Jackson proposes sweeping reforms to cut litigation costs

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.”