Furious claimant personal injury (PI) lawyers have accused Lord Justice Jackson of bowing to the defendant insurance lobby with his radical proposals to cut the costs of litigation, which they say will also reduce access to justice.

Jackson’s year-long review of civil costs concluded that success fees and after-the-event insurance (ATE) premiums should no longer be recoverable from losing defendants; that victorious defendants should not be able to recover their costs in PI, clinical negligence and defamation cases (obviating the need for ATE); and that referral fees for PI cases should be scrapped.

He said solicitors should not be able to take more than 25% of a claimant’s damages for their success fee, and that general damages should rise 10% to ensure that claimants are no worse off than now.

Jackson also called for the introduction of fixed fees across the fast track and backed the use of contingency fees, although claimants would only be able to recover their costs in the conventional manner.

Launching the report last week, Jackson said the reforms would lead to solicitors competing ‘not on who can pay the most to a claims management company but on the basis of who can charge the lowest success fee… I believe the reforms which I propose in respect of PI litigation will [benefit] accident victims and also those who pay [insurance] premiums.’

‘The champagne corks will be popping at insurers’ headquarters,’ said Tom Jones, head of policy and public affairs at national trade union firm Thompsons. ‘They have got almost everything they have been lobbying for. Claimants are going to be paying out of their damages and insurers will be paying out to their shareholders.’

John McQuater, president of the Association of Personal Injury Lawyers, said the reforms offered little for accident victims. Ending recoverability would not save costs, but just shift them to the claimant, he said, and a 10% increase in damages will not compensate.

Dan Cutts, president of the Forum of Insurance Lawyers, welcomed Jackson’s recognition that PI costs are disproportionate. ‘He has also accepted that defendants have paid a heavy price for the access to justice that conditional fee agreements have provided.’

Law Society president Robert Heslett was pleased that Jackson recommended retaining the small claims limit for PI, adding: ‘We are hopeful… that the proposition to abolish the recovery of success fees from the wrongdoer does not result in less, rather than more, access to justice.’

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