No-win no-fee agreements will be the focus of a government consultation on Lord Justice Jackson’s proposals for reforming civil litigation costs, the government announced today.

In a written ministerial statement laid before parliament this morning, justice minister Jonathan Djanogly said that the reform of conditional fee agreements (CFAs) ‘should lead to significant costs savings, while still enabling those who need access to justice to obtain it’. He said that Jackson’s recommendations, published on 14 January, will be taken forward by the government ‘as a matter of priority’.

Another key Jackson recommendation, the abolition of referral fees in personal injury cases, will not be considered as part of the consultation. Djanogly said that conclusions from the Legal Services Board’s referral fee consultations will inform the government’s position.

Under current arrangements, success fees from CFAs and after-the-event (ATE) insurance premiums can be recovered from the losing opponent, in addition to base costs. Jackson recommended abolishing the recoverability of success fees and ATE premiums, while increasing general damages in personal injury, defamation and other tort claims by 10%. He also recommended a regime of qualified one-way costs shifting for certain proceedings, whereby a claimant does not have to pay a defendant’s costs if the claimant loses.

Djanogly said: ‘CFAs have played a role in giving access to justice to a range of people. However, 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.’

The consultation will seek views on other recommendations on funding arrangements, such as contingency fees, where a lawyer takes a percentage of the claimant’s damages in successful cases. Such damages-based agreements (DBAs) are not currently permitted in litigation before the courts, as opposed to tribunals.

The consultation will not consider fixed recoverable costs in the fast track.

Djanogly said that the consultation will take account of the legal aid policy review, due this autumn. He said that the government will consider Lord Young of Graffham’s conclusions from his review of health and safety law and the compensation culture, and that the Civil Justice Council will consult over the summer on a voluntary code of conduct for third party funders.

A judicial steering group is considering the priorities for further implementation of a range of judiciary-led costs and case management work, he added.