On the 14 January 2010 Lord Justice Jackson published his final report regarding a thorough review of the legal costs system.

Highly controversial, the key issues in the report are:

  • the abolition of the indemnity principle
  • the abolition of recovery of success fees and ATE premiums, partially compensated by an increase of 10% in PI general damages
  • a ban on referral fees in PI cases
  • qualified one-way costs shifting
  • fixed costs for fast track PI and in the future for all fast track cases
  • legalisation of contingency fees
  • the creation of a Costs Council to decide on guideline hourly rates and fast track fixed costs
  • stronger case management including costs management
  • a 10% increase of damages where a defendant fails to accept a claimant's Part 36 offer which is beaten at trial.

What can be said with certainty is that these are major changes and that if and when they are brought into effect they will have a major impact on all civil practitioners, particularly those practicing in personal injury. There will certainly be the need for extensive litigation in order to map out the boundaries of the new regime and to test the effects of these reforms.