Personal injury lawyers issue warning over CFA reform
Thursday 29 July 2010 by James Dean
Personal injury lawyers warned that the government was taking ‘a step backwards’ this week as it announced that it will consult on Lord Justice Jackson’s plans for reform of the way lawyers are paid in civil cases.
Justice minister Jonathan Djanogly said the government will focus on no-win no-fee agreements as part of an autumn consultation on Jackson’s proposals for civil litigation costs.
Jackson recommended abolishing the recoverability of conditional fee agreement (CFA) success fees and after-the-event (ATE) insurance premiums from the losing party, while increasing general damages in personal injury, defamation and other tort claims by 10% to compensate. He recommended the use of contingency fee agreements instead.
Jackson’s recommendation to abolish referral fees in personal injury cases will not be considered as part of the consultation.
The Association of Personal Injury Lawyers said the proposed CFA reforms would be detrimental to claimants. ‘Shifting costs onto claimants is a step backwards, and could disenfranchise many injured people from the justice system, because they simply won’t be able to afford to bring legitimate cases,’ it said.
But Dan Cutts, president of the Forum of Insurance Lawyers, said the consultation was ‘a very welcome step in the right direction’.
However, he warned that Jackson’s proposals should not be implemented piecemeal. He said: ‘Jackson set out his recommendations as an interlinked package and this is very important. Lord Woolf’s report of 1996 was meant to be a comprehensive code to speed up litigation and make it more cost effective; however, it was implemented only in part and then had CFAs overlaid on top. This has led to the unsustainable situation that Jackson has set out to redress.’
Djanogly said that Jackson’s recommendations will be taken forward by the government ‘as a matter of priority’ and that CFA reform ‘should lead to significant costs savings, while still enabling those who need access to justice to obtain it’.
He added that CFAs ‘have played a role in giving access to justice’, but ‘high costs under the existing arrangements have now become a serious concern, particularly in clinical negligence cases against the NHS Litigation Authority and in defamation proceedings’.
Comments
A review of CFAs and
A review of CFAs and hopefully CCFAs (particularly the ludicrously high ATE premiums charged and success fees applied) is long overdue. The PI industry has all but brought the legal profession into disrepute as litigation is now all about costs/profits generation as opposed to damages for the injured. Damages are now an incidental by-product of the process and, whilst there will be hoots of derision from those who benefit from the current position, this must be addressed.
CFA Reform
Whatever arguments are made in respect of the need for CFA reform, it should not be considered that Jackson's proposals are anything more than a politically motivated attack on the "compensation culture" which will strike a chord with the owners of small businesses who are incovenienced by the obligations imposed on them by health and safety legislation.
The implementation of any, or all, of Jackson's proposals will only harm legitimate Claimant's who will be faced with increasing bills under unfair contingency based arrangements. Even if the proposals do produce a shift in focus from the maximisation of costs to the maximisation of damages, a huge proportion of any additional damages awarded will be lost by the Claimant in terms of legal costs.
A lot of the "PI Factories" who deal with large volume but low value PI work will not be affected by Jackson's proposals, and unfortunately, it is those Claimant's with the most severe injuries who require an expert lawyer to handle their case who will suffer the most at the hands of Jackson's proposals.
I am all for reform, I believe reform is necessary and required, but Jackson's proposals are a political wolf in sheep's clothing designed to dissuade Claimant's from bringing claims at all and will only serve to limit an individual's access to justice.