Sir Rupert Jackson, a senior judge at the Court of Appeal, was asked by the Master of the Rolls, Sir Anthony Clarke to carry out a review into civil costs. The review commenced at the start of 2009 and was presented to the Lord Chancellor, Jack Straw in January 2010.
Sir Rupert Jackson, a senior judge at the Court of Appeal, was asked by the Master of the Rolls, Sir Anthony Clarke to carry out a review into civil costs. The review commenced at the start of 2009 and was presented to the Lord Chancellor, Jack Straw in January 2010.
Here we provide you with a guide to the Jackson reforms in relation to injury claims and how they are likely to have an impact on you.
“In some areas of civil litigation costs are disproportionate and impede access to justice. I, therefore, propose a coherent package of interlocking reforms, designed to control costs and promote access to justice.” Sir Rupert Jackson.
Aim
Lord Justice Jackson was asked to prepare a report reviewing civil litigation costs in the context of the effect of costs on access to justice. The report was commissioned under the last Labour government and was presented to the then Lord Chancellor Jack Straw in January 2010, however, most of the recommendations from Jackson’s report came in following the new coalition government which came to office in May 2010.
In order for Lord Justice Jackson’s recommendations to be implemented, there had to be a change in the law. As such the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) was passed in order for the government to implement the planned changes to Justice in England and Wales.
What Are The Reforms?
In total Sir Rupert has made several major recommendations to the Government. Of these reforms, the government accepted the majority. The main recommendations from the report are:
Ban Referral Fees
Ban referral fees being paid and received – for example, if you have a car accident and you take your car the garage, the garage owner cannot sell your details to a personal injury specialist where he would have received commission. Jackson writes: “I recommend that lawyers should not be permitted to pay referral fees in respect of personal injury cases.”
Conditional Fee Agreements
CFAs have also changed. Previously the ATE premium and the success fee were able to be recovered from an unsuccessful defendant but since 1st April 2013 the new rule changes mean that the success fee will be payable from the winning party rather than from the losing party.
The Jackson report is a well-reasoned, cogent document, but Jackson doesn’t refer to the portal at any point. Yet the Jackson report has somehow been taken as a need to expand the portal, even though he doesn’t even talk about it.
Jackson recommended that there should be a return to the position prior to 2000 when CFAs were permitted but success fees were not allowed to be recovered. Success fees which have arisen out of personal injury cases are to be capped at 25% of the winning lawyer’s costs.
DBA’s
DBAs / Contingency Fees: were rolled out from April 2013 and used in civil litigation. Jackson recommended that lawyers should be able to enter into contingency fee agreements with clients as long as “the unsuccessful party if ordered to pay the successful party’s costs, is only required to pay an amount for costs reflecting what would be a conventional amount, with any difference to be borne by the successful party” and “the terms on which contingency fee agreements may be entered into are regulated, to safeguard the interests of clients.”
After The Event Insurance/ Qualified One Way Shifting
ATE insurance/QOCS: taken out after 1st April 2013 are no longer be recoverable and a new one-way costs shifting scheme has been introduced whereby a claimant will no longer be required to pay the defendant’s legal costs if the claim is unsuccessful, however, the defendant will be required to pay the claimant’s legal costs if the claimant’s claim is successful.
Before The Event Insurance
BTE insurance enables drivers to purchase the insurance before they have been involved in a road traffic collision and plan ahead, in case they are ever involved in an RTA. It is cheaper than ATE insurance and is able to be added on to a driver’s home and car insurance policy. The government are trying to promote BTE and according to the MoJ “BTE insurance can be and should continue to be used as an alternative to ATE insurance (see below) as a means of covering the risk of having to pay the opponent’s legal costs.”
Increase In General Damages
Increase in general damages: By 10% where there is “pain, suffering and loss of amenity.” But the amount which lawyers can claim for success fees is capped at 25% of the damages.
Part 36
Part 36: Jackson states that Part 36 doesn’t go far enough in “incentivising” parties to make settlement offers. Jackson recommends that “where a defendant fails to beat a claimant’s offer, the claimant’s recovery should be enhanced by 10%.”
Fixed Costs
Fixed costs: LJJ recommended in his report that costs recoverable in PI cases are fixed. He recommends that if the costs are fixed, a new costs council should review the costs regularly.
Reaction to the Recommendations:
There has been mixed reaction to the Jackson recommendations, they have caused divisions within the profession. The general view from the Law Society and the Bar Council is that certain areas of the recommendations are going to be particularly unfair and deny people access to justice.
Some legal commentators and politicians have argued that Britain is heading in the same direction as the United States and turning into a country obsessed with a compensation culture, but whilst some of the Jackson reforms may be good for the law industry, there are certain aspects such as abolishing referral fees and limiting ATE insurance that continue to divide the profession.
Commenting on the Jackson report, Bott’s Senior Partner David Bott who has also served as President of the Association of Personal Injury Lawyers (APIL) and served on the working party during the Jackson review, said that “The Jackson report is a well-reasoned, cogent document, but Jackson doesn’t refer to the portal at any point. Yet the Jackson report has somehow been taken as a need to expand the portal, even though he doesn’t even talk about it.”
The government’s claim that personal injury claims are rising and that the UK is the “whiplash capital of the world” are untrue and the government’s own statistics prove that this statement is factually incorrect. The number of claims for whiplash for example has decreased to the lowest levels since 2008 with a reduction of 60,000 whiplash claims between 2011 and 2013. (APIL)
The introduction of no win, no fee in 1999 meant that there was pressure on defendants to settle claims out of court to save time and legal costs. Lord Dyson who is the Master of the Rolls said that he could “easily see how a compensation culture could arise” and gave his support to Lord Justice Jackson’s recommendations.