On 14 January 2010, a review of Civil Litigation Costs by Lord Justice Jackson was published.
If implemented, the recommendations proposed by the review would have far reaching effects for Claimants in many areas of the law, not least the innocent who fall victim to personal injury and clinical negligence at the hands of others.
The main points arising from the review, in respect of personal injury claims are as follows:
- All personal injury claims up to a value of £25,000 would be subject to a scale of fixed costs which would provide fairness and certainty to clients
- The success fee claimed by solicitors on winning a case would become the burden of the Claimant and no longer the losing Defendant. The innocent Claimant could therefore lose a slice of his damages for the privilege of winning
- To offset this loss, damages in civil claims would be increased by 10%
- Success fees charged by firms would be capped at 25% of the damages awarded. Previously the success fee could be as large as 100% of costs where the claim went to trial
- Referral fees paid by law firms to claims companies would be abolished. No longer will it be possible for a lawyer to ‘buy’ your claim
- The long-standing principle that the ‘loser pays’ would no longer apply. Where a Claimant is unsuccessful in his claim he will not be required to pay the Defendant’s costs, unless he is deemed to have behaved unreasonably
If the recommendations of Lord Justice Jackson are legislated, the change would be radical. Sally-Ann Robinson, Partner and Head of the Claimant Personal Injury and Clinical Negligence department at Lincoln based Langleys, acknowledges that the reform would be ‘staggering’.
‘On the positive side’, she comments, ‘there would be an increase in the damages for victims of Personal Injury and Clinical Negligence. But would this be enough to compensate for the shift in responsibility to the Claimant for meeting their lawyer’s success fee?’
Most will be happy that the proposals have the potential to put an end to unwelcome cold calling, ‘Have you had an accident in the last three years?’ and being stopped in the street by claims companies. However, there will no longer be assurance that when you approach one law firm for help you will be charged the same for that advice as the firm down the road.
The report is moving towards a more American style system where lawyers act on a contingency fee basis and receive a percentage of the client’s damages for their fees.
It is difficult to predict the overall effect that such proposals would have on civil litigation and at this stage, it is not clear when, or even if the proposals will be implemented.
Much will depend upon whether the Government and the opposition parties see the reduction in lawyers’ fees in civil litigation as an election issue.