The government issued its response to Lord Justice Jackson's recommendations on reforming civil litigation funding and costs in England and Wales, on 29 March 2011. The government plans to implement all of Lord Justice Jackson's proposals, with some minor amendments, 'as soon as Parliamentary time allows'. 

The key changes will include:

  • General damages will be increased by 10% for all claimants in personal injury claims. 
  • Preventing claimants from recovering Conditional Fee Agreement (CFA) success fees and 'After the Event' insurance premiums from defendants in successful claims. 
  • The maximum CFA success fee chargeable by solicitors to their clients will be 100% of their base costs and in personal injury cases it will be capped at 25% of the client's damages, not including future care and losses.
  • Damages-based agreements (DBA)/contingency fees will be allowed, so that solicitors can take a percentage of their clients' damages in successful claims (as opposed to a percentage of their base costs as in CFA cases). The fee will be capped at 25% of the damages in personal injury cases, not including future care and losses.
  • A claimant will not have to pay the defendant's costs in failed personal injury claims (including those relating to clinical negligence) but the defendant will still have to pay the claimant's base costs in successful claims.  In other areas of law the claimant will remain at risk of having to pay the defendant's costs if their claim is unsuccessful, as is currently the case.
  • Defendants will become liable to pay an additional sanction, equivalent to 10% of the value of the claim, under Part 36 where they don't accept a reasonable offer from a claimant which they then fail to beat at trial.

Our compensation claims team have outlined the key points of the potential reforms and the possible impact to personal injury and clinical negligence claims. View the briefing.