Jackson-style CFAs plan

Extensive plans to reform conditional fee agreements (CFAs) will be announced by the Ministry of Justice in the autumn with a view to making “significant cost savings”.

Announcing the consultation in Parliament this week, justice minister Jonathan Djanogly said the consultation would look at implementing Lord Justice Jackson’s review of civil litigation funding, and would focus on CFAs. He said the government was “taking these proposals forward as a matter of priority”.

“CFAs have played a role in giving access to justice to a range of people,” Djanogly said.

“However, high costs under the existing arrangements have now become a serious concern, particularly in clinical negligence cases against the NHS Litigation Authority and in defamation proceedings.”

The Jackson Review recommended introducing contingency fees, also known as damages-based agreements, for litigation. They are often used in employment tribunals but are not permitted in litigation before the courts.
Jackson proposed abolishing the recoverability of success fees and after-the-event insurance premiums for CFAs—a move that would require primary legislation. This would oblige successful claimants to pay their own lawyer’s success fee.

David Greene, partner at Edwin Coe LLP and NLJ consultant editor, says: “The statement from the minister suggests that the aim of the government is primarily to cut the cost of litigation to the NHS and local authorities.”

Greene believes that impact assessment to measure the effect of changes should accompany the consultation and that the “headline grabbing” concept of cutting litigation costs may hold sway with the government.

“Lord Justice Jackson’s report published in January this year was largely aimed at the personal injury market,” he says. “It received mixed reviews; unsurprisingly with APIL [the Association of Personal Injury Lawyers] and claimants lawyers suggesting it will cut access to justice and FOIL [the Forum of Insurance Lawyers] and insurers suggesting it will improve it for defendants and cut their costs.

“At the same time Lord Young’s Claims Standards Council has launched a review of personal injury claims, with public events to be held from October.”
Greene adds that August could offer some respite because, for both sides of the PI market it is likely to be “all hands on deck” for the Autumn. (For more on personal injury litigation & costs see p 1061.)