Government gives green light to Jackson plan

The Ministry of Justice has launched a consultation paper formally backing Lord Justice Jackson’s proposals for civil litigation funding reform.

The proposals, set out in Lord Jackson’s report in January, include abolishing recoverability of success fees and after-the-event insurance premiums so that claimants have an interest in controlling their costs. General damages payments would be increased by ten per cent to balance the impact of this, and the increase would apply whether or not the case proceeded to court.

Contingency fees, under which lawyers take a proportion of the claimant’s damages as fees, would be permitted. Personal injury claimants would be protected from paying a winning defendant’s costs through qualified one-way costs shifting. The prescribed recoverable rate for litigants in person, typically individuals appearing before the small claims court, would  rise from £9.25 to £20.

The MoJ launched the paper, Proposals for Reform of Civil Litigation Funding and Costs in England and Wales, alongside its proposals for legal aid reforms this week.

In their foreword, the Lord Chancellor Ken Clarke and Justice Minister Jonathan Djanogly said costs in civil cases had “frequently become disproportionate and unaffordable to many individual litigants and businesses—particularly small businesses”.

The proposals were underpinned by four principles, they said, “that necessary claims can be brought; that reasonable claims should be settled as early as possible; that unnecessary or frivolous claims are deterred; and that as a result costs overall become more proportionate”.

However, the Association of Personal Injury Lawyers (APIL) warned the proposals would “hit the weakest the hardest”.

APIL president, Muiris Lyons said: “No win, no fee has helped provide access to justice for injured people who cannot otherwise afford it.

“The proposal to increase damages to offset the effect of this move is a white elephant for two reasons: first, damages are now too low in any event, as, in most categories, they have never been increased in line with Law Commission recommendations; and second, the proposed increase will not always cover the costs to be borne by the injured person in any event, leaving him with a shortfall in his damages.

“Those who will be affected most are likely to be people suffering serious or catastrophic injury, where the damages involved are often very high.”