Lord Justice Jackson’s Review of Costs Martyn Gabbitass ACII ACILA Technical Director QuestGates Ltd

Key Themes: Funding of Litigation (costs) Uplift on general damages (10%)

Costs Issues Arising: Qualified one way costs shifting. No recovery of additional liabilities between the parties. Banning of referral fees. Fixed costs across personal injury fast track. Part 36 proposed enhancement. Costs Council.

Qualified one way costs shifting: What does it mean? Claimant does not pay Defendant’s costs if claim unsuccessful. Defendant pays Claimant’s costs if it is successful. Exceptions: - unreasonable behaviour. - financial resources available to the parties

No recovery of additional liabilities between parties: What does it mean? Success fees and ATE insurance premiums no longer recoverable. Claimants can still agree ‘no win/no fee’ with their Solicitors but success fee met by Claimant not Defendant.

Banning of referral fees: What does it mean? Exactly what it says on the tin! No referral fees in personal injury claims.

Fixed costs across personal injury fast track: What does it mean? Fast track limit £25,000. Also, where Trial limited to one day. Costs to be fixed.

Part 36 amendments: What does it mean? Defendants to be incentivised. Where Defendant fails to beat Claimant’s offer, Claimant can recover an enhancement by factor of 10%.

Costs Council: What does it mean? To be established to support Fast Track fixed costs regime. Regular reviews of fixed costs. Defendants i.e. Insurers need to be strongly represented on Costs Council.

Summary: Probable outcome: Claimant damages enhanced. Costs payable by Defendants greatly reduced absent success fees & ATE premiums. ‘Winners & Losers’ – but package to be accepted as a whole, otherwise unworkable.