Power Lawyer Phil Newland, principal of litigation funder LPF Group has asked insurance companies to support initiatives designed to improve access to justice and prevent time-wasting delays that waste court resources.
Delaying tactics ‘abuse the justice system’, he said in a press statement which advocated the prompt hearing of meritorious claims and the awarding of full costs to the winning party in order to discourage the ‘wrongdoer’ pursuing delaying tactics that result in their court loss.
LPF’s view is that by having parties to court proceedings exposed to pay full costs would hold both defendants’ and plaintiffs’ feet to the fire by having them carefully consider the merits of their case, which in LPF’s view would see meritorious cases resolved more quickly at lower cost, freeing up court time.
LPF Group is asking insurance companies to support a set of administrative initiatives that will deliver better access to justice by discouraging behaviour that that wastes court resources and prevents the timely resolution of cases. The New Zealand-based litigation funder says access to justice remains a serious issue in New Zealand because of the lack of Court capacity and delaying tactics that abuse the justice system.
In the UK and Australia costs are usually awarded on an indemnity basis, while the New Zealand situation sees costs are awarded on scale basis, which may be 30 per cent of actual costs — effectively encouraging expensive time-wasting strategies.
LPF suggests the best way to speed up the legal process, improve returns to plaintiffs and discourage non-meritorious time wasting defence tactics or claims is to award payment of actual costs, in full, to the successful party.
“A huge amount of Court time is tied up needlessly because of the deliberate tactics in major civil litigation adopted to simply delay and escalate costs in the matter. This impacts everyone wanting to use the court system and the only winners are the lawyers,” Newland said.
Changing the way costs are awarded would represent a serious disincentive for plaintiffs to bring flimsy cases or defendants to run tactical time wasting defences or create delays in interlocutory steps, such as discovery.
LPF’s view is that by awarding actual costs, punitive costs and interest it will promote rational behaviour by all parties and lower the overall cost of litigation.
Insurers have opposed efforts to legitimise the litigation funding mechanisms as they continue to express skeptical views on its merits, which has given rise to ethical issues and other questions, but the LPF call claim the initiatives will give the insurance industry the protection it is calling for against what it considers to be frivolous lawsuits being undertaken with the assistance of litigation funders by improving outcomes for successful plaintiffs and increase transparency.
Impeding access to justice
LPF Group, New Zealand’s largest locally based litigation funder, has 10 years’ evidence to show that the payment of costs at scale significantly reduces the value of the outcome to the successful party and provides a perverse incentive to waste the Courts’ time.
“The principle at stake is access to justice and how the unfettered use of deny, delay and defend strategies —encouraged by awarding scale costs — impedes access.
“The administration of justice and the allocation of responsibility and compensation are the province of the courts. However, courts are being clogged up by tactics designed to delay hearings and increase costs rather than address the substantive matters.
“The goal of the courts should be to deliver real and substantive compensation to victims of wrongful conduct or clear blameless defendants as quickly as possible. In our view plaintiffs and defendants should both be able to seek full recovery of costs. We invite the insurance industry, if they are serious about improving access to justice, to join us in requesting the Law Commission recommend the award of real and actual costs.”
Actual and punitive costs
LPF Group also suggests that that funding by litigation funders and insurance companies be disclosed at the outset of a case and that, where either form of funding occurs, the courts award 100 per cent of the actual legal, witness, trial, security and other costs incurred to the successful party.
To prevent abuse of process, Courts should have the power to award lesser costs if they consider that a party has unreasonably incurred these, as they can in the UK.
LPF Group has also requested that the courts be able to award punitive costs to apply in cases where the unsuccessful party has delayed discovery, failed to comply promptly with court orders or otherwise drawn out a case unnecessarily in a way that impedes the efficient working of justice.
The company also suggests that Courts should also have the power to charge proper interest on judgement sums (including unpaid costs).