Feb 20 2009

English litigation: 140 times more costly than the European average?

Thanks to a rather inaccurate1 article in yesterday’s Guardian for pointing to a study by the Centre for Socio-Legal Studies of the University of Oxford on the comparative costs of defamation proceedings in eleven European jurisdictions, not including Scotland. The conclusion, describing the exorbitant cost of a decision to litigate in England rather than elsewhere, was this:

The data showed that even in non-CFA cases (where there is no success fee or insurance) England and Wales was up to four times more expensive than the next most costly jurisdiction, Ireland. Ireland was close to ten times more expensive than Italy, the third most expensive jurisdiction. If the figure for average costs across the jurisdictions is calculated without including the figures from England and Wales and Ireland, England and Wales is seen to be around 140 times more costly than the average2.

I suspect few lawyers with cross-border experience would be surprised to read that English litigation is likely to be a great deal more expensive than anywhere else in Europe. This has long been so. But… a hundred and forty times the European average? Other studies have suggested England is only twice to ten times as expensive as other jurisdictions3. A quick scan of this rather naïve study suggests that the difference may not be as great as here claimed. Like is not clearly being compared with like. It is far from clear that the researchers, who are post-graduate students with no apparent practical knowledge of litigation anywhere, were aware of this. The English proceedings are taken to be at top-level, in the High Court in London, with a city firm, fashionable silk, and so on; while the German proceedings (supposedly the cheapest in Europe) are, reading between the lines, pretty obviously a small claim in a local court. In this way, claimant costs (i.e. agent and client expenses) for a notionally-identical claim are brought out at an astronomic £1.5m for the English claimant (without CFA) for a two or three-week trial, against a mere €750 for the German claimant for a half-hour trial. Little serious attempt is made to bring out whether these differences in costs are characteristic of the different national jurisdictions, or merely of litigation choices by lawyers. It is visible that the English proceedings are assumed to be conducted without the slightest regard for expense. This may be a characteristic of English High Court litigation, but it can hardly be assumed to be universal in England.

None of this, at first sight, is of any particular relevance or interest to a reader in this country, other than as ammunition in persuading cost-conscious clients to prefer litigation in Scotland to litigation in England if there is a choice. At a very rough guess, a similar claim in Scotland to that described would probably cost a prudent pursuer something like seven to ten per cent of the English figure quoted by this study if it was fought all the way to a proof in the Court of Session. The study does however bring out the consequences of English CFA arrangements, particularly for freedom of the press, which are being considered for introduction into Scotland at exactly the moment when they are being considered for ditching, or severe restriction, in the country of their birth, a step the Medical Defence Union welcomed last week.

Update, 25 February

The Ministry of Justice issued a consultation paper on 24 February on proposals to control costs in defamation proceedings in England and Wales. The consultation is open until 6 May.

  1. The author believes, for example, that we have Conditional Fee Agreements in Scotland. [back]
  2. Page 3. [back]
  3. See this 2006 study of patent litigation for one example (although it wrongly refers to English courts as ‘British’). [back]

One comment published

One comment published to “English litigation: 140 times more costly than the European average?”

  1. NCNo Gravataron 17 Mar 2009 at 9:54 pm

    I disagree with your point about the researchers – only a handful are postgraduate students; most are partners, or lawyers, within large firms. That said, a great deal of the contributors are from the same, very large and profitable, world-wide law firm, and so I wonder if that (alone) skews some of the results.

    Looking at the feedback on “fees” (and I refer specifically to England/Wales here, but the general principle can be carried across each jurisdiction) (see eg page 56 of the report) it seems entirely naive to just ask two people what the average fees for defamation lawyers are in London. To pick some numbers out of the air (which the contributors seem to have done) which relate to 3 or 4 firms is, I think, clouding the real picture of how much defamation litigation in England/Wales can cost. Bearing in mind also that the contributors to the paper are largely from one (very large and expensive) firm, I think that the real picture is, again, clouded.

    Surely a fairer analysis would have been to check for all defamation cases, over the last 10 years, which went to the highest court of appeal in each jurisdiction. Then determine the solicitors who represented the claimants in each of those cases (a task which can be fairly easily carried out by reading the beginning or end of the judgments) and contacting each of these firms to ask how much they would charge for various levels of staff to represent a defamation claimant. Then take an average of these cases. That would at least give a fairer average (I would have though) and across a level playing field (which, as you mentioned in the original post, wasnt there in the study).

    Altogether a somewhat baffling, although, conceptually, certainly not unworthwhile, study.