Lord Justice Jackson has comprehensively rejected most of the government’s suggested “refinements” to his blueprint to reform the costs of litigation.
Publishing his response to the Ministry of Justice’s green paper to make clear his position to others, the judge told Lord Chancellor Ken Clarke that if he accepts the recommendations to abolish recoverability of after-the-event insurance and success fees, and to raise general damages by 10%, “the package should be implemented in full”.
Sir Rupert continued: “It would be the worst of all worlds to retain elements of recoverability (subject to qualifications and exceptions) thus adding to the present morass of rules and case law. Likewise, it would be a disaster to raise general damages in CFA [conditional fee agreement] cases but not in other cases. Any such approach would create perverse incentives and undermine the structure of the reforms.”
He rebuffed the suggestion that an element of success fee recoverability could be retained for judicial review, housing disrepair and complex personal injury and clinical negligence claims.
He said: “The reality is that the present CFA regime incentivises the bringing of strong claims, but at disproportionate cost and in an environment where the claimant has no interest in controlling costs. The reforms proposed in [my final report] will also incentivise the bringing of strong claims, but at proportionate costs and in an environment where the claimant has an interest in controlling costs.”
Jackson opponents are coalescing around his fallback option of retaining recoverability with various restrictions. Sir Rupert said this would just add further complexity and cost to an already complex and costly system.
He gave various reasons for rejecting the idea that ATE premiums could still be recoverable in relation to disbursements, pointing out that losing claimants or their solicitors are liable for their own disbursements in every other jurisdiction outside England and Wales. “Personal injury cases seem to be causing particular concern in the present consultation. But disbursements in the vast majority of unsuccessful personal injury cases are well within the means of claimants and their solicitors,” he said.
The judge hit back strongly at claims that the 10% increase in damages will be insufficient to compensate serious injured claimants for what they will lose in paying a success fee of up to 25% of damages.
He pointed out that this was “precisely the regime that prevailed before April 2000 and was regarded as satisfactory for non-legally aided cases. This has been confirmed by well informed claimant representatives… Success fees will be highest in those few cases which proceed to trial. In those cases, however, the claimant can dramatically improve his position by making a part 36 offer, reflecting the true value of his claim. If the defendant does not accept that offer, the claimant will make a substantially enhanced recovery and will be well placed to pay the success fee.”
He was similarly robust over any changes to his recommendations on qualified one-way costs shifting, arguing that they do not increase uncertainty, and that the government’s changes would increase complexity.
He did, however, accept a handful of the government’s proposals, most notably its approach on proportionality, and on various minor issues.