Stranger than fact

A review of The Associate by John Grisham and the Preliminary Report on the Review of Civil Litigation Costs by Lord Justice Rupert Jackson

Life imitates art, at least according to Oscar Wilde. John Grisham’s latest novel gives us an exception to prove the rule, and as imitations of life go, The Associate struggles. It has all the necessary ingredients for a classic Grisham pot-boiler, and he is a master at the genre: unbridled greed, unprincipled lawyers, unparalleled hypocrisy permeating every sentence. Of course, underneath it all Grisham is really just giving life to the old adage that those who can do, those who can’t write books about it - or go into legal journalism.

This is the tale of Kyle, a bright, young all-American graduate of a blue-chip law school and his journey through the vale of New York law. The son of an equally all-American would-be Atticus who would not sell his soul for the sake of keeping in touch with the common man, Kyle dances with the devil and then has to atone. A night of law school drunken debauchery which culminated in the alleged rape of a student comes back to haunt him and he is forced into a career at one of New York’s largest commercial law firms. He is blackmailed, he despairs, he takes on the bad guys, he struggles and…. well, you know the rest.

Straight away, the parallels with the path of despair in Paradise Lost or the metaphor of resurrection leap out of sight. Indeed, what the book lacks in literary depth is only compensated for by the fact that you can read every fifth page and still get the gist. But the yarn flows along smoothly; after all Grisham does tell a good tale, even if the plot is a bit thin and the characters even thinner.

That, however, is not the novel’s greatest failing. His account of New York lawyers is intended to shock, but does it? He describes an environment which remorselessly feeds America’s finest youth into a vast money-making shredder; where lawyers do not work, they just bill time; it is a world of M&A, non-stop pursuit of money where lunch is very much for wimps, unless it can be charged to a client’s file. Junior associates are charged out at $400 per hour, partners at $800, to provide ‘the best damned legal advice money can buy’.

The point is, of course, that for anyone on the civilised side of the Atlantic this is rather small beer. City lawyers may salivate at the thought of a lawyer getting up at 04:30 for $800 dollars an hour, but at current exchange rates that is barely £500, and no self-respecting claimant clinical negligence lawyer in London would even get out of bed for that sum. Giving an interview for an article published in March a well known PI lawyer from a firm with offices in South London and Surrey told The Times that lawyers like him are a “drain on the public purse” and in about half of cases his costs exceed the damages paid to his client.  Grisham has yet to describe the grim world of CFAs, of costs bills where a claimant lawyer can demand to be paid £575 per hour for reading a book published by the late wife of his client, where an evening meal and 2 glasses of wine count as legal costs, presumably because the lawyer concerned doesn’t eat at home.

Grisham may well say that there is madness in a system where millions are spent on legal fees in a contractual dispute which could cost billions, as in The Associate. But what would he make of the gravy train here? Only a few years ago, at a conference organised by and on behalf of Claimant clinical negligence lawyers in London, a visiting Texan personal injury lawyer declared that he only acted for people who could neither walk nor talk and confidently expected to run up legal costs of several hundred thousand dollars in such cases. The reaction was rather muted, probably because that sort of sum on that sort of case in this country would be considered embarrassingly small, almost like letting the side down.

As the NHSLA has been at pains to point out, claimant costs in clinical negligence cases in this country are frequently disproportionate. No-one on the defence side is surprised these days at paying compensation and probably three, four or five times that in legal costs for the Claimant’s lawyer.

The real mischief is, of course, conditional fee arrangements. Claimant lawyers are encouraged to discard borderline cases, defendant lawyers are encouraged to settle as soon as possible to avoid the massive uplifts in costs that will accompany litigation. At the same time, the CPR are supposed to encourage cards on the table litigation, to make early resolution easier. The problem is that the prospect of £700 an hour on a CFA keeps those cards firmly face down for as long as possible so as to prolong the litigation and keep the money coming in.  The Courts cannot or will not intervene and there seems to be no political will for no-fault compensation schemes or tariff based legal remuneration.

CFAs were a prime target when Lord Justice Jackson published his thoughts on Civil Litigation Costs on 8 May 2009 http://www.judiciary.gov.uk/about_judiciary/cost-review/docs-prelim-report/volume1.pdf.  It is a preliminary report for discussion purposes.  Jackson LJ gives no recommendations or opinions as such, but has given clear indications of his concerns and the following are some main areas identified:

1. Fixed fees - He has suggested that costs in personal injury matters are remarkably high and suggests that a way of controlling these is by extending fixed costs.

2. CFAs - It looks as if they are here to stay, but whether the success fees and the insurance premiums will be recoverable is in question.  Jackson LJ has indicated that he sees "risk-free litigation as a problem".  He thinks that there is room for possible contingency fee arrangements.

3. Discovery - He indicates that an expansive approach is preferable for many categories of litigation.  Limited/no disclosure must at least be considered and he suggests that a flexible approach may be appropriate.  There are other proposals in relation to cutting the cost of Case Management.

4. Referral fees - He does not appear to be attracted to referrals generally saying "referral fees add to the costs of litigation" and appear "to have no benefit".

5. Combined funding - He believes that a combination of funding is appropriate, including third party funding for litigation and CLAF (Charitable Legal Aid Funding).  This would seem to work like Legal Aid with the fund taking a portion of the damages for future cases.

6. Costs-shifting - Seriously interfering with costs-shifting "does not appear to be a realistic option".  However, one way costs-shifting is suggested from the Claimant to the Defendant (if successful) but not in the other direction. For example, in PI matters the insurance companies will not be able to recover costs if they succeed (ie. Removing the need for success fees and ATE premiums) but this seems to fly in the face of his comment that he is against risk-free litigation.  He is alive to the risk that this may actually promote more unmeritorious claims or unreasonable bevahiour.

7. Format of bills - He does not like the current form of the bill of costs. Apart from the satellite industry that has developed around producing and responding to these bills in a language of their own upon mock 18th century parchment one could well ask who does?

8. LEI - He thinks that in time there will be more cases being funded by legal expense insurance and will look at ways of promoting wider take-up.  The problem is that many Claimant lawyers do not like them, no doubt partly because insurers operate panels of lawyers and exert downward market pressure on fees (the absence of which is one reason for the problems we have today)
 
Phase 1 of the review is now complete.
 
Phase 2 will be a time for discussion and consultation.  Responses are due by 30 July 2009 and we would like to encourage all stake-holders to have their say.
 
Phase 3 will result in his final report with proposals.  This is expected to be completed by December 2009.

Taxpayers will no doubt be hoping that submissions by the NHSLA and others on costs to the Jackson inquiry will bear fruit even if only to highlight the current absurdities. Of course, the real question is why Grisham opted to slate legal greed with the example of a second tier money-making machine. With his reputation for meticulous research and gritty detail, the English regime for paying claimant lawyers in clinical negligence cases would be fertile material. Perhaps on the other hand he was aware of it, but thought that if he put it in a novel no-one would believe it.  For a lighter read and a companion on the beach this summer we would recommend The Associate by John Grisham over Jackson LJ’s 679 page tome.  However, the unsustainability of the present costs situation in civil litigation is a subject which touches all of us and the pressure for something to be done is mounting.  In the July 2009 edition of Claims-on-line Joanne Easterbrook will provide a more comprehensive review of the proposals.