News Litigation The Bar Jackson proposes sweeping reforms to cut litigation costs By Margaret Taylor 14 January 2010 13:32 13 December 2015 17:36 Sign in or register to continue reading. It's FREE Sign in Email Password Keep me logged in Forgot your password? Not registered? It's FREE! Register now Register with The Lawyer Carrots 14 January 2010 at 14:16 If PI lawyers are to be faced with such disincentives, then fewer borderline cases will be taken on and access to justice will be further hindered, will it not? Reply Link Derek Patterson, Managing Director of IMLF 14 January 2010 at 15:16 As the first systematic funder of litigation in the UK, with a track record of investment outcomes established over 7 years and 52 claims, in the UK and US, we are dissatisfied with some of the major recommendations made and believe they will impact negatively on access to justice, particularly for claimants with smaller claims. Specifically: restriction of funders control, potentially inflexible capital restrictions, and the retention of champerty and maintenance. Reply Link Association of Personal Injury Lawyers 14 January 2010 at 15:22 The claim that ending recoverability of success fees and after-the-event insurance premiums will lead to cost savings is highly misleading. The costs will still be there. They will just shift to the claimant who will have to pay success fees and insurance premiums out of his damages. And under Sir Rupert’s proposals for one-way costs shifting, the claimant will either pay for an insurance premium out of his damages, or risk paying for expenses such as medical reports and court fees if he loses the claim. None of this is the case under the current system which works on the ‘polluter pays’ principle. Reply Link Liam O’Connell of law firm CMS Cameron McKenna 14 January 2010 at 15:31 My feeling is that many clients will find contingency fee agreements attractive because they allow clients to share the risk of litigation with their lawyers. Reply Link Andrew Tucker, Head of Personal Injury at Irwin Mi 14 January 2010 at 16:49 Access to justice for personal injury claimants has never been better. The No Win No Fee system allows successful claimants, whatever their financial circumstances, to recover all their reasonable costs in full, to receive 100% of their compensation, and also to pay nothing if they lose. Some of the Jackson recommendations would require claimants to make a contribution to those costs which would reduce their compensation, in many cases substantially. Reply Link Boris Kremer 14 January 2010 at 17:36 This report is a victory for the big insurers. It is a sad day for the injured individuals, who fight them for compensation. Disturbing reading. Reply Link Julian Summerhayes 14 January 2010 at 17:37 It is still too early to predict what impact these recommendations if enacted will have on the market. The removal of success fees and ATE premiums is worrying but the flip side is that if properly controlled contingencies might offer a fairer solution. Costs still generate too much uncertainty for the client and I am not sure that these recommendations have done much to dispel that. Reply Link Simon Twigden 14 January 2010 at 17:42 If contingency fees are adopted, Lord Jackson’s proposals in this area would represent a revolutionary change in public policy and that has got to be good news for commercial litigants. It would allow us to provide our clients with even better access to justice in complex, high value litigation: a simpler and more transparent regime that incentives lawyers to settle cases early and concludes with an actual result for our clients that is proportionate whatever the outcome. This is precisely what our clients want and, if permitted, we are certainly ready to pioneer the use of these arrangements in the highest courts. Reply Link Anonymous 14 January 2010 at 17:57 I am impartial but I agree with with APIL and Andrew Tucker. As with all such reviews, this had to be seen to be done to appease the dissenters, but the outcome was a predictable one. At best it is anti-competitive, as highlighted by the OFT Reply Link Anonymous 14 January 2010 at 18:29 The extension of contingency fees will create conflicts of interest between solicitor and client. If an agreement exists for, say, 30% of damages and an offer of settlement of £50,000 is made. If there is a reasonable prospect of the client receiving £75,000 at trial, going to trial involves the solicitor doing a lot more work. Therefore although the solicitor stands to gain 30% of the £75,000 he will have to do more work. He may well therefore push the client to settle rather than go to trial. Hence the conflict. Reply Link Daryl L Robinson, F.Inst.L.Ex, APIL Senior Litigat 14 January 2010 at 21:55 The principle of ‘Access to Justice’ is somewhat weakened by the Claimant having to lose a significant percentage of his damages to contingency fees rather than the Defendant paying the success fee. The insurers win. Reply Link Beth King, Marsons Solicitors 15 January 2010 at 09:56 How does returning to the situation in which PI claimants paid success fees and ATE premiums in any way enhance access to justice? While it may make some sense in commercial litigation, as things stand, the vast majority of PI claimants pay nothing, win or lose . All Jackson will achieve is to allow Defendant insurers to continue their current inefficiencies