LCJ: why is the cost of legal services increasing, despite more competition?


Lord Thomas

Lord Thomas: “competition should have reduced cost significantly”

“Steps must be taken” to find out why the cost of legal services is increasing, despite the changed market and “great number of providers”, the Lord Chief Justice, Lord Thomas, has said.

Lord Thomas also warned, in his annual report to Parliament, that use of mediation and ADR is reducing as the number of litigants in person increases.

“The Jackson reforms are playing a vital role in trying to ensure that there is access to justice for the citizen and access at a proportionate cost for businesses,” the LCJ said.

“However, it is becoming increasingly clear that steps must be taken to examine why the cost of legal services is increasing despite the significant change in the legal market and the great number of providers of legal services.

“Competition should have reduced cost significantly, but this is not happening”.

The LCJ said the judiciary had expressed a “number of reservations” on government proposals to increase court fees and introduce the concept of above-cost enhanced fees for some commercial cases.

“While court fees often represent a fraction of litigation costs, they do have an effect, particularly on litigants in person.”

The LCJ said a combination of a “very significant rise” in the proportion of litigants in person since LASPO and in “the time taken to control the costs of litigation through costs budgeting” had placed a “considerable strain” on the civil justice system.

“Although litigants in person are not in themselves ‘a problem’ for the courts, the issue for the courts and the government is that the system has not developed with a focus on unrepresented litigants, and there is now an unprecedented increase in their incidence.

“The judiciary’s view, based on inquiries it has made albeit so far unsupported by full statistical evidence, is that cases are consequently taking longer.

“Cases which may never have been brought or would have been compromised at an early stage are often fully-contested, and the take-up of mediation and ADR has reduced.”

Lord Thomas praised the Lord Chancellor, Chris Grayling, for securing a Treasury funding package worth £713m for the modernisation of the courts in March this year. The LCJ said a “programme board” had been set up by HM Courts and Tribunal Service, including senior judges, to take forward the work.

“The courts and tribunals of England and Wales receive national and international acclaim for the manner in which they deliver justice. Without this investment their continued ability to do so would have been gravely imperilled.

“Managed decline would have been inevitable; and the outlook, given the international competition, would have been bleak for London as an international dispute resolution centre.

“That is because most of the IT systems are significantly out of date, there are no longer the resources available to manage a paper-based system, and accurate and comprehensive data essential to maintaining the system are lacking.”

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