As those of you who are involved in handling litigation cases will be aware, the NHSLA has long been concerned about the level of legal costs in civil litigation cases. The figures contained in its annual report, which has just been published and can be accessed here, demonstrate why.

Last year law firms representing patients received more than £100 million pounds from successful claims charging rates of up to £400 per hour, more than double those of the lawyers representing the NHS. It is also believed that in over 20 per cent of cases the patients’ legal costs exceeded the damages received. Many of the cases brought against the NHS are run under a “conditional fee arrangement”. These so called no win no fee arrangements enable the lawyers of successful claimants to recover their legal costs plus an “uplift” to represent the risk of not winning - this uplift is recovered from the paying party – in NHS cases this is the NHSLA.

The NHSLA’s views have been shared by many others. Concern that in some areas (including clinical negligence and personal injury cases) civil litigation costs are disproportionate to the value of claims led to the commissioning of the Jackson report which has just been published. The report can be accessed here.

One of the most significant of the proposals is the suggestion that “success fees” and “after the event insurance premiums” should cease to be recoverable from unsuccessful opponents in civil litigation. Although clients would still be able to enter “no win no fee” agreements with lawyers any “success fee” would be borne by the client and not the opponent.

It is proposed that this would be coupled with the introduction of one-way costs shifting (where an unsuccessful claimant does not have to pay the defendant’s costs) in personal injury claims and some others and an increase in the level of general damages for personal injuries and other civil wrongs to help the claimant pay the success fee and premium. It is also proposed that regulated contingency fee agreements would be permitted for both solicitors and barristers with costs being recovered on the conventional basis. Caps would apply to both success and contingency fees in personal injury claims.