In November 2008 Lord Justice Jackson was appointed by the Master of the Rolls to review the costs of civil litigation in England and Wales and to make appropriate recommendations to allow access to justice at a proportionate cost.
The final report was published on 14 January 2010. Amongst Jackson LJ’s proposals is that after-the-event (ATE) insurance premiums should no longer be recoverable from unsuccessful opponents.
In the report Jackson LJ states that "the regime of recoverable ATE insurance premiums is based upon the premise that certain claimants need to be protected against the risk of having to pay adverse costs … The flaw in the present regime is that it is not targeted upon those who merit such protection."
The report maintains that the current system in England and Wales is out of step with other jurisdictions in that the successful party's funding method will influence the costs their opponent has to pay.
Jackson LJ believes that ATE insurance premiums add considerably to the present cost of litigation. One aim of the proposals is that costs will become more proportionate.
In order to assist claimants in paying for the unrecoverable costs of litigation should his proposals be accepted Jackson recommends that general damages for personal injury and other civil wrongs (including nuisance and defamation) be increased by 10 per cent.
For further information: Lord Justice Jackson’s review of civil litigation costs - final report