Monday, 21 February 2011

A round-up of responses to the Jackson Review Consultation

Valentine’s Day 2011, normally a day of romance but for ARAG and many other organisations and companies it signalled the end of the consultation period for the Ministry of Justice’s Proposals for reform of civil litigation funding and costs in England and Wales.

The proposals are based on recommendations from Lord Justice Jackson’s Review of Civil Litigation Costs (December 2009), in which he puts forward “a coherent package of interlocking reforms, designed to control costs and promote access to justice”. Some of the recommendations contained in the consultation paper include:
  • Introduction of qualified one way cost shifting
  • Abolishing the recoverability of after-the-event insurance (ATE) premiums and success fees
  • Increasing general damages by 10%
The responses from across the industry have been submitted and it is now a waiting game to see how the government proceeds. In the meantime, this blog summarises a selection of the responses.
  • Consumer Justice Alliance (CJA): The CJA describe the proposals as “misguided and ill-considered”, as they feel that they will “ultimately hinder the ability of injured victims to seek fair and reasonable access to justice”. More specifically, the CJA believe that it would be unfair to shift costs onto the injured victim and worry that capping success fees will mean it is not “commercially viable” for law firms to take cases with lower prospects of success. They also add that “there is no alternative that provides the certainty for claimants or defendants that a robustly regulated ATE market does”. Read more...

  • Legal Expenses Insurance Group (LEIG): As laid out by Tony Baker, LEIG’s director, "the LEIG response will to preserve access to justice by putting forward practical alternatives to Government proposals while delivering significant and proportionate cost savings." Reiterating that there is only a ‘perceived’ compensation culture; the group propose a revised ATE system that will “control claimants’ and defendants' costs, maintaining access to justice, reducing unmeritorious claims, solving the disbursement conundrum, and preserving the ATE market”. Read more...
  • Independent panel of law academics: Reported on the Law Society Gazette website, an independent panel of law academics described the proposals as ‘”misleading and inconsistent with a fundamental principle of civil justice.” They point out that they “would reduce the availability of legal services to injured persons, and benefit defendants at the expense of the injured.” Ultimately, the panel recommend that the “government should reject Jackson’s key proposal to allow lawyers to recover success fees from an injured person’s damages.” Read more...

  • Medical Defence Union (MDU): According to Post Online the MDU are backing the Ministry of Justice proposals to reform civil litigation costs, claiming that they will “make the civil justice system fairer but will not impact a patient's access to justice.” Representing medical professionals, the MDU state that they “wholeheartedly” support the proposals that tackle “excessive and disproportionate costs, without affecting the ability of patients to seek compensation when they have been negligently harmed.” Read more...
  • Association of British Insurers (ABI): The ABI is backing Jackson’s proposals stating that it is “time to put the brakes on the legal costs gravy train that is costing UK consumers £2.7 million every day.” They describe how, in their opinion, “high legal costs are at the heart of a compensation system that is too slow, too complex and fails too many genuine claimants.” The ABI believe that Jackson’s proposals will “deliver faster, fairer, more cost-effective compensation and care to those who need it.” Read more...
  • Access to Justice Action Group (AJAG): “Access to justice for ordinary people will be severely curtailed by the proposals” reports AJAG’s press release which outlines its response. Citing their consumer survey, the AJAG Co-ordinator notes that “the biggest fear people have when enforcing their rights is the risk of legal costs.” Therefore they present a “comprehensive package that both maintains access to justice and helps keep costs down.” Read more...
As a member of the LEIG and CJA, ARAG of course support their responses to the consultation. However, with the view that the proposals will negatively impact access to justice ARAG also submitted their own response.
  • ARAG maintain abolishing success fee recoverability would “have a catastrophic effect on injured victims” as “any deduction of damages would result in a victim receiving an unfair settlement”.

  • As an ATE insurer ARAG know first-hand how valuable this cover is to claimants and have serious doubts that qualified one way cost shifting will “be sufficient to remove the other side’s costs risk.” They point out that insurance will still be needed to plug the gap but that few insurers could “respond to providing such limited forms of cover.” Additionally, the premium may have to increase and it will still be taken from the claimant’s damages producing “a significant barrier to taking legal action.”

  • On unmeritorious claims, ARAG note that “ATE insurance acts as a significant filter on unmeritorious claims”, with ARAG declining “approximately 2/3rds of all individual quotes”.

  • In response to the proposal to increase general damages by 10% to balance out the costs deducted, ARAG cite the 1999 Law Commission report that describes general damages as “already too low”. They therefore back plans for an increase but not at the expense of abolishing recoverability of success fees and ATE premiums.

  • Regarding qualified one way cost shifting, ARAG state that it “would create a significant element of uncertainty and the likely prospect of satellite litigation.” Furthermore, ATE insurance would not be “available to protect those risks that would remain by virtue of the qualified rules” and will therefore deter genuine claimants from bringing valid claims and encourage more unmeritorious claims.

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