Lord Jackson's review floats some interesting ideas, but will it deliver?
The Jackson review offers something to everyone but little to anyone. Lord Jackson says he wants opinions on altering different parts of the system – be it after-the-event insurance or contingent fee arrangements – without defining what is definitely going to change. Anyone who has churned through the hefty 300 page review might feel an empty sense of achievement.
Lord Jackson has not ruled anything out. If Lord Woolfe’s report ten years ago was about speeding the court process, this is about making it more cost effective.
His report essentially agrees that ‘no win, no fee’ is here to stay, but he looks at ways in which the burden could be reduced on the losing side.
That’s because a legal loss could ruin a small firm or individual.
He therefore talks about capping the ‘success fees’ charged by lawyers in a winning case, a contingency legal aid fund that comes out of the winning claimant’s damages and fixed costs on cases.
What does this all mean to insurers?
Nichola Evans, from Browne Jacobson, says the changes to contingent costs could make it more expensive for the industry.
“For insurers the key concern here would centre on the issue of contingent costs, which would see the losing side in a case paying an additional layer of costs.
“This extra cost would be based on the amount between assessed costs (ie the amount the courts allow) and the amount by which the contingent fee exceeds this,” she says.
Lord Jackson also asks whether it is possible to make before-the-event insurance mandatory in motoring policies. Theoretically, that’s good news for the legal expense industry, such as DAS.
But unfortunately mandatory BTE legal expenses premiums could prove to be too expensive.
There are clearly some interesting ideas on the table. But there is real concern that they may not come to fruition. The review concludes in December, then it would have to be established in law during the course of the year.
By then a new Government may well be in power, and who knows how they will feel about the review.
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