A Quick Guide to the Jackson Reforms

On 1 April 2013 a number of changes were made to the Civil Procedure Rules by the Jackson Reforms. The reforms affect three main elements of litigation: costs management, litigation funding and litigation management. Litigating parties will need to take them into account when contemplating how their case is managed and funded.

Costs Management

Prospective cost budgets – these must be filed in multi-track cases commenced after 1 April. Costs orders will be based on the approved budget unless there is good reason to do otherwise. The rules do not apply to Commercial Court claims and claims above £2m in the Technology and Construction Court, Mercantile Courts and Chancery Division, unless the court requires it.

Qualified One Way Costs Shifting (QOCS) – QOCS is introduced for personal injury and clinical negligence claims. It means even successful defendants have to meet their own costs; losing claimants are not liable for costs unless their claim is struck out for abuse of process or it is dishonest.

Reasonable Costs - there is a shift from necessity or reasonableness to proportionality when considering costs awards. If the costs are not proportionate to the size and nature of the claim it may not be reasonable to recover them.

Litigation Funding

Damages-based agreements (DBA) – DBAs are now allowed, whereby lawyers conduct litigation in return for a percentage of damages awarded but defendants are liable for costs only on conventional basis. Claimants must meet any shortfall themselves. Contingency fees are capped at 25% for personal injury, 35% for employment and 50% for all other claims.

CFA success fees and ATE premiums no longer recoverable - losing opponents are not liable for arrangements made after 1 April 2013. Exceptions exist for insolvency claims, privacy and publication proceedings and mesothelioma claims, for the time being.

A 10% increase in general damages - to be introduced for claims in contract or tort for non-pecuniary loss with an exception where the claimant has the benefit of a CFA with recoverable success fee.

Litigation Management

Case Management - a tougher stance is to be taken by courts managing cases regarding compliance with court timetables etc.

Disclosure –courts have a ‘menu option’ of possible disclosure orders in place of the presumption of standard disclosure and parties will now have to submit a disclosure budget in advance of the first Case Management Conference.

Part 36 offers – there is now an additional sanction for claimants’ offers equivalent to 10% of damages. This is tapered down for larger claims to give a maximum £75,000 payment for claims of £1 million or more.

Witness statements – these are to be limited by the courts. The courts have increased power to control the number of witnesses, issues and length of witness statements.

Experts - parties seeking permission for expert evidence will have to identify the issues the evidence will address and give cost estimates. Judges may allow concurrent expert evidence.

The Jackson Reforms will affect most civil litigation cases; if you would like to know more about how they will affect your case, please contact one of our dispute resolution solicitors on 0207 611 4848.