Lord Justice Jackson's final report following his review of civil litigation costs was released on 14 January. The major recommendations coming out of his report that will be of interest to lenders are:
- Success fees and after the event insurance premiums should cease to be recoverable from unsuccessful opponents. Any success fee will be borne by the client.
- The indemnity principle should be abolished.
- Lawyers should be able to enter into contingency fee agreements with clients for contentious business.
- There should be a scheme of benchmark costs for routine bankruptcy and insolvency cases.
- There should be a campaign to ensure greater awareness of the benefits of alternative dispute resolution but it should not be mandatory for all proceedings.
- The courts should be more robust in case management by, for example, allocating cases to judges with relevant expertise, the same judge to deal with the case throughout and standardising case management directions.
- Where a defendant fails to beat a claimant's offer, the claimant's recovery should be enhanced by 10%. However, in respect of higher value claims (over £500,000) there may be a case for scaling down that uplift.
Things to consider
These are just some of the recommendations from LJ Jackson's report. The full report can be accessed on the Judiciary of England and Wales' website. The extent to which these recommendations will be brought into force remains to be seen. Given there will be a general election this year, it may be some time before any necessary changes to primary legislation will be made.