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Personal injury (PI) lawyers were left reeling at the beginning of the year when Lord Justice Jackson published his proposals on how the litigation model should be reformed to help stem costs (see story).

The only saving grace, they thought, was that it would be at the bottom of the priority list for the coalition government. Yet with Prime Minister David Cameron promising sweeping budget cuts, lawyers have found themselves in the firing line.

On Monday the Parliamentary Undersecretary of State for Justice Jonathan Djanogly MP announced a review of conditional fee arrangements (CFAs) with a consultation due to begin in the autumn. “The Government’s taking these proposals forward as a matter of priority,” Djanogly said in a statement.

Rising costs in clinical negligence and defamation cases, he added, were a particular concern.

The latest figures from the NHS Litigation Authority (NHSLA) show that it incurred £164m in legal costs in the 2009-10 financial year. The largest proportion went on claimant legal fees, costing the taxpayer £121.5m.

At the top of the government agenda are Jackson’s proposals that civil litigation success fees be capped at 25 per cent of damages and that losers should no longer be liable for after-the-event (ATE) premiums. To help claimants pay the success fee Jackson proposed a 10 per cent rise in general damages. 

By reducing the success fee, defendants like the NHSLA would see their legal bills reduced dramatically.

Claimant personal injury lawyers, however, argue that without proper financial support claimants on limited budgets will be denied access to justice.

In response to the Jackson report Andrew Tucker, head of personal injury at Irwin Mitchell, summed up the feeling in January when he said: “In cases involving the most serious injuries, claimants may have to contribute thousands of pounds. This cannot be just or fair.

“In many cases compensation is carefully calculated to pay for a lifetime of future care and is contrary to the current intention of Parliament in setting up the ‘no win, no fee’ system.”

Edwin Coe partner David Greene suggests that the Government is addressing a more fundamental problem: “This is a social policy question about access to justice. Do you take access to justice away from claimants to give better access to justice for defendants?”

As part of the review, Djanogly also promised to take into consideration another Conservative commissioned report into health and safety legislation, which includes an assessment of whether Britain has a so-called ‘compensation culture’.

For some lawyers this might all seem like deja vu. Back in 2004 Labour’s Better Regulation Task Force published its thoughts on ‘compensation culture’, concluding it was a myth and that the perception of its existence impacts on behaviour and imposes burdens on organisation.

The then Labour government responded by consulting on whether the PI system should be streamlined across all liabilities, but concluded that this should only apply in road traffic accident (RTA) cases – an initiative put into effect in April this year, just weeks before the Con-Lib coalition took over government.

The Ministry of Justice’s predecessor, the Department of Constitutional Affairs, also looked at the thorny issue of contingency fees. This would allow lawyers to take a percentage of a successful settlement as payment for work.

This is back on the agenda as part of the CFA consultation and, this time round, it is a serious proposition.

Far from being kicked into the long grass, Jackson’s report is being taken very seriously and that could mean some major changes for personal injury lawyers.