In Lord Justice Jackson's final report on his year-long review into costs he has recommended that after-the-event (ATE) insurance premiums should no longer be recoverable from unsuccessful opponents in civil litigation.
In his much-awaited report on costs in civil litigation, published on 14 January, Jackson LJ said ATE insurance premiums were a major contributor to disproportionate costs and so should cease to be recoverable. If this recommendation were implemented, it would mean an end to successful litigants recovering all of their costs. He also said success fees paid under conditional fee agreements should not be recoverable for the same reason.
Jackson LJ said increased use of before-the-event (BTE) insurance and qualified one way costs shifting would help remove the need for ATE insurance. BTE insurance could be promoted by encouraging people to take out legal expenses insurance, perhaps bundled together with household insurance. Under one way costs shifting, claimants would not be required to pay the defendant's costs if the claim were unsuccessful, but the defendant would have to pay the claimant's costs if it were successful.
To offset the effects for claimants, Jackson LJ said that general damages for personal injuries and other civil wrongs should be increased by 10%.
Other recommendations that could affect insurers include extending fixed costs and streamlining process and procedure in lower value claims, both of which would save costs for insurers. With regards to large commercial litigation in the Commercial Court, Jackson LJ said feedback was generally positive. However, he recommended some changes to the disclosure process, the use of lists of issues as a case management tool and docketing of cases to judges.
The UK Government has said it will consider Jackson LJ's recommendations. The full 557-page final report can be seen here.