Significant reforms should be introduced to prevent litigation costs from spiralling, Lord Justice Jackson announced today as he unveiled his long-awaited review into the cost of civil litigation.
Jackson LJ, who was commissioned by the former Master of the Rolls Sir Anthony Clarke to conduct a year-long review into rising civil litigation costs, has outlined a series of core proposals aimed at increasing competition in the sector and thereby reducing fees.
The key recommendations include:
- Success fees and after-the-event insurance premiums should cease to be recoverable in conditional fee arrangements (CFAs)
- Success fees in CFAs should be capped at 25 per cent of damages and awards of general damages raised by 10 per cent
- The use of referral fees should be banned
- A contingency fee model should be introduced, but these must be properly regulated and an independent lawyer should advise on what structure it will take
- Judges, litigators and barristers should receive training on costs budgeting
- A standard costs management procedure should be established
- Increased judicial responsibility for controlling costs
The reforms will hit personal injury practitioners hard, but could also be applied to clinical negligence, judicial review and defamation claims.
“Access to justice is important not only for claimants who have valid claims, but also for defendants who have a valid defence,” Jackson LJ said.
Big ticket litigation will be largely unaffected, although Jackson LJ proposed that disclosure in large commercial cases should be conducted on a ‘menu’ basis.
According to CMS Cameron McKenna partner Guy Pendell the menu proposal is to be “largely welcomed”, but he cautioned: “This may encourage satellite litigation in individual cases.”
Many of the recommendations will need the support of primary legislation before they can be actioned, including the scrapping of the recoverability rules.
Lord Chief Justice Lord Judge and Master of the Rolls Lord Neuberger have given their full backing to the Jackson report.
Lord Judge LCJ commented: “If these recommendations are adopted as a whole there will be welcome improvement on costs and access to justice.”
Readers' comments (28)
Anonymous | 16-Jan-2010 5:08 pm
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.
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Stephen Wood, Solicitor, Hoben Johnson Solicitors, | 17-Jan-2010 3:41 am
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.
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Anonymous | 17-Jan-2010 9:55 pm
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
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Robert Rocker | 17-Jan-2010 10:52 pm
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?
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Get over it | 18-Jan-2010 6:19 am
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.
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john walton | 20-Jan-2010 8:04 pm
This will mean PI firms asking for deposits, dispursment fees and investigation costs up front - the poor will suffer the most.
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Steve Vickers | 22-Jan-2010 7:08 pm
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.
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Anonymous | 19-Apr-2011 1:34 pm
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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