Charge of the satellite brigade

Proposals put forward by Lord Justice Jackson to reform civil litigation funding and reduce costs have backfired before they’ve even been implemented with the Association of British Insurers (ABI) gearing up for a court battle over the plans.

Jackson LJ’s plans included raising settlements by 10 per cent to compensate for successful parties no longer being able to recover a success fee from losing parties. Only that 10 per cent provision was never included in the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO), while the recoverability rule was.

So when the Lord Chief Justice Lord Judge, the Master of the Rolls Lord Neuberger and the vice-president of the Court of Appeal (CoA) Sir Maurice Kay announced a 10 per cent increase in tort damages from April 2013 in their judgment in run-of-the-mill personal injury case Simmons v Castle it rather set the cat amongst the pigeons.

The problem is that the recoverability rule will only affect conditional fee agreements (CFAs) begun after 1 April 2013, whereas the 10 per cent damages increase will affect all cases where judgment is handed down after the same date, irrespective of whether they are done on a CFA or not.

This means that there could be months or years post-April where claimants who launched their claim before the cut-off date will benefit from the uplift as well as being able to recover costs from the losing party.

For the CoA’s top three to make such a provision via a judgment has sparked uproar. The ABI has instructed lawyers to challenge the decision and no doubt the case will make it the Supreme Court.

With little less than a year to go the judges are already the cause of some satellite litigation, the very thing they set out to avoid.