Reforms to civil litigation funding and costs were introduced in April 2013 amid great speculation about what their lasting impact would be. Wide-ranging and far-reaching, the effects the reforms have had upon personal injury litigation will briefly be assessed in this blog. The changes were implemented partly as a result of Lord Justice Jackson’s desire to reduce the rising costs of civil litigation: costs he felt that had the potential to impede access to justice. Moreover, under the existing system, Jackson believed that the balance was unfairly tipped in favour of the claimant which meant that, in essence, injured parties were allowed to litigate ‘risk-free’.
Some of the more contentious changes imposed by the Jackson reforms include, but are not limited to:
1) Fundamental changes to the costs a losing party has to pay. Previously, solicitors took a ‘success fee’ which allowed up to a 100% fee uplift, both of which had to be paid by the unsuccessful party, as well as any after-the-event insurance premium. The reforms mean that solicitors can instead operate on a contingency fee basis, to be agreed upon with clients as a percentage of the damages awarded; which may be up to 25% in personal injury cases as part of a Damages Based Agreement or the success fee is deducted from damages
2) A test of proportionality – again designed to curb litigation costs, essentially by permitting judges to disallow fees that are disproportionate to case complexity or value.
3) The abolition of referral fees paid by solicitors to obtain personal injury clients so that this method of procurement no longer exists.
Initially the reforms garnered a mixed reaction from the legal profession. Some legal analysts argued that the changes were a step away from Britain adopting a ‘compensation culture’. Notably, the Law Society felt that the reforms could actually prove to be unfair and possibly even hinder access to justice, thereby possibly undermining the primary intention of the changes. Certainly the 25% success fee cap has the potential to create a reluctance amongst solicitors to take on more complex and time-consuming cases, thus resulting in a less accessible legal service for claimants. The funding squeeze caused by the reforms also inevitably has the net effect that solicitors feel much less able to take on smaller, lower value claims.
There can be little doubt that the impact of the Jackson reforms were, and still are, both great in scope and unfalteringly controversial. The changes have seemingly created a litigation climate whereby solicitors are compelled to be more selective with the personal injury cases that they are able to take on. Apart from a drive for efficiency, another of Lord Justice Jackson’s primary aims with the reform was to reduce costs in litigation which, he felt, hampered access to justice. In doing so, however, it could be argued that the reforms themselves, at least in part, may hinder a claimant’s ability to seek due justice.
Figures have revealed that the number of personal injury matters that solicitors are approached with has not decreased following the new reforms, but this raises the question: how many of these cases will solicitors – bound by the doctrine of the reforms – actually be able to take on? As the fallout continues to make its impact felt from the legislative bombshell – with many commentators suggesting that it is, as yet, too soon for the reforms to reveal their full effects – great interest will continue to be shown regarding personal injury claimants’ ability to deservedly access and rightly achieve justice.
For further information or legal advice please don’t hesitate to contact Farleys Solicitors. Our experienced Personal Injury department have a wealth of expertise practicing in this area of law, for a free initial claim assessment please call 0845 050 1958. Alternatively please complete an online enquiry form and a qualified solicitor will respond to your enquiry.