A senior judge has been appointed to conduct a root and branch review of civil litigation costs prompted by fears that they are spiralling out of control.

Sir Anthony Clarke, the Master of the Rolls, has asked Lord Justice Jackson, a former High Court judge, to lead the review after lawyers and judges raised concerns that the high cost of litigation is damaging the UK's reputation as a leading centre for business disputes.

The rewiew will begin in January 2009 and will be presented by the end of next year.

It comes as one of the most expensive commercial disputes in British legal history plays out in a London court. The case, which arose from a dispute over control of an aluminium smelter in Tajikistan, is set to cost almost £90 million in legal fees.

Lord Justice Jackson will write the final review but will be assisted by lawyers, other judges and an economist.

Announcing the study, Sir Anthony Clarke said he believed the time was right for a “fundamental” review of the whole system.

Last year, Mr Justice Aikens, another senior judge, published a series of findings aimed at cutting the length and cost of commercial trials but lawyers have complained that judges have been slow to enforce his recommendations.

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