MOJ Consults on Jackson LJ’s Recommendations and Legal Aid Reforms
17 November 2010
As expected following Justice Secretary Ken Clarke's comments last month, the Ministry of Justice published a consultation paper on Monday 15 November 2010 regarding the implementation of a number of the recommendations contained in Jackson LJ's review of civil litigation costs. This represents a significant step forward in the government's proposals to reform the civil litigation system, particularly regarding CFA success fees and ATE insurance premiums, the effect of Part 36 offers and one way cost shifting.
The consultation is available here and invites responses on the following issues:
- Whether the recoverability of CFA success fees should be abolished or limited and whether the maximum success fee that can be charged should be reduced;
- Whether the recoverability of ATE insurance premiums should be abolished or limited;
- Whether general damages for civil wrongs should be increased by 10% to compensate for the above two reforms;
- Whether an additional payment, equivalent to 10% of general damages, should be introduced if a claimant obtains a judgment at least as advantageous as his Part 36 offer;
- Whether the decision in Carver v BAA should be reversed;
- Whether cost sanctions in relation to Part 36 offers should take into account a 10% margin for negotiation, i.e. if the claimant fails to get more than 10% above the defendant's offer, it would only be awarded costs up to the date of the offer, on the basis that it was unreasonable for the claimant to incur additional costs by pursuing its case to trial;
- Whether qualified one way cost shifting, whereby the claimant will not be ordered to pay costs above an amount "which is a reasonable one for him to pay having regard to all the circumstances", should be introduced and whether this should only apply to personal injury claims or to other areas as recommended by Jackson LJ (which included professional negligence);
- Whether there should be a presumption in personal injury claims that the claimant is not able to pay the defendants' costs unless the court orders that the parties' financial circumstances are such that the claimant should pay all or a fixed amount of the defendant's costs if the claim fails;
- Whether contingency fees, or Damage Based Agreements, should be permitted and if so how they should be regulated and whether they should be capped at 25 per cent;
- Whether the rate recoverable for litigants in person should be increased.
The consultation also reports on the status of Jackson LJ's other recommendations, for example, in relation to costs and case management, it reveals that a Judicial Steering group is currently considering whether to further implement the suggested proposals.
On the same day, a separate consultation was launched regarding proposals to cut the legal aid system by £350 million over the next parliamentary term. It is hoped that this would reduce the number of civil cases by 547,000. As part of the proposals, legal aid would no longer be available for divorce and child residence cases unless special circumstances are involved, such as domestic violence. In order to make up the shortfall that will result from the cuts the consultation also proposes the introduction of a Supplementary Legal Aid Scheme, whereby a percentage of the funds recovered by successful legal aid funded claimants is recouped and used to fund the legal aid costs of other cases. The consultation paper is available here.
Those with an interest in civil litigation should ensure they pay close attention to these proposed developments; the deadline for submitting responses to the consultations is 14 February 2011. It is likely that there will be further developments in 2011, as Mr Clarke stated that these consultations are part of a wider programme of reform, which will include the publication of proposals next year "for simplifying and reforming the procedures used in civil courts, making greater use of mediation to deliver the services clients want in a way that suits their needs."