Reaction to Jackson
How have practitioners responded to the Final Report? Counsel rounds up some of the comments made on the NLJ Jackson webcast
David Greene
NLJ Consultant Editor & head of the litigation & dispute resolution team at Edwin Coe LLP. NLJ Jackson webcast participant
“A lot of solicitors get their business from referral fees, agencies and management companies. If they didn’t get that business you would probably find that they would have to go out and advertise and spend the money in that way, so I don’t think it is a straight game in terms of referral fees.
Also, to some extent the before the event (“BTE”) insurance market is based on referral fees and the likelihood is that if you get rid of referral fees you may well see premiums go up on insurance because otherwise insurers are not earning through the referral fees and they will be looking to earn through the premiums, so I don’t think it is a simple picture.
Third party funders are starting to make a noise in commercial litigation. They want the big cases. At the same time solicitors are going to offer contingency fees. So we should expect that there might be a bit of a debate about whether you need third party funders, or will they combine? I think it will be an interesting market to watch if these things come about.”
Simon Butler
Ely Place Chambers
NLJ webcast participant
“The proposals are going to make CFAs unattractive to barristers. One of the attractions in the past for undertaking work on a CFA has been success fees and, of course, it was one of the selling points at the Bar for doing CFA work, you win some you lose some, but you have the benefit of success fees to balance that risk. If success fees cease then it is not going to be very attractive. Solicitors will find it difficult to instruct barristers to act under CFAs under Jackson LJ’s proposals. Solicitors will also need to involve counsel much earlier on in the process so that counsel may be part of the general risk assessment.”
Nicholas Bevan
Bond Pearce LLP & NLJ webcast participant
“Claimant practitioners have greeted Jackson LJ’s recommendations with varying degrees of consternation. The high cost of PI litigation is perceived as unacceptable by Sir Rupert. Costs are to be constrained by sweeping away those practices and assumptions that permitted disproportionate costs and by imposing a radical procedural shake up that includes fixed costs for all fast track claims.”
Jackson: personal injury snapshot
Out
- Recoverability of success fees and after the event (“ATE”) insurance premiums
- The old Advisory Committee on Civil Costs
- The old indemnity principle
- The flexible approach to assessing proportionality introduced by Lownds v Home Office [2002] EWCA Civ 365.
- Standard basis costs in fast track claims with an exit for the more complicated claims
- Referral fees to be banned
- The BAA v Carver [2008] EWCA Civ 412 approach to deciding whether an offer was more advantageous
In
- Introduction of a new fixed costs regime for all fast track claims up to £25,000
- An increase in general damages of 10 per cent to offset the non recoverability of success fees
- A one way cost shifting rule that protects an unsuccessful claimant from liability for the opponent’s costs
- Beefing up the Part 36 penalties so it is effective in a fixed costs environment by awarding a claimant the benefit of a new penalty of 10 per cent of the total claim value
- Protecting claimants’ damages from excessive success fees by imposing a cap valued at 25 per cent of general damages
- A new Costs Council to monitor the fixed costs and review the Guideline Hourly Rates
- Recommendation for a streamlined process for low value personal injury claims
