News and Press
The impact of Lord Justice Jackson's review of civil litigation costs on Conditional Fee Agreements
15 January 2010
Lord Justice Jackson has published the final report on his comprehensive review of civil litigation costs, which highlights contingency fees as one of the key areas of reform. The review, published on 14 January, sets out Jackson’s proposals to reduce litigation costs and promote access to justice.
Jackson’s review outlines his proposals on Conditional Fee Agreements (CFA), whereby lawyers receive a percentage of damages won only if a claim is successful. The review proposes to limit success fees to 25% of damages recovered and to make the claimant pay for them. ATE insurance will still be available but also paid for by the claimant.
Andy Lyon, partner and professional negligence specialist at TLT, comments “the recommendations are generally welcome and long overdue. They will take a number of years to implement, however, whether by legislation or by rule change, so we should not expect any immediate impact on professional negligence claims.
“ATE insurance may become cheaper as providers compete in order to survive. It will still, however, be worth having insurance on certain, perhaps higher value, claims where the risk is greater but the claim remains worth pursuing.
“Previously, firms have been able to recover a large proportion of their costs, up to a 100% success fee and the ATE premium from the other side if successful. Following Jackson's recommendations, we can ultimately expect to see a downturn in the level of litigation that lawyers are prepared to run and clients are prepared to pay for on a "no-win no-fee" basis.
“The recommendations will mean that claimant professional negligent firms will have to continue to adapt and offer innovative funding arrangements to meet client needs including contingency fees, third party funding and perhaps different types of CFA schemes.”
For a summary of Lord Justice Jackson’s review, please see the link to publications. For more information, please contact Andy Lyon.