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Civil Justice Reform – the Never-Ending Story?

09/02/2016

Civil justice reform is hosting a party this spring – and everyone wants an invite. From debate around the Autumn Statement announcements to Briggs to Lord Justice Jackson, it seems as though no one can help but discuss how we should be improving the way in which civil claims are handled and compensated.

This is certainly no bad thing. There are inefficiencies and cost burdens in our system that other jurisdictions can’t complain of. LASPO went some way in attempting to address these issues, but with frequency back to pre-2013 levels, it is clear that tinkering around the edges cannot be the solution.

The Government clearly believe this to be the case. However, what we must understand is: how will these proposals work; what does the detail look like? And, perhaps more importantly, how – or even do - all of these pieces fit together?

Fixed recoverable costs are back on the agenda – and not just for clinical negligence. Lord Justice Jackson, in his lecture on 28 February to the Insolvency Practitioners Association, outlined how fixed recoverable costs successfully operate in Germany and New Zealand. While he acknowledges that this cannot be translated to England and Wales without appropriate modifications due to differences in civil procedure, it is interesting to note how different justice systems function. Jackson uses a stark example; a civil case in Germany with a value of €500,000 would attract a fee of €3,855.60. This seems extreme – but I suspect that if they learned of typical legal costs here for a similarly valued claim, the feeling may be mutual. Jackson’s proposed grid of costs provides more generous allowances, but is certainly a huge reduction on what is currently being charged. The Government have formally responded, confirming that the Ministry of Justice “remains supportive of the principle of extending fixed recoverable costs and will consider Lord Justice Jackson’s comment carefully”.

Lord Justice Briggs shares the current appetite for major reform. His vision for an online court has been revealed in the interim report of his Civil Courts Structural Review. Briggs himself admits that the online court is the “the single most radical and important structural change” with which he is concerned. It seems sensible, in this day and age, that we should harness the efficiencies of technology and incorporate them into our justice system. One of its main purposes will be to enable claimants to run their own cases: “In fact the true distinguishing feature of the OC [Online Court] is that it would be the first court ever to be designed in this country, from start to finish, for use by litigants without lawyers.” Whilst his provisional view is that personal injury claims should be excluded, the online court may be relevant for those claims soon to fall under the £5,000 small claims track limit.

This all seems to tie in nicely with where the Government are on these issues. The Autumn Statement announcements made it clear that lawyers need to be cut out of the process where appropriate; the incumbent increase in the small claims track limit says it all.

This can, on first glance, all be seen as hugely positive for insurers. Ultimately, these proposals all seek to address concerns on what are often unnecessary and disproportionate costs.

However, it’s a struggle to understand how and if this can all fit together. Timings are scattered:

  • The Government want to implement the reforms announced in the Autumn Statement by April 2017;
  • Jackson believes fixed recoverable costs can be accomplished by the end of 2016;
  • Briggs seeks to complete his review by 31 July 2016

Does the Ministry of Justice have the resource to implement this all – indeed if they even want to? How might any of these reforms affect the others? When will anyone see the benefit; will the insurance industry be able to deliver on its promise to deliver a £40/£50 saving per motor insurance premium?

And how does this tie into any potential legislative changes that will need to be made following the Department for Transport’s work to accommodate fully and semi-autonomous vehicles?

The next few months will be interesting to say the least. It’s true what they say – when it rains, it pours…

Samantha Ramen
Author

Samantha Ramen
Partner
Director of Market Affairs

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