Success fees would be capped at 25 per cent of damages, and awards of general damages for pain, suffering and loss of amenity would be increased by ten per cent. This, the Report states, would leave “successful claimants no worse off than they are under the current regime.”
Contingency fee agreements, under which lawyers are only paid if the client’s claim is successful, should be introduced. They are currently illegal in England and Wales, but are popular in the US.
Jackson LJ says, in his Report, “The regime of ATE insurance with recoverable premiums is ... an extremely expensive form of one way costs shifting ... It would be substantially cheaper for defendants to bear their own costs in every case, whether won or lost, than to pay out ATE insurance premiums in those cases which they lose.”
Michael Todd QC, who has led the Bar Council’s response to the Jackson review, said: “Concerns have been expressed about CFAs but we must not throw the baby out with the bathwater.
“CFAs can promote, and in the past, in the absence of viable alternatives, have promoted, access to justice, but they must not be allowed to bring the system into disrepute. Consideration should properly be given to limits on fee uplifts, if that will achieve a better balance between access to justice for deserving claimants, and the net cost to the taxpayer.
“Equally, if CFAs are to play a lesser role, or be otherwise reformed, alternatives, such as the proposal from Guy Mansfield QC for Contingent Legal Aid Funds, need to be considered.”
Guy Mansfield QC has been leading a Bar Council policy group looking into the idea of a Contingent Legal Aid Fund (“CLAF”). Under the CLAF, its administrators agree to fund the claim if the likely chances of success and damages justify support. In return, the successful client pays a percentage of the damages recovered back to the CLAF. The costs of the successful case are recovered in the ordinary way from the defendant.
Other recommendations include scrapping referral fees—fees paid to organisations that “sell” damages claims to lawyers—in personal injury cases and introducing fixed costs for fast-track civil cases (those worth a value of £25,000 or less) to ensure certainty of legal costs.
Jackson LJ recommends promoting the use of before-the-event (“BTE”) insurance so that the general public are encouraged to take out legal expenses insurance, for example, as part of their household insurance. He suggests that a Costs Council be established to annually review fixed costs and hourly lawyer rates to make sure they are fair.
The Jackson Report requires the support of the Ministry of Justice before its recommendations can be implemented.
The Master of the Rolls, Lord Neuberger, said: “The time for discussion and debate is over: it is now time for action. I hope that the Ministry of Justice will give these proposals the same enthusiastic and practical support which the judges will give them.”