A scheme to reduce the price of going to court for smaller builders is being tested at Birmingham’s branch of the Technology and Construction Court
The pilot, which began on 1 June, is based on proposals by Lord Justice Jackson, the former head of the TCC, in response to small firms’ complaints about the expense of litigation.
Under the scheme, lawyers have to submit “detailed budgets of their estimated costs” at regular intervals to the judge, who then amends or approves them.
Jackson hopes this process, which is being trialled on cases worth about £25,000-500,000, and is also taking place in the Mercantile Court, will make it easier for SMEs to litigate. If successful, it could be rolled out nationwide.
Ian Yule, a partner in Shakespeare Putsman, said: “For a typical case, in which the costs are £200,000 on each side, it may save each £50,000.”
He added: “Many cases are virtually impossible for small companies to litigate, because of the risk of losing and the consequent costs.”
The National Federation of Builders said: “This is only a pilot scheme and needs to stand the test of a tangible work-out in the courts. There is a concern that the cost management process itself actually adds to the legal bill.”