Lord Neuberger, the Master of the Rolls, said an alternative to hourly billing for legal work is needed urgently.
He said businesses that base their charges simply on costs “do not deserve to succeed” or even “survive”.
Lord Neuberger said some form of fixed costs for legal work would be a more viable alternative.
In a speech to the Association of Costs Lawyers, he said: “Hourly billing at best leads to inefficient practices, at worst it rewards and incentivises inefficiency.”
He said it penalises those who are able to bring cases to a close quickly, adding: “It also penalises the able, those with greater professional knowledge and skill,