Jackson proposes sweeping reforms to cut litigation costs

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  • 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?

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  • 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.

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  • 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.

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  • 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.

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  • 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.

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  • 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.

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  • 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.

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  • 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.

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  • 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

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  • 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.

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  • 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.

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  • 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?

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  • 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.

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  • 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.

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  • 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.

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  • 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...

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  • 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?

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  • "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.

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  • 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...

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  • 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.

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