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Legal fees to be slashed in personal injury claims under Lord Justice Jackson’s Review of Civil Litigation costs

Lord Justice Jackson’s report today on legal costs in England and Wales could see the end of the gravy train for claimant personal injury lawyers whose fees often exceed the damages awarded. The 584 page report includes recommendations to introduce fixed fees for claimant lawyers in personal injury claims up to £25,000.

In addition, success fees and after the event insurance premiums should no longer be recovered from the defendant as Lord Justice Jackson cites conditional fee agreements as the key driver of increased costs.

We can also expect to see an increase in general damages by some 10 per cent as compensation to claimants. However an increase in the small claims limit is not recommended at this stage.

Furthermore, a significant adjustment in personal injury claims to provide for ‘one way cost shifting’ is proposed. That will mean that defendants will continue to pay the costs of claimants who are successful (although those costs will now be fixed in the majority of personal injury cases) but claimants will not be expected to pay the defendant’s costs if they lose their case unless they have behaved unreasonably.

If introduced, the reforms will go some way to bring claimant lawyers legal costs in line with defendant lawyers who often work to fixed fees at half the cost. The move is also good news for insurers and for those who are self insured who would see the overall cost of personal injury claims significantly reduce.

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