Measures to overhaul civil justice have created an imbalance between claimants and defendants – and offered few benefits to offset such unfairness.
That is the verdict of the Law Society in its response to the government’s review of Part Two of the Legal Aid, Sentencing and Punishment of Offenders Act.
In a largely critical assessment of the 2013 reforms, the Society says cases take longer; out-of-court settlements have flatlined; and qualified one-way costs shifting has had a negligible impact.
The act abolished the recoverability of success fees and after-the-event insurance from losing defendants. It also introduced new rules for costs budgeting and banned referral fees for personal injury.
The Society says many solicitors routinely ask for costs and/or a success fee, which together may amount to 25% of the total compensation and sometimes more. As a result, claimants pay part of their legal costs from their damages and are left undercompensated.
‘In introducing the reforms in LASPO Part 2, government felt that the balance between claimants (and their lawyers) and defendants (and their insurers) had shifted too far in favour of claimants,’ it says. ‘However, the reforms have tilted the balance too far in the other direction at the expense of injured victims and their ability to enforce their rights.’
Quarterly civil justice data show that issued claims worth £50,000 and more have fallen from 4,780 in 2013 to 3,309 in 2017. Issued personal injury claims overall have also fallen from 146,000 in 2013 to 142,000 in 2017.
The cap on the success fee can mean that solicitors are inadequately compensated for the risk taken and the time spent in dealing with complex issues, even where costs have been charged to the client.
At the same time, the Society says it benefits defendants to take full advantage of fixed recoverable costs when cases proceed to trial. Some claimant representatives have expressed concern that this encourages defendants to challenge even the smaller points, which causes delay and increases costs.
QOCS has proved to be an inadequate replacement for ATE insurance, and usually claimants will take out cover in any case, the Society adds. This has not materially altered the way cases are conducted, with no evidence that defendants are more likely to agree out-of-court settlements.
Court data for 2018 show an average wait of 56 weeks between issue and trial for fast and multitrack cases, and an average of 33 weeks for small claims cases – both increased since 2013 and blamed on the increase in litigants in person since LASPO took effect.