Ken Clarke Backs Jackson Report’s Recommendations
Lord Justice Jackson's review of civil litigation costs, published in January 2010, made a number of recommendations for the reform of the civil litigation system, yet it was unclear to what extent they would be enacted by the coalition government. In an interview with the BBC on 26 October 2010, Ken Clarke gave the strongest indication yet that the Ministry of Justice intends to follow through with some of the report's recommendations.
Mr Clarke stated that the current litigation system has led to a "huge increase in costs" giving rise to situations whereby, "regardless of how frivolous a claim is, the sensible thing for a defendant to do is settle before legal costs start running up." The Justice Secretary suggested that he was "impressed by the Jackson report" and that its proposals were "very attractive."
Mr Clarke commented that implementing the recommendations may involve a move away from Contingency Fee Agreements, which allow claimant's solicitors to charge a success fee which can be recovered from the other side, towards US style contingency fees, whereby some of the costs are recovered out of the damages awarded to the claimant. This was just one of Lord Jackson's recommendations, which also included the capping of success fees at 25% and preventing the recovery of ATE insurance premiums, and it remains to be seen if and when they will in fact be implemented.
Mr Clarke's comments follow the publication of Lord Young's Health and Safety report, on 15 October 2010, which also recommended the implementation of Lord Justice Jackson's proposals to limit the recovery of ATE insurance premiums and CFA success fees, in order to tackle the UK's "compensation culture."
Given this background, and the general trend of cost cutting, it would appear that the coalition government does intend to reform the civil litigation system, particularly regarding CFAs and ATE insurance, and that, although the government have yet to indicate their specific plans, the Jackson report may be used as a template for this reform. Although some fear that such reforms may prevent access to justice, it is hoped they will discourage fArivolous claims and ensure that claimants keep a tight rein on their legal costs.
This article was written by Beale and Company Solicitors LLP and has been reproduced with their permission. Beale and Company Solicitors are a niche commercial law firm specialising in providing advice to the professions, insurance and construction industries. For more information please visit www.beale-law.com.