Access to justice for defendants
On 14 January 2010 Sir Rupert Jackson published his long anticipated report into costs, following an enquiry that has lasted 12 months, and which follows his 1000 page Preliminary Report that was published last May.
The report is wide in breadth, covering the full spectrum of litigation and contains 557 pages. Such a piece of work requires detailed analysis and we will be providing a comprehensive feedback document in the near future. This summary pulls out the key themes and recommendations.
The Jackson Review: an overview
Dubbed by His Honour Michael Cook as providing “Access to justice for defendants” there is little doubt that the “winners” are defendants, liability insurers and public authorities. Indeed it is the likely savings to the public purse in terms of reduced costs paid by Local Authorities and the NHSLA and the likely savings in court costs by reduced detailed assessments being required, coupled with the overwhelming support of the current Lord Chief Justice and the Master of the Rolls that is likely to give the recommendations considerable impetus and credibility. The proposals are radical, thoughtful and politically sensitive.
Undoubtedly if the majority of the proposals are implemented then the overall cost of litigation would be dramatically reduced.
The key proposals are:
- The abolition of the inter partes recovery of success fees and ATE premiums, thereby reverting to the regime in place before the CPR was introduced in 1999.
- To partially compensate for the potential deduction of these additional liabilities from damages an increase of 10% in general damages (in PI cases) is proposed.
- A ban on referral fees - something which has been discussed for years and whilst on the face of it is clearly desirable it may prove difficult, if not impossible to implement and enforce. In addition with LEI funders often relying on the receipt of referral fees for income it may lead to higher ATE premiums.
- One way costs shifting – a highly controversial concept, is to be considered in a “qualified” way whereby claimants in certain types of case would face no risk of being responsible for a defendant's costs.
- The abrogation of the indemnity principle, on the basis that its existence has been at the heart of the “costs war”.
- Fast Track Fixed Costs – initially for PI cases and ultimately for all fast track cases. This will be formulated following the creation of a Costs Council. Proposed mediation as to levels of fixed fees has failed so fees will need to be imposed. Fixed costs may well reduce costs and provide certainty however they may well open up a whole new “Pandora’s Box” as challenges as to conduct would be possible as claimant solicitors rush to reach the stage that maximizes their fees.
- Support was given to the current MOJ reforms to the motor claims process and it is suggested that the current small claims track limit should remain.
- Reforms to Part 36 to encourage defendants to accept sensible offers. It is proposed that there be a 10% increase in damages where a defendant fails to accept a claimant’s Part 36 offer which is not subsequently beaten.
- Contingency fees (where the solicitor takes a share of the claimant’s damages) are to be legalised, but with the inter partes recovery of costs limited to what would normally be recovered.
- Reforms to case management with greater emphasis on budgeting and costs management.
- Proposed reforms to pre-action protocols and the introduction of “hot tubbing” of experts at trial.
Impact
The costs arena now faces an uncertain future, with the only certainty that change of some kind is going to come. These changes will not be introduced over night, may be staggered and some may take years to implement due to the need to make primary legislation but it is clear that significant reforms are probably now inevitable.
Hill Dickinson’s in-house costs team are experts in the field of legal costs and would be pleased to discuss how these changes will affect you. For more detail please contact head of costs, Paul Edwards:
