The Paul Rooney Partnership Respond to Recent Proposed Reforms of Civil Litigation Funding and Costs

The Government’s plan in the Ministry of Justice’s Green Paper, "Proposals for Reform of Civil Litigation Funding and Costs in England and Wales" (The "Jackson" Green Paper) will have a detrimental impact on access to justice. The Government is running a consultation period until 14th February 2011 and key changes made thereafter will need to be discussed in Parliament.



It is recognised that we are in a tough economic climate but the drive to cut costs for insurers (who usually pay compensation on behalf of defendants) must not be at the expense of constituents who may have been injured through no fault of their own.



Any civil justice system should have the claimant and access to justice centre stage. Every study there has been has shown there is no compensation culture, an argument actually accepted by the Government, yet the Government intends to take action to deal with what is a perceived rather than a real, problem.



Lord Justice Jackson would have us accept that part of this "problem" is the alleged unreasonable cost to defendants’ insurance companies of court claims. Despite evidence to the contrary, this has become an accepted fact by policy makers ignoring the reality that the insurance companies’ strategies in large part create their own problems with their late admissions of blame and inadequate first compensation offers. They admit they lose 90% of cases, so they should deal with these legitimate accident claims properly earlier, if they want to keep costs down.



Under the new proposals, some of the costs of bringing a case will be taken out of the damages awarded to the injured person, damages which are carefully calculated by the courts to return the injured person to the position he/she would have been in if it were not for the injury. Surely, though, the wrongdoer must be held responsible and accountable? It is not for the injured person to subsidise the insurance industry and to increase their profitability nor should they have to turn to the State for support.



In an attempt to compensate for the deduction of costs from the damages, Lord Justice Jackson has recommended increasing general damages (compensation for injuries) by 10% but this increase would not be enough to cover the shortfall in damages in many cases, especially the most serious, often catastrophic cases.



It is inevitable that the Government’s plans will mean that the winners will be the insurers and the losers will be claimants. Lord Justice Jackson’s recommendations will, in many cases move the cost from the culpable wrongdoer to the injured individual.



Consequently, a high proportion of claimants’ cases will no longer be economically viable and the proposals will encourage "cherry picking", so worthwhile but challenging cases will not be brought.



The proposed introduction of Qualified One way Costs Shifting (QOCS) will not as suggested protect claimant’s against the risk of paying the defendant’s costs if the case is lost as it is too subjective and does not provide the certainty claimants need. It is conceivable that an impecunious claimant could be pursued by an insurer many years after the claim has been dealt with if he/she subsequently comes into money. Would your constituents want to take the risk of pursuing a difficult but meritorious claim if there was a real possibility that they could be pursued for the defendant’s costs years later. Under the current system, the defendant’s costs are usually met by a policy of insurance which the claimant purchases at the outset of the claim and the defendant pays the premium if the claim is successful. A reduced premium is often payable if liability is admitted by the defendant early on to encourage good conduct.



Whilst we recognise that there are issues to be addressed and that the current system needs reform, there is a danger of "throwing the baby out with the bathwater" and, we believe the way forward is to build on the options in the Green Paper creating a system that will ensure that claimants’ access to justice is maintained, and at the same time achieving the purported Government objective of limiting costs, but in a fairer and more balanced way.



For more information on personal injury accident claims visit http://www.paulrooney.co.uk/