directions could easily have been given
without a hearing).”

Justice Jackson in review of civil litigation costs: final report,
december 2009

Further reading:

cbw.co.uk

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