The Jackson Reforms came into force in 2013. The key aim of the reforms was to address unwarranted delay and non compliance with court orders and rules and to bring about a complete change in culture and attitude. Aimed at personal injury litigation, they also affect commercial litigation in a number of important ways:
The courts can now set budgets which it is hoped will encourage parties to reach settlements out of court. Budgets must be prepared and approved at all set stages of any litigation, this is designed to ensure that the costs are in proportion to the value of the claim.
Offers to settle
Part 36 of the Civil Procedure Rules has been overhauled to encourage early settlement. This has been achieved by allowing for an award of interest of 10% when a settlement offer is beaten in addition to the recovery of the successful party’s costs.
Conditional Fee Agreements (‘CFA’)
A CFA is an arrangement whereby the solicitor’s payment is conditional on the case being successful. If the case is lost the solicitor will not be paid, if won the solicitor will be paid plus a success fee. CFA’s are no longer recoverable from the losing party, and success fees are also no longer recoverable from the losing side. If one is charged then it will be paid by the successful party.
Damage Based Agreements
As an alternative method of funding Damage Based Agreements can now be used in civil litigation. The maximum payment a solicitor can recover from the claimant’s damages is capped at 25% in personal injury, 35% in employment cases and 100% in all other cases. Claimants winning their case can recover their solicitor’s hourly rate and disbursements, but are responsible for paying any shortfall of costs paid by the losing side.