The Jackson Report - Review of Civil Litigation Costs

02 February 2010

In November 2008, Lord Clarke (the then Master of the Rolls) commissioned Lord Justice Jackson to carry out a review of the costs of civil litigation. Lord Justice Jackson consulted widely and published a preliminary report in May 2009 followed on 14 January 2010, by his final report entitled the Review of Civil Litigation Costs.

You can access the full report at http://www.judiciary.gov.uk/about_judiciary/cost-review/index.htm. There is a helpful Executive Summary at page xvi and a review of the Recommendations (including details of those requiring primary legislation) at page 463.

Major recommendations

• success fees in Conditional Fee Agreements and After the Event (ATE) insurance premiums will no longer be recoverable from the other side
• the common law indemnity principle should be scrapped
• before the Event (BTE) insurance should be encouraged for SMEs and householders
• third party funding to be voluntarily regulated. Third party funders potentially liable for the full amount of adverse costs
• contingency fees to be permitted. But only conventional costs will be recoverable from the other side
• recoverable costs in Fast Track cases (up to £25,000) should be fixed (initially for personal injury and certain types of cases but with a £12,000 pre-trial costs limit for other cases)
• the test of proportionality should be applied globally and defined more clearly in the Civil Procedure Rules
• personal injury - Referral fees for personal injury claims should be banned. Regime of qualified one way costs shifting to be introduced. Uniform calibration of all software systems used in assessment of damages for pain, suffering and loss of amenity up to £10,000
• a special streamlined procedure for business disputes of lower value should be considered. A guide for "small business disputes" should be prepared so that business people can deal with disputes themselves if they wish, without the assistance of lawyers (either by mediation or on the small claims track)
• more docketing of cases to specific judges who will be responsible for managing the whole court procedure.

The recommendations have yet to be implemented and although some provisions could be implemented through the Civil Procedure Rules Committee, the key provisions preventing recovery of success fees and ATE insurance premiums will require primary legislation. Whether there will be the political will in an election year to introduce the changes remains to be seen.

The impact of the report is therefore unlikely to be apparent, until it is clear which recommendations will be implemented and when. Lord Justice Jackson is keen that his recommendations should create greater access to justice. It is not clear to us that this will be the case, particularly if the recommendations are implemented on a piecemeal basis. Our initial view is that those who are most likely to benefit from the recommendations are defendants and their insurers.

This is a brief overview of the key recommendations. If you would like further information about any aspect of the report, please contact Alyson Tanner at alyson.tanner@burges-salmon.com or on 0117 902 2759.