but limit their liabilty to pay the costs the Claimant has to pay in dealing with that. Jackson is attacking the wrong end of the problem – if instead we sort out what is wrong with the system, the costs problem will go away. If the insurers think litigation is too expensive, they should settle sooner and stop making risible offers. And detailed assessment is the way to tackle any claimant lawyers who claim too much. Frankly, I think Jackson has been a tremendous waste of public money and certainly will not benefit litigants with genuine claims or defences. The costs system is not the problem and if it ain’t broke, why fix it? Reply Link Rural bliss 15 January 2010 at 11:27 This is an excellent report. By abolishing referral fees it will rid us of a whole raft of parasites and ambulance chasers. It’s also morally right that a claimant should have some financial cost, otherwise there is no incentive on his lawyers to run the litigation economically. There is no other service which is entirely free, and there is no reason why litigation should be any different. Preventing recovery of success fees and outrageously expensive self-insuring ATE insurance from defendants will also help to prevent what is effectively blackmail by claimants operating under CFA’s. Well done Lord Justice Jackson – let’s hope whichever government’s in power has the balls to implement the recommendations. Reply Link Anonymous 15 January 2010 at 11:30 I never understood the justice of requiring the Defendant to pay the success fee and ATE premium. All the more so since the weaker the case the higher the success fee and premium, leading to the absurdity that a Defendant often has to pay out more in costs for a weak claim. I doubt very much many PI claimants will be materially prejudiced – claimant solicitors and counsel will, however. Reply Link Anonymous 15 January 2010 at 13:05 So in moving forward, Lord Jackson is proposing we adopt the pre-Access to Justice Act method. Moving forward in fact means regressing 10 years. Oh, and of course in 99 referral fees were “banned” then too weren’t they. In a similar vein, perhaps they will also recommend the small claims track limit be reduced back down to £3,000 for liquidated claims….oh, thought not. Reply Link Paul Elder 15 January 2010 at 15:53 Does anyone have any thoughts on how claimant solicitors would obtain new work if these proposals are implemented? Without referrers would they not have to advertise themselves? I thought the Solicitors Practice Rules prohibited that… Reply Link Anonymous 15 January 2010 at 17:28 I just do not understand the APIL argument at all. How can it be a bad thing for the claimant to have to bear the cost of an insurance premium in return for the peace of mind he receives. And if s/he doesn’t, then surely it would be a good thing if s/he has to be subject to the resulting risk? Wouldn’t it be just so much easier if we abandoned loser pays and adopted loser pays only when there’s bad faith together with a properly structured contingency framework? Reply Link James Horsley 15 January 2010 at 18:00 “Rural bliss | 15-Jan-2010 11:27 am” How can you say “There is no other service which is entirely free” – in our society basic human rights services (such as NHS, policing, schools etc. etc.) are in fact free – why should justice not be included? Do you believe justice should be withheld from those unable to pay for something? “Anonymous | 15-Jan-2010 11:30 am” – the defendant only gets to pay the ATE and success fee on “weak cases” if the claimant wins – and in any event calling these “weak cases” is wrong – they are “harder to win” cases. Most claimant solicitors will turn down a case that is too weak – but if a case is hard to win because of its nature or difficult evidence etc. then it is right that it should incur higher fees as the work required is harder and greater. Defendants can always avoid these fees – just don’t injure people. I believe that, if implemented, the proposed changes will seriously disadvantage the poor in our justice system. Most ATE premiums are based on broad categories (and obviously have to be because before a case is concluded things like the actual damages obtained are unknown) – so in many smaller cases a large percentage of the damages may be lost to paying the ATE premium – far more than a 10% rise would recover. These low damages cases might be considered insignificant to rich lawyers – but to the poorer claimants the amounts are important. At the same time LJJ has steered clear of any other changes to the legal costs system that would affect city firms – from where I am sitting it looks all very biased but I am sure he is the toast of the gentlemen’s clubs. Reply Link Anonymous 15 January 2010 at 19:06 These proposed reforms really don’t help anyone – the courts will feel as though they have to rush cases through causing lawyer standards to suffer, borderline cases won’t find representation and law firms will have to lay off vast numbers of their legal execs in a frantic move to cut costs – yet again this government have puppetted a set of poorly thought out proposals for reform that can have no positive effect whatsoever other than earning their freinds in the underwriting industry a few more pounds on their annual profits… Reply Link Anonymous 16 January 2010 at 15:14 This is a daft report, we are going back in time where thr rich can afford to