Government targets CFAs and contingency fees in Jackson consultation

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By Legal Futures

26 July 2010

The government is to consult on Lord Justice Jackson’s blueprint for reform of conditional fee agreements (CFAs), as well as introducing contingency fees, “as a matter of priority”, justice minister Jonathan Djanogly announced today.

The decision comes despite the judge warning that his recommendations should be viewed and implemented as a package.

Mr Djanolgy said: “CFAs have played a role in giving access to justice to a range of people. However, high costs under the existing arrangements have now become a serious concern, particularly in clinical negligence cases against the NHS Litigation Authority and in defamation proceedings.”

The consultation this autumn will focus on ending the recoverability of success fees and after-the-event premiums; increasing by 10% the level of general damages for personal injury, defamation and other tort claims; and a regime of qualified one-way costs shifting in specified proceedings, including personal injury and defamation.

The consultation will also “seek views” on other related recommendations on funding arrangements, such as whether lawyers should be permitted to enter into damages-based agreements, the formal name for contingency fees.

Mr Djanogly said work is also progressing on a number of other areas covered by Sir Rupert’s review, but will not form part of the consultation. The government said it is still considering the recommendations on introducing fixed costs across the fast-track and banning referral fees; the latter will be informed by the work of the Legal Services Board. It will also consider Lord Young of Graffham’s conclusions from his review of health and safety law and the compensation culture.

Last week, the Civil Justice Council last week launched a consultation on a voluntary code of conduct for third-party litigation funders, as recommended by Sir Rupert.

Mr Djanogly said a range of judiciary-led costs and case management work has been continuing since Sir Rupert’s report was published:

  • More robust costs management is being piloted in defamation cases and in mercantile, technology and construction cases;
  • A streamlined process and scale costs in the Patents County Court will come into effect in October 2010;
  • There will be a pilot of assessing disputed costs under £25,000 on the papers rather than at a hearing, in Leeds, Scarborough and York County Courts from October 2010; and
  • A pilot to speed up and reduce the costs of expert evidence (through concurrent evidence – dubbed the ‘hot tub’) started in June 2010 in mercantile, technology and construction cases at the Manchester Civil Justice Centre.

A Judicial Steering Group is considering the priorities for further implementation of these recommendations.

Lord Neuberger, Master of the Rolls, said: “I welcome the news that the government has decided to move forward on implementing Rupert Jackson’s comprehensive recommendations for tackling civil litigation costs. There is no doubt that – as the final costs report demonstrates in stark terms – the costs generated by civil litigation are disproportionate. The judiciary has made its position clear; it supports the review’s recommendations as a means of reducing costs and making them more proportionate.”

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