Response to the Jackson review

Maria Penny (Personal Injury Solicitor)

The Jackson review and report is not, as yet, law but the report highlights several areas likely to be subjected to reform.

The main areas of concern for a Claimant are the suggested ban on recoverability of success fees from the opponent. Under the current scheme when a party enters in to a conditional fee (or no-win no-fee) agreement and succeeds in their claim the success fee or uplift is added on to the costs claimed from the opponent. The new proposals envisage the success fee being recovered from the Claimant. This would mean that the Claimant would lose part of their damages to pay the success fee, which it is suggested should be capped to no more than 25%.

These proposals whilst on the face of it may not seem too radical do, in my view, leave Claimants exposed to costs risk unnecessarily. The idea of deducting costs from damages is akin to the contingency fee agreement system. The recoverability of success fees from opponents was introduced to ensure those with limited financial means could pursue an action without costs risk and to essentially prevent claims being defended without merit or on matters of principle. By removing this risk from the Defendants there could be a sharp rise in cases being defended rather than settled which essentially goes against the principles of the Civil Procedure Rules and the pre-action protocols. There would be no real costs risk to the Defendant save for their own costs which is the position in any case.

In an attempt to lesson the blow to Claimants in personal injury claims it is suggested that general damages figures be increased by 10% to account for the success fee risk. I am not convinced this would resolve the issue or assist the Claimant as it is often difficult to agree damages at an appropriate figure with offers usually coming in several hundred pounds below what a claim is worth, leaving the Claimant with the difficult choice of whether to issue proceedings, thereby increasing costs in any event. Recent case law regarding part 36 offers and whether a Claimant has acted reasonably in rejecting the same and proceeding to a final hearing or issuing proceedings are of real concern as essentially, a Claimant can be held to have acted unreasonably in rejecting an offer then recovering a sum a few hundred pounds above that offer.

The proposals refer to fixed fees across the board for all Fast Track cases and does not limit reference to Road Traffic Accidents. It is difficult to see how realistically fixed costs can be rolled out across the board whilst still ensuring it is viable for solicitors to deal with such claims and still effectively stay afloat and make a profit. Claims may be ‘cherry picked’ by solicitors leaving those with claims involving risk exposed and possibly without legal representation. It is all too easy to look at charts and figures across the board and say that costs are too high and refer endlessly to proportionality as being key but little emphasis is placed on the conduct of parties which in most cases is the sole reason costs escalate, whether for example, due to failure to respond in good time or disclose documentation. Also the new fixed fee procedure for RTA work does not come in to force until April 2010 therefore it is perhaps a little premature to suggest fixed fees for all Fast Track cases.

There is also the suggestion to abrogate After The Event insurance policies. An alternative method of costs shifting is referred to for those who merit protection against adverse costs orders, i.e. those of limited means. Essentially the Claimant, if they lose, will only make a nominal contribution towards the Defendant’s legal costs but this again leaves the Claimant unnecessarily exposed. I do not think this is the answer and note that in any event the Court has the power to limit costs recovery and use the various rules within the CPR to do so. The level of insurance policies is open to challenge in any event therefore I am not convinced simply abolishing them is the way forward, certainly not, if as his report suggest, access to justice is the driving force behind the review.

With the election looming it will be interesting to see whether, and if so when, the recommendations will be implemented and ultimately the overall effect on access to justice.

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