Lord Justice Jackson's reforms are implemented from April 1, 2013 through the Legal Aid, Sentencing and Punishment of Offenders Act ("LASPO"). Changes will also be incorporated into the Civil Procedure Rules which set out the standards for conducting litigation and the mechanisms for managing litigation costs.
The reforms relate to the introduction of damages based agreements, modifications to disclosure requirements and changes to the management of litigation costs as well as changes to settlement offers.
The proposals are likely to have a huge impact on the parties to litigation as well as on the legal profession as a whole.
Changes to Litigation Funding
The most significant among the changes to litigation funding is the non-recoverability of success fees from the losing party under conditional fee agreements (CFA). A likely consequence is that lower value claims which will not meet the cost of the CFA success fee, or after the event (ATE) insurance premium, are less likely to be made.
Contingency fees, or the new damage based agreements (DBA), will be capped at 25% to 50% of value depending upon the nature of the claim. Meanwhile, defendants will only be liable for costs on a conventional basis so any shortfall in meeting legal fees from the costs awarded will need to be made up out of the claimant's damages.
To help claimants manage these changes, available damages will be increased by 10%.
Changes to Disclosure Requirements and Case Management
The requirement for standard disclosure in larger and more complex disputes is set to change significantly. In place of a presumption of 'standard disclosure' the court will have a menu of disclosure options to select from. Within this, the parties will list existing documentation and the potential costs of disclosing it two weeks prior to the first case management conference. The list and cost estimates will be backed by a statement of truth.
Changes will also see a strengthening of the case management powers of the Courts to help ensure stricter compliance with Court procedures and avoid problems such as delays in filing and irregularities in Court appearances. Reforms will also aim to reduce the costs of expert evidence to promote faster and more cost-effective trials.
Introduction of Cost-budgeting
The requirement for cost-budgeting in larger cases will mean providing the Court with a detailed estimate of the likely costs prior to the first case management conference. Costs will need to be proportionate to the complexity of the case. Orders may be made in relation to these budgets reducing the potential recoverability of variations in costs from the losing party.
Claimants in personal injury claims will benefit from Qualified One-way Costs Shifting whereby they will be able to recover their costs if they win but will not have to pay the defendant's costs if they lose except in certain circumstances.
If you are involved in or are contemplating litigation and would like to know how these changes might affect you contact firstname.lastname@example.org or email@example.com or by telephone on 0207 583 3434 for more information.