An announcement on whether the regulations governing damages-based agreements (DBAs) are to be changed is expected shortly, a major conference on the first year of the Jackson reforms heard on Friday.
The extension of fixed recoverable costs (FRC) is also on the government’s agenda.
The Civil Justice Council event in London, which brought together a wide range of stakeholders, was held under the Chatham House rule, meaning we cannot identify speakers – although exceptions were made for Lord Dyson’s closing address and the speech by Lord Justice Jackson (see below).
Delegates unhappy with the reforms were warned not to expect major changes any time soon, given that they had only been in place for a year – and a year that was “not normal” because of the huge spike in actions started in the run-up to 1 April 2013. A full review of part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 will take place between 2016 and 2018.
Positive signs to date included a 10% drop in motor insurance premiums and “steep decline” in the number of claims management companies doing personal injury work.
But the conference heard that the government was aware of the widely held concerns around the DBA regulations – and particularly whether they allow for hybrid agreements; the consensus among delegates was that DBAs were barely being used as a result. They were told that an announcement should be made soon. There was, however, no clear statement that they would actually be amended.
The government was also “sympathetic” to extending FRC, delegates were told, but the indication was that this would not happen quickly, as it had to take its place among the Ministry of Justice’s other priorities. Lord Justice Jackson recommended extending FRC across the fast-track, while there is growing momentum to have them at the bottom end of the multi-track, applicable to claims of up to £250,000.
More immediately, the government is looking to fix the costs of medical reports under the new regime for medical evidence in whiplash claims, with an announcement on the whole package planned for before Parliament’s summer recess.
In his address to the conference, Lord Justice Jackson strongly supported the calls for the DBA regulations to be amended, as well as the introduction of the 28-day buffer rule and, as he recommended in his report, abolition of the indemnity principle.
He was typically robust in the face of criticisms of his report, observing that reforms which are designed to bring down the costs of litigation and change the way in which lawyers work “are bound to be unpopular with practitioners”. But ultimately what mattered was whether they rein in excessive costs and promoted access to justice, the judge argued.
He said that despite the claims of critics, the evidence to date does not indicate any reduction in access to justice, when judged by the number of cases started since April 2013. Jackson LJ added that other factors were also in play – for example, contrary to his recommendation, civil legal aid has been substantially cut back.
In any case, it was too early to reach a “balanced conclusion” about the reforms, he said.
On costs management, for which Jackson LJ said there was “strong demand” from court users and potential litigants, the three reported problems to date were judicial inconsistency, the practice of some courts of severing costs management from case management, and that “many practitioners are not competent at budgeting”.
He said: “Each can, must and will be overcome. They present a challenge to the Judicial College, practitioners and the deliverers of CPD. We simply have to get a grip on costs budgeting.”