UK: Reforming Civil Justice - England and Wales

Last Updated: 3 May 2011
Article by Denis Brock and Edmund Wan

Fifteen years after Lord Woolf published his recommendations for civil justice reform in England and Wales with his 'Access to Justice' report, the government is in the process of reviewing the civil justice system from different angles and making proposals for further reforms.

In 2009, Lord Young released a report entitled 'Common Sense - Common Safety', a review of health and safety, which was prompted by the growth in the litigation driven compensation culture in England and Wales. In 2010, Lord Justice Jackson's 'Review of Civil Litigation Costs' also made a number of recommendations for reform, and more recently the