Welcome to the first of our quarterly newsletters that brings a mix of our usual blend of news and light hearted moments from the law, as well as a broader look at the recent case law changes that we feel should be highlighted to our clients and not just in costs. Last year was one of significant change for us as we re-located our main offices to the beautiful Welsh Borders. We’re now to be found in a former (and lovingly restored) 19th Century pub, complete with hand tiled fireplaces and exposed oak beams, and much to the disgust of CAMRA - but that’s a story for another day. The theme of this newsletter is that of Jackson: The Time is Now, as we await the outcome of ongoing changes to the Bill format. With contributions this month from Liz Love, of Kings Chambers, we consider the wider implications of these ongoing changes in the sector. We hope you enjoy our musings, and don’t forget to enter this month’s competition to win a £25 Amazon voucher.

1. Auxilium News
Issue 1 - September 2017
Tails on the Bar
Welcome to the first of our quarterly newsletters that
brings a mix of our usual blend of news and light hearted
moments from the law, as well as a broader look at the
recent case law changes that we feel should be highlighted
to our clients and not just in costs.
Last year was one of significant change for us as we re-located our main
offices to the beautiful Welsh Borders. We’re now to be found in a
former (and lovingly restored) 19th Century pub, complete with hand
tiled fireplaces and exposed oak beams, and much to the disgust of
CAMRA - but that’s a story for another day.
The theme of this newsletter is that of Jackson: The Time is Now, as
we await the outcome of ongoing changes to the Bill format. With
contributions this month from Liz Love, of Kings Chambers, we
consider the wider implications of these ongoing changes in the sector.
We hope you enjoy our musings, and don’t forget to enter this month’s
competition to win a £25 Amazon voucher.
1
Win a £25
Amazon voucher!
It’s really simple to enter our
competition for a chance to win a
£25 Amazon Voucher
Just visit our website and subscribe to our newsletter.
One winner will be chosen at random on the
30th September 2017.

2. Jackson: Then and Now
Despite the fact, according to Professor Peysnor in a report
by the CJC Costs Forum, there was not ‘apart from some
egregious examples any generally accepted research
evidence that costs were escalating out of control’,
Sir Rupert Jackson was commissioned to produce a report
on civil costs. In his final report, he set out 109
recommendations to reform civil justice. It is beyond the
scope of this article to consider the impact of all those reforms,
however, we will briefly consider a few of the key ones.
Recommendation 18 – there should be fixed costs in the
fast track; Recommendation 2 – the rules should be
simple and Recommendation 22 – claims should be
monitored to ensure costs savings achieved are not
negated by satellite litigation
Whilst in his final report, Jackson, LJ maintained that all
claims in the fast track should be fixed, in actual fact, only a
limited number of claims were brought under a fixed costs
regime (FCR); namely RTA, EL and PL claims. Despite the
recommendation that the rules should be simple, this has
not been the case. The FCR rules, in addition to other areas
of the reforms, have given rise to a substantial amount of
satellite litigation due to issues such as ambiguity in the
wording of the rule and including in relation to the
inter-relationship to the FCR and other parts of the CPR,
such as Part 36.
Recommendation 26, 28 and 29 – there should be financial
penalties for any health authority which, without good
reason, fails to provide copies of medical records… where
the NHSLA is proposing to deny liability, they should obtain
independent expert evidence on liability and causation
before sending their letter of response and there should
be a senior officer to whom claimant solicitors can report
cases of defendants failing to address issues.
None of this recommendation was implemented and
Claimants still continue to complain about such practices
amongst Defendant health authorities and solicitors.
There is no doubt that such conduct increases costs,
however, when the department of health recently
launched its consultation on fixed costs and despite the
evidence in the final report, the blame for the high costs in
clinical negligence cases was placed squarely and entirely
at the door of Claimants. There is currently a report being
prepared by the National Audit Office into clinical
negligence costs, which may shape the future of how such
claims are dealt with. In the meantime, Jackson, LJ has
published his supplemental report in relation to fixed
costs. His comment was that the consultation was merely
a ‘step in the right direction’ by the department of health
and rather, he suggested there should be a CJC committee
be set up to attempt to create a streamlined process for
these claims in addition to compiling a fixed fee matrix.
What step the department of health choses to take next is
yet to be seen.
Recommendation 32 and 90-93 – there should be a
standard costs management procedure, it should be
piloted in clinical negligence, there should be training on
costs management for the judiciary and there should be
primary legislation to make rules for pre-issue costs
management
When costs management was introduced, it did so with a
bang. Hearings that dealt with budgets as well as
directions suddenly took many times longer than they had
previously. Judges moaned of having had little or no
training and struggled with how to deal with issues like
hourly rates and proportionality on budgets. The courts
became so backlogged that a temporary cessation of
budgets in clinical negligence cases was called to allow the
courts time to catch up. As with fixed costs, there has
been -and continues to be - a raft of satellite litigation in
relation to budgets; this being despite recent claims that
budgeting is working well. It seems, however, that if faced
with a choice between budgets and fixed costs, parties
would rather continue with this process. It can be hoped
that much of the ambiguity and issues with costs
budgeting has now been resolved through the various
cases so that costs management will become a more
effective process, but that has yet to be seen.
