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The Ministry of Justice (MoJ) has backed the sweeping reforms of the civil litigation system that were put forward by Lord Justice Jackson.
Having chosen a number of Jackson LJ recommendations that require primary legislation, the Government today launched a consultation paper on the proposal of a 10 per cent cap on success fees in conditional fee arrangements (CFA). Justice Secretary Ken Clarke said the Government is also suggesting that the recoverability of uplift fees and after-the-event premiums be scrapped.
The MoJ document stated: “The fact remains that the costs of the existing regime are unsustainably high, given their impact on some public bodies.
“Of course the current arrangements are working well for claimants’ access to justice, but they impact disproportionately on defendants’ access to justice.”
There are proposals to introduce contingency fees - otherwise known as damages based agreements - with the fee capped at 25 per cent. The recommendations include a 10 per cent increase in damages and the introductions of one-way costs shifting in personal injury cases.
However, Jackson’s proposal to ban referral fees will be a decision left to the Legal Services Board, the MoJ said.
The consultation was launched in tandem with proposals to radically overhaul the legal aid system, implementing £350m in cuts over the next parliamentary term. The move will see applicability for legal aid reduced dramatically, having a direct impact on the private market.
Introducing the proposal Justice Minister Jonathan Djanogly said: “Alongside our ambitious proposals for reforming the legal aid system, we’ve also set out important plans to reform funding arrangements in the civil justice system, which will support wider Government efforts to help businesses and public bodies fearful of costly litigation.
“These are difficult issues which have been grappled with for some time, as all who are familiar with this area of law know. But I believe that today’s consultation marks the way forward.
“One of our key proposals is reforming the current ’no win-no fee’ regime. We want to reduce overall costs, ensure claimants have a financial interest in controlling legal costs incurred on their behalf and deter avoidable, unnecessary or unmeritorious cases.”
Jackson’s review of civil litigation costs was launched in January (18 January 2010).
The Government’s consultation will close in February.