Access all areas

It is clear from Sir Rupert Jackson’s final report that access to justice has been at the forefront of his mind when reshaping the litigation landscape. The balance is that access must be both for claimants with valid claims and for defendants with valid defences. That is the public interest focus that lies at the heart of the whole report, cutting through the many pleas of vested interests.

Thus the decision to recommend that recovery of success fees and after the event (ATE) insurance premiums should cease to be recoverable is taken in the full knowledge that there must be some acceptable alternative (NLJ, 26 February 2010, p 294) Sir Rupert has settled on “qualified one-way costs shifting”, which would ensure protection for the vast majority of claimants who currently use ATE from any exposure to opponents’ costs, save where the claimant fails to beat a defendant’s Pt 36 offer.

There will still be a place for ATE insurance, but as a genuine purchase for purposes of risk transfer or risk sharing (probably more in commercial litigation), where the litigant sees the price of the product as one worth paying. Products will have to compete on price as well as on service, as in any open market. For those providers with a long-term view of legal expenses insurance, there should be little to fear.

There is no doubt that under these recommendations, there should be a resurgence of before the event (BTE) legal expenses insurance. In a return to the dynamics of the market before 2000, there is an incentive to buy and sell BTE cover as a prudent provision against future risk: the traditional insurance model.

Sir Rupert stops short of recommending compulsory BTE, say for all motorists, but he certainly sees greater use of BTE as important, reflecting his commentary on the German system (see Preliminary Report Ch 55). However his proposals to ban referral fees will mean that BTE cover will have to be priced more commercially and it may no longer be sold just as an add-on to other products. These are not significant hurdles: the insurance market has a tradition of providing for such changes and will do so this time.

Contingency fees

There has already been a good deal written about the recommendation to introduce contingency fees as an alternative means of funding. Some of those considering this concept during the consultation period were rightly concerned about the problems of running a pure contingency fee model alongside the existing regime of conditional fee agreements (CFAs). Others feared their introduction would herald a US style approach to litigation.

Sir Rupert’s proposals are cautious, although he makes it plain that the use of contingency fees is not a major change, simply a logical extension of the decision 15 years ago to introduce CFAs, which are simply another form of contingent funding. One of the reasons for recommending that success fees should cease to be recoverable was that no other jurisdiction in the world allowed the terms agreed between lawyer and client to influence the costs that could be recovered from the losing party, so contingency fees should be no different. The model adopted is akin to that in Ontario, with the costs between the parties assessed on the standard basis of work done and the contingency element purely an issue between client and lawyer.

There is one other important safeguard, which is the requirement for independent advice on the use of contingency fees. It is tempting to see this as “over-lawyering” and creating a new layer of cost, but what it will in fact ensure is that the funding option chosen is in the best interests of the client, not of the lawyer or of some intermediary. No one examining the conduct and funding of litigation over the last 10 years should be in any doubt as to the need for that sort of protection.

Third party funding

The report acknowledges the role that can be played by third party funders. The recommendations aim at fairness: if a funder seeks to make a profit from involvement in the litigation, then they should face full exposure to the risks of paying opponents’ costs as well.

Where now?

None of this is a move towards US style litigation. The roots of Sir Rupert’s proposals come from systems in Europe and the Commonwealth, which reflects where our system should be based.

Overall, although some of the recommendations will require primary legislation, practitioners ignore this report at their peril. There has been a strong message from the senior judiciary that they will ensure that measures are taken to implement these proposals as fully as can be achieved. The bulk of the very detailed recommendations will not need to wait for Parliamentary time. Anecdotally one or two County Courts are already taking steps to apply some of the ideas on fast track costs.

As the Master of the Rolls said when the final report was launched, the time for discussion and debate is over. Sir Rupert has now accepted a role in spearheading the implementation of his own plans. Given his track record so far, in delivering both the preliminary report and final report on time and in comprehensive detail, no one should doubt his ability to deliver.

Andrew Parker is head of strategic litigation at national commercial law Firm Beachcroft LLP and one of Lord Justice Jackson’s assessors.

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