22 July 2010

Revealed: Coalition to announce way forward on Jackson as Young backs report

The future of referral fees could become clearer next week after Legal Futures learned that the Coalition government is to issue a statement on Monday outlining what it intends to do with the Jackson report.

It comes as Lord Young of Graffham, who was commissioned by Prime Minister David Cameron to report on the compensation culture, backed Lord Justice Jackson’s recommendations and spoke out against the influence of claims management companies.

A written ministerial statement title – “Review of civil litigation costs” – was laid late on Thursday and the statement itself will be issued on Monday. Its contents are being kept closely under wraps.

However, Legal Futures understands that plans for a consultation paper are likely to be announced, although it is not clear whether this will reopen the Jackson recommendations or just concern how they should be implemented. We believe it is unlikely that the full package of measures will be put forward at this stage, even though the judge described them as “interlocking”.

The Jackson report recommended scrapping referral fees (or, as an alternative, capping them at £200), as well as ending the recoverability of success fees and after-the-event insurance, and introducing one-way costs-shifting in certain categories of litigation and fast-track fixed fees.

Lord Young is reviewing health and safety laws and the compensation culture, and will report later in the summer. He told Legal Futures: “I fully support the recommendations set out in Lord Justice Jackson’s report”.

Lord Young accepted that much of the problem around the compensation culture arises from perception rather than an actual major rise in claims, and said that “media stories coupled with aggressive advertising from claims referral agencies have created a climate of fear around health and safety”.

Despite three recent reports recently – from the Legal Services Board, Legal Services Consumer Panel and Advisory Committee on Civil Costs (see stories here, here and here) – have all accepted their role in the system, Lord Young argued that “the role of referral agencies in exacerbating fears around health and safety is a genuine concern. In my view these agencies encourage individuals to believe that they can easily claim compensation for the most minor of incidents and even be financially rewarded once a claim is accepted”.

He said he was interested interested “in putting in place a system where compensation awards properly reflect the injury incurred, do not include disproportionate fees for lawyers and referral agencies and can be bought to a conclusion as swiftly as possible”.