Legal blog: The way forward on civil litigation

There are likely to be more surprises in Prince Harry’s best man speech at his brother’s wedding at the end of this month than were contained in the MoJ’s recently published proposals to reform civil litigation funding and costs.

The government’s response to Lord Justice Jackson’s recommendations was largely in line with the proposals set out in its consultation paper in November 2010. That said, while not a surprise, some of the changes are radical, notably the abolition of the recoverability of ATE premiums and the effective abolition of CFA success fees. This will significantly affect the way in which litigation is funded although, in some part, the introduction of damages-based agreements may provide a solution.

Whole new area

Although providing greater certainty in some areas, the government has raised a whole new area for review with its consultation: “Solving Disputes in the County Courts: Creating a Simpler, Quicker and More Proportionate System”. This is looking at the whole county court structure and various ways in which disputes can be resolved more quickly and at lower cost. As part of this consultation, the government is garnering views on its proposal to extend the road traffic accident portal, both in terms of significantly raising the financial limit and broadening its scope to include employers' liability and public liability cases.

Referral fees

All of this leaves one last piece to the jigsaw which hasn’t been properly addressed by the government – the abolition of referral fees. Although Lord Young made it clear in his report that he didn’t favour referral fees, he seems to be alone in looking for them to be banned. The government has yet to address this; the Transport Select Committee simply called for greater transparency rather than their abolition. It remains to be seen whether the Legal Services Board or The Law Society will take the matter forward. However, even if referral fees were to be banned, market forces would probably look for ways of enabling firms to provide value to the provider of those cases.

The government’s proposals provide a good route map now for practitioners to work with. Clearly the insurance industry needs to take stock of what this means, both in terms of the funding of cases brought against their insured and the extension of the portal. Much of the success of these proposals will lie in their execution and it is important that key stakeholders genuinely participate in making these changes happen quickly and effectively.

Tim Oliver is president of the Forum of Insurance Lawyers (Foil).