Related Legal Updates

New Rules on Litigation Costs – The Jackson Reform

by Fleur Turrington, Spratt Endicott Solicitors | Jan 17, 2013

The big change that is going to affect how litigation is conducted in 2013 is the long awaited implementation of Lord Justice Jackson’s reforms on costs, now set for implementation in April 2013.

Throughout last year there were various reports and much speculation over exactly what was going to happen in April 2013. A summary of the proposed main changes is set out below:-

  1. There will be the introduction of sanctions for Defendants who fail to accept a Claimant’s Part 36 Offer to settle. This will mean that an additional payment of 10% of the damages or 10% of costs for non-damages claims will be added if the offer is beaten at trial.
  2. The ability to recover from the losing party the success fee currently attached to Conditional Fee Agreements (entered into from the implementation date) will be abolished and the ability to recover insurance premiums for After The Event insurance will also be removed. Litigants will still be able to enter into CFA’s and take out After The Event Insurance but will have to pay these costs themselves.
  3. The current restrictions on Damage Based Agreements (DBA’s) will be removed. DBA’s are similar in style to Contingency Fee Agreements. In essence, under a DBA a solicitor’s fee is calculated as a percentage of the damages recovered with no fee payable if the client loses. Costs recovered from the losing party are used to pay part of the contingency fee.
  4. The introduction of “Qualified One-Way Costs Shifting” (“QOCS”) so that unsuccessful Claimants do not generally have to pay adverse costs, which obviates the need for After The Event Insurance. The Claimant will only be asked to pay the Defendant’s costs if it is wealthy or acted unreasonably in pursuing proceedings.
  5. The Government has announced that the Small Claims limit will rise from £5,000 to £10,000.

All in all this has an important affect on how litigants approach claims and careful consideration needs to be taken on when and how to make settlement offers. The goal of the Costs Reforms is to make the dispute resolution process quicker, easier and cheaper. At Spratt Endicott we are able to advise on the best way for bringing a resolution to your dispute. If you have a dispute where you require assistance or want further information on the affects of Lord Justice Jackson’s reforms on costs, please contact Fleur Turrington, Dispute Resolution Solicitor, on 01295 204136 or by email on: fturrington@se-law.co.uk