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3. When Business and Lawyers don’t mix
AA Law recently announced that it is shutting down its legal services activity, having declined to
take on any more clients since November. When it was originally formed in 2013, it partnered with
Lyons Davidson to offer personal injury services to its clients.
In the last year, AA Law’s business has slowed sufficiently
to force a ‘strategic review’ of its activities. The AA Law
brand simply wasn’t doing enough business, and is
considered to be in the process of leaving the market.
The AA’s move into the legal market followed the
introduction of the Legal Services Act, which was made
law in 2007. It sought to improve competition among legal
firms by bringing new entrants into the market.
The Act essentially allowed brands like AA to offer legal
services under an Alternative Business Structure (ABS) –
an alternative to the traditional law firm. It also meant
that legal firms could allow investment from parties who
came from outside the legal sphere.
As such, the ABS essentially disrupts the traditional career
path, allowing staff of the non-legal side of the company
to cut in and invest. When the ABS was announced, there
were concerns in the sector that quality would slip, and
that fixed fees may force prices down. At the same time,
the ABS has opened up training and allowed
apprenticeships to be offered.
The AA therefore had the flexibility to bypass a panel
system for claims. Other brands were quick to get in on
the act. BT, Admiral and other household names now
have ABS offerings that are designed as value-added
services to their core offering.
But despite this, it seems that AA Law was not gaining the
traction or customer base it needed. Perhaps this is
because customers don’t buy legal services in a predictable
way, and are not necessarily brand-aware. After all,
shopping for legal services is not quite the same as
shopping for a telephone line or a car insurance policy, is
this is perhaps why companies like the AA did not generate
the client base they had expected.
Companies like AA Law have proven that mixing business
and law is not easy. The ABS has given us a market where
law firms don’t necessarily have to be run by lawyers,
which is a concern for the firms that are. At the same
time, clients are open to new ways of working, and they
want to see efficiency and innovation. The legal sector
could arguably learn a lot from its corporate neighbours,
particularly when it comes to agile working practices and a
more open attitude to change.
Nobody really knew what would happen when brands
started to become lawyers, and forming an ABS is a very
slow process, so it was bound to be a while before the first
casualties emerged. Consumer choice may have improved,
and competition may be healthy, but AA Law is one of the
first high-profile failures that may prove that the local
solicitor need not worry just yet.
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4. Why do Fixed Fees Scare Lawyers?
We live in an age where practically everything can be bought with a fixed payment. Want cloud
storage? Sign up for an annual bill. Need an expensive piece of software? No problem: rent a licence
in instalments. Need electricity, gas and mains water? Here’s your monthly Direct Debit.
The majority of consumers – and small businesses, too –
take comfort in predictable fees. They’re used to knowing
exactly how much they will pay, and when. They don’t
want bills to arrive unannounced.
We find it puzzling that so many firms are surprised by the
move towards fixed fees. Your clients are used to knowing
how much a service will cost. They want the same
payment terms that their other suppliers give them. For
too long, lawyers have demanded that the risk is on the
other side of the transaction.
By communicating with a client at the very beginning, a
legal firm should be able to set an appropriate fee and
supplement that fee if it’s found to be necessary. Yes,
there will be times when the firm gets it wrong, and there
will be an investment of time at the quoting stage, before
the work gets underway. And there may be times when a
quote has to be changed when further facts are revealed.
But in a modern business landscape, it’s surely easy to see
why small businesses are so reluctant to write blank
cheques.
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Closing thoughts - the Future of Jackson
The Jackson Reforms (for lack of a better term)
began in 2010 with the publication of his
report, some recommendations were
implemented in 2013 and a second of change is
due to be on us in 2018.
To many this a shock, but why? Too many fixed or
controlled costs are a shock, but why?
Every business in the world operates with a costs base
(and no I hear you cry, hard fought litigation, it’s
impossible to budget). And that is the problem when
auditing or advising providers of finance to the legal
sector. The lack of monetary control shown by so many
law firms is frightening.
No business runs without knowing its costs, where it may
make or lose money and yet since 2000 the often 100%
success fee on base costs, seen as a right by so many,
seems to have driven many firms to living in some form of
euphoria of there is a money tree in the office.
The ongoing reforms are an opportunity for new thinking,
the use of AI for automated tasks far from taking work
away from lawyers will allow a refocus for many to get back
to doing what they became lawyers for. To help people, to
advise people, and to solve problems for people.
The reforms are a chance for neoliberalism to be replaced
and a return to what the word advocate means - putting a
case forward for someone who can’t.
We hope you enjoyed our first newsletter from our new headquarters,
and that you found it of interest. If you have any questions or comments,
don’t hesitate to get in touch.