The release of the highly anticipated review of civil litigation by Lord Jackson has thrown up several issues for law firms specializing in personal injury litigation. The review proposes several changes to the way civil legal cases are currently funded in an effort to cut costs. But how will Jackson LJ’s vision achieve a civil litigation process that doesn’t rely on No-Win No-Fee agreements, without preventing legitimate claimants from pursuing their accident compensation claims for fear of hefty legal bills?
Key proposals in the report include capping the bonus lawyers receive for winning a case (know as a success fee) to 25 per cent of the damages awarded to their client and restricting the use of insurance to cover legal costs if an accident claim is unsuccessful (using special after-the-event insurance policies). Jackson LJ also recommends that the general damages paid out to claimants in personal injury claims should be increased by 10%.
Whether an end to the after-the-event insurance policies that are used in most if not all No-Win No-Fee claims will mean legitimate claimants with lower value claims are unable to take their case to court remains to be seen. It might prove to be uneconomic for solicitors and personal injury law firms to act in low value claims where they will only receive a fixed level of costs at the end of the case.
On the other hand, scrapping the case referral fees paid by law firms to claims management companies, coupled with reforms to speed up the process of negotiation between solicitor and insurer, might lead to a leaner, sustainable civil legal sector. With many of the proposals in the report requiring new legislation, it is likely to be some time before the future of personal injury solicitors becomes clear.
Author: Neil Worrall