18 February 2013Print This Post

“A complete shambles” – litigators’ damning verdict of Jackson implementation

Kaye: MoJ has been stubbornly silent

The London Solicitors Litigation Association (LSLA) has stepped up its attack on how the Ministry of Justice (MoJ) has handled implementation the Jackson reforms, saying the roll-out of the regulations and directions is “shambolic”.

A statutory instrument with changes to the Civil Procedure Rules (CPR) was meant to be published last Monday, but – even though it was sent to some stakeholders on Tuesday – eventually only went online on Friday. There is still no sign of the new practice directions.

Last month LSLA president Francesca Kaye said the absence of any rules, regulations and practice directions was “wholly unacceptable” and threatened the tip the civil litigation system into chaos. Speaking on Friday, she said “the MoJ has been stubbornly silent – not even issuing an update to tell us what is happening. It’s ridiculous”.

She continued: “It’s been a complete shambles. There is a limit to how much lawyers can prepare for change without seeing the detailed practice directions. The legal profession is a huge business. We now have 29 working days (or less) to train everyone for major changes upon which the success of major pieces of litigation may turn. I can’t think that in the private sector or even the public sector such a significant change would be implemented in 29 days.

“The LSLA has been arguing for implementation of the changes to be put back from 1 April to allow the legal profession to get properly up to speed. The existence of the statutory instrument signals the MoJ’s intention to plough on regardless. Far better for them now to acknowledge this cannot be done in the time and set a more realistic timetable. The current silence is causing great uncertainty and threatens to undermine the working relationship between legal profession and the MoJ.”

By Neil Rose


One Response to ““A complete shambles” – litigators’ damning verdict of Jackson implementation”

  1. See below from Directline’s Prospectus. Premiums could go up in the short term as referral ban means upto £30 Million referral fee income is lost! But overall LASPO is ‘broadly neutral’ which means no change in premium!! Disregard Simmons V Castle comments. At the end, Directline says ‘regulatory reform’ is not key driver in reducing premium. So whats it is LASPO all about?

    Civil litigation costs reform in England and Wales
    Legislation and regulation recently proposed in the United Kingdom, including the enactment of the Legal
    Aid, Sentencing and Punishment of Offenders Act 2012 (‘‘LASPO’’) and other reforms to costs in the
    English civil litigation system proposed by Lord Justice Jackson, including a 10% increase in general
    damages, could affect the Group’s other income and claims-related costs. Provisions such as a reduction in
    fixed fees for filing legal claims as well as the removal of ‘‘after the event’’ legal expenses insurance and
    conditional fee arrangements or ‘‘success fees’’ as prescribed under LASPO could reduce the amount the
    Group must pay to settle bodily injury claims, which could positively affect its loss ratio, and may reduce
    the Group’s legal and administrative costs of settling and litigating claims, which could positively affect its
    expense ratio. At the same time, other provisions such as the banning of referral fees would result in a
    substantial decrease in the income the Group generates through solicitor referrals while a 10% increase in
    general damages would offset a significant portion of the gains from reforms to legal fees. See Part IX:
    ‘‘Regulatory Overview—Regulatory developments—Civil litigation costs reform in England and Wales’’ for
    further information on these reforms.
    Taken together, the Group currently believes that these proposed reforms, if implemented in a coordinated
    manner, should have a broadly neutral effect on the results of the Group in the medium term although the
    short term impact of some reforms (such as the banning of referral fees) may have an adverse effect on the
    Group’s results before the benefits of other reforms (such as the reduction in fixed legal fees) are realised
    by the Group.
    Examples of the proposed changes which are adverse to the Group include the proposed 10% increase in
    general damages referred to above and the proposed ban on referral fees. The Group generated
    £11.0 million in solicitor referral fee income from its ongoing operations during the six months ended
    30 June 2012, and £27.9 million, £39.4 million, and £31.0 million during the years ended 31 December
    2011, 2010, and 2009, respectively.
    Conversely, reforms such as the reduction in fixed legal fees as well as the removal of ‘‘after the event’’
    legal expenses insurance and success fees would have the effect of lowering claims costs, and could offset
    much or all of the negative impacts described above, although the benefits to the Group of any reduction
    in fixed legal fees from £1,200 per claim are uncertain as the revised fixed fee amount has yet to be
    confirmed.
    However, if certain of these reforms are adopted on a piecemeal or uncoordinated basis, these reforms
    could have an adverse effect on the Group’s results.
    A specific recent example of this, which may have an incremental adverse impact on the Group’s results inthe short term, is the decision in July 2012 of the Court of Appeal in Simmons v. Castle ([2012] EWCA Civ
    1039). The Group had previously anticipated that a 10% increase in general damages, as recommended by
    Lord Justice Jackson, would apply to new claims commenced after 1 April 2013 but with certain other
    offsetting measures to be implemented by LASPO coming into effect at or around the same time.
    However, the Court’s decision implemented a 10% increase in general damages with effect from 1 April
    2013 but applied it to all claims decided after that date, irrespective of when the claim was made. As a
    result, claimants for recoverable claims commenced before 1 April 2013 but settled or decided after 1 April
    2013 would be entitled to recover a success fee and after-the-event premiums and additionally a 10%
    increase in the amount of general damages.
    There is currently uncertainty arising from the Court of Appeal’s decision in Simmons v. Castle in July 2012
    and a subsequent hearing on 25 September 2012, following applications by the ABI to the Court of Appeal
    for it to reconsider its decision. The outcome of the recent hearing is pending as at the date of this
    Prospectus and, as such, the impact on cost of claims for the industry is unclear. If the Court declines to
    amend its July decision, and assuming its decision is handed down in the near future, the Group currently
    estimates that this could result in an adverse pre-tax impact in the region of approximately £30 million to
    £45 million to the Group’s results in 2012, the majority of which may be recognised in the third quarter of
    2012. If the Court reverses its original decision, this impact will not arise, although it is also possible that
    136the Court may implement a compromise position, which would result in a lesser impact. Given the current
    uncertainty, the above estimates do not include mitigating actions, if any, that may be available to the
    Group.
    The ultimate impact of these initiatives remains uncertain, however, and uncoordinated adoption of the
    various reforms could lead to short-term adverse impacts before the benefits of the entire program
    emerge, or longer-term impacts if the reforms are not implemented as anticipated. Regardless of outcome,
    the Group does not focus on regulatory reforms as a substitute for other cost saving and efficiency efforts.

    http://www.directlinegroup.com/~/media/Files/D/Direct-Line-Group/documents/20120928-Direct-Line-Group-approved-price-range-prospectus.pdf?pdfdata=1

  2. Peter Hall on February 19th, 2013 at 12:09 pm