Neuberger welcomes conditional fee arrangements review

Lord Neuberger has welcomed this morning's announcement that the government is to consult on a review of the 'no win, no fee' regime in the autumn.

Legal aid minister Jonathan Djanogly said in a written ministerial statement the consultation would consider ways of implementing Lord Justice Jackson's recommendations on costs in civil litigation, with a particular focus on conditional fee agreements.

'There is no doubt that '“ as the final costs report demonstrates in stark terms '“ the costs generated by civil litigation are disproportionate,' Lord Neuberger said. 'The judiciary has made its position clear; it supports the review's recommendations as a means of reducing costs and making them more proportionate.'

The Master of the Rolls has been a long-term supporter of cost control and has spoken out in favour of greater judicial activism.

When the Jackson report was published in January, he welcomed it as 'clear and comprehensive', 'thorough and fair', and 'imaginative and realistic in its proposals'.

Earlier this year, he said that greater judicial consistency in the approach to cost and case management was needed, which would embed 'a more properly disciplined, almost managerial, approach to the conduct of litigation by lawyers'.

Lawyers and judges, he argued at the annual Personal Injuries Bar Association conference, should be 'forced to love costs management'.

Making the announcement this morning, Jonathan Djanogly acknowledged that CFAs have provided access to justice to a range of people but he said high costs under existing law had 'become a serious concern', particularly in clinical negligence cases against the NHS Litigation Authority and in defamation proceedings.

The minister said the government would consult on a reform of CFAs 'which should lead to significant costs savings, while still enabling those who need access to justice to obtain it'.

The consultation, due to start in the autumn, will also cover other recommendations on funding arrangements such as damages-based agreements (DBAs) or contingency fees in litigation.

DBAs are also a type of 'no win, no fee' agreements which allow a lawyer to take a percentage of the claimant's damages for taking on the claim. DBAs are commonly used in employment tribunals but are not permitted in litigation before the courts. This consultation will take account of any relevant legal aid reform proposals on which we will also be seeking views in the autumn, as previously announced.

In his report published on 14 January, Jackson LJ recommended abolishing the recoverability of both success fees and ATE insurance premiums '“ both of which can be recovered from the losing party '“ but a change in the law would require primary legislation.

Jackson LJ also recommends a ten per cent increase in the level of general damages for personal injury, defamation and other tort claims, to assist claimants to meet the cost of the success fees for which they would now be liable.

His other big recommendation is a qualified one-way costs shifting in specified proceedings, including personal injury and defamation.

Other recommendations in the Jackson report are being considered separately:

• The Legal Services Board's review of referral fees will feed into the government's position.
• Fixed recoverable costs in fast-track cases.
• Lord Young will report to the government once he has completed his 'Review of health and safety laws and the compensation culture'
• The Civil Justice Council is consulting on a voluntary code of conduct for third party funders.

Other changes are being considered or already piloted by the judiciary:

• More robust costs management is being piloted in defamation cases and in mercantile, technology and construction cases.
• A streamlined process and scale costs in the patents county court will come into effect in October 2010.
• A pilot in Leeds, Scarborough and York county courts from October 2010 to assess disputed costs under £25,000 on the papers rather than at a hearing.
• A pilot, started in June 2010 in mercantile, technology and construction cases at the Manchester Civil Justice Centre, to speed up and reduce the costs of expert evidence through 'concurrent evidence'.