Plans for Civil Court Costs Overhaul

05 February 2010, filed under Legal Advice

A shake-up of the costs of civil court cases in England and Wales may be imminent under proposals made by a senior judge.  Lord Justice Jackson has reviewed the costs of civil litigation in recognition of the expense of bringing or defending a case that is simply too much for many individuals and small businesses to afford to pay.

The purpose of the review was to formally acknowledge the need to revamp the civil litigation process to make it more accessible to the general public and to award victims with better financial compensation.

Lord Justice Jackson has closely examined privacy, personal injury and defamation cases, where winning parties frequently recover their costs from the losing party, as well as compensation. Also, Conditional Fee Agreements, known as ‘no win, no fee’ and After the Event insurance are being abused by claimants trying to protect themselves against the potential costs of losing their case. Such claimants would not be able to afford to bring a claim without using Conditional Fee Agreements; however these schemes often result in the claimant losing an extra large portion of their compensation to their lawyers, which more often than not comes to more than the lawyer’s regular fees.

The costs of civil litigations are resulting in many people being left unable to obtain justice as the system is letting them down because it is simply too expensive. Originally the NHS was against ‘no win, no fee’ legal representation because they felt that this had caused an increase in the number of people claiming and resulted in the NHS paying out £300 million in damages last year. However, the NHS Counter Fraud Service of England and Wales has had to embrace Conditional Fee Agreements after finalising a complex deal with a leading law firm in England in order to be able to afford to recoup money lost to fraud. It seems that without Conditional Fee Agreements civil litigation may be a less accessible system than it is today.

Lord Justice Jackson has proposed that success fees and After the Event insurance premiums cannot be recovered from unsuccessful opponents in civil litigation. These proposals are likely to have the greatest impact in personal injury cases where Conditional Fee Agreements are used more than in any other type of litigation. Further to this, he has stated that claimants should bear their success fees to their own lawyers out of compensation they are rewarded and all payments of success fees should be capped at 25% of the total award of compensation. In order to maintain a level of fairness to the general public and small businesses, Lord Justice Jackson has further suggested that there should be a 10% rise in the costs of all other damages across the legal spectrum.

This general proposal of cost shifting would mean a change to the established system of the loser paying the winner’s legal costs, which would result in a potentially greater legal system for the general public that is more accessible and cost-effective.