pay and the poor will not. If you get rid of the cmc’s then the solicitors will have to pay out for advertising anyway. There is just no point. the new rta rules will make a diffrence to the system but this report is poor idear to a problem that is not there. Reply Link Anonymous 16 January 2010 at 17:08 Claimant’s have had it easy for too long, APIL and all the claimant firms are up in arms for one reason, they would end up getting less money under these proposals, thats what it comes down too. PI and credit hire litigation are the only areas of law where the claimant doesn’t have to pay anything, they get everything for nothing. If they have to pay something then the fraudsters will be put off making their LVI claims and claiming their whole family were in the car when they weren’t. If there is a genuine claim (as in most Cat PI claims) then the claimant won’t be at a disadvantage having to pay costs as Jackson recommended generals would be increased by 10% to pay the associated costs, it wouldn’t come out of the specials so any care claims and adaptations etc would not be touched so the claimant wouldn’t be at a disadvantage. Some people have complained about insurers not making good offers, that was taken into account in the review they have just chosen not to mention that Jackson recommended that if the claimant beats the defendant’s pt 36 offer then all damages awarded would be increased by 10% and it will ALL go to the claimant, as I mentioned the claimant firms (too many to mention here) only want one thing, money, and this sees them getting less. f they cared about their clients then they would work effectively to settle claims without spiralling costs and keep their client’s interests at heart. Reply Link Stephen Wood, Solicitor, Hoben Johnson Solicitors, 17 January 2010 at 03:41 The report is very pro-Defendants/Defendants’ insurance companies. The abolition of recoverable success fees and ATE insurance premiums from unsuccessful Defendants will certainly deter Claimants in relatively minor Fast-Track value claims from issuing Court proceedings, where liability is disputed. This can only encourage Defendants to deny liability in such cases. Reply Link Anonymous 17 January 2010 at 21:55 The current system has led to a massive compensation culture of no benefit to society. If claims farmers are toast in the future – good news Most of vexatious litigation is minor PI injuries where everyone down the pub is encouraged to have a stiff neck after a minor bump (or in some cases no accident). Scrapping referal fees yes, non recovery of ATE Insurance – yes. Damages to the genuinely injured – yes Nothing to the parasites yes, yes ,yes Reply Link Robert Rocker 17 January 2010 at 22:52 Claimant solicitors who properly risk assess and try to run genuninely viable claims will take issue with the suggestion that the do not run their claims efficiently. Insurers not complying with the protocol is a major factor in costs increase. Also, given that tthe claimant only has cause to seek legal assistance and insurance protection because he/she has been injured by another, why then should the wrongdoer/insurer not have to reimburse his/her necessary legal expenditure? Reply Link Get over it 18 January 2010 at 06:19 Wonderful comments. Like the banking crisis, an industry (claimant PI and their ATE insurers, farmers and funders) shows that any apparently simple deregulation will be ruthlessly exploited for profit to the extent that it becomes absurd. The lamentations here have nothing to do with concerns about access to justice and everything to do with the restrictions to be imposed on thebeneficiaries of a licence to print money. If you had really cared about the claimants, then this would not have happened. I am sure there are exceptions, but they are certainly not the majority. What amazes me is that some of the comments show the sheer scale of the self-delusion. I am sure Sir Fred still protests his innocence. Wait, here come the lobbying companies. Another noble industry. Reply Link john walton 20 January 2010 at 20:04 This will mean PI firms asking for deposits, dispursment fees and investigation costs up front – the poor will suffer the most. Reply Link Steve Vickers 22 January 2010 at 19:08 The report does seem to be a shopping list for the liability insurers and that those who have got their message across best. There seems scant regard to how much damages are going to have to increase which would negate the savings of the liability insurers. If those same insurers and NHSLA properly staffed their claims departments they would save a fortune in the current regime but then claims departments are a cost rather than those people doing the marketing in head office…. It would also be good if the liability insurers charged a premium which reflected the costs of claims and did more in risk assessment cutting down on incidents in the first place rather than spending so much money on lobbying. Wouldn’t it be nice if the law had a period of stability after years of reforms which are then reformed in turn. Reply Link Anonymous 19 April 2011 at 13:34 Im personally glad. Hopefully this will have an impact on the ridiculous costs claimed by personal injury practicioners these days. I’ve seen many cases where costs are claimed at £20k upwards and the claim itself is worth less than 5k. 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