Jackson civil cost reforms deferred until April 2013

The government has deferred Lord Justice Jackson's civil costs reforms until April 2013 but fought off attempts to scale back the changes.

The Ministry of Justice this week confirmed that civil litigation reform will be put back by six months to give law firms time to adjust. Liberal Democrat peer Lord Wallace of Tankerness announced the delay during the committee stage debate in the House of Lords on part 2 of the Legal Aid, Sentencing and Punishment of Offenders Bill.

Cuts to legal aid for most civil cases, included in part 1 of the bill, have already been put back until April 2013.

An MoJ spokesman said: ‘We are committed to reforming the ‘no win, no fee’ system so that legal costs for reasonable compensation claims will be more proportionate, and avoidable claims will be deterred from going to court.

‘This will require changes to legal rules and regulations and we want to give sufficient time to get the complex details right.’

The delay was welcomed by groups on all sides of the debate.

Law Society chief executive Desmond Hudson said: ‘The delay will give a welcome breathing space for the Ministry of Justice to now properly consider the damaging effect these changes to “no win, no fee” agreements will have on access to justice, particularly for middle England and those ineligible for legal aid.

‘The changes are complex and have been selected from a recent report by Lord Justice Jackson - despite his warning not to “cherry pick” from the report.

‘As presently conceived, we fear that the changes will advance the interests of insurance companies at the cost of access to justice and fairness. This delay gives time to pause and reconsider.’

Don Clarke, president of the Forum of Insurance Lawyers, said the delay was ‘preferable to a piecemeal implementation that fails to deliver the key elements of Jackson as an interlocking package’.

In the Lords on Tuesday, critics of the abolition of success fees and after-the-event insurance argued for amendments to LASPO. Labour peer Lord Beecham called for an increase on the suggested 10% uplift for damages, though Wallace argued his 33% suggestion would amount to ‘overcompensation’.

Lib Dem Lord Thomas of Gresford said plans for qualified one-way costs shifting should be included in the bill rather than ‘coming out of the air’ without parliamentary scrutiny. Wallace admitted that such plans had been considered but that the government was satisfied to leave implementation to the Civil Procedure Rule Committee.

Other peers tabled amendments for exemptions for cases involving industrial disease, libel and privacy, professional negligence and those involving claimants in a developing country or with significantly fewer funds than the defendant.

Although each amendment was withdrawn, they may be re-tabled when the bill comes to report stage later this month. The debate was due to continue on 1 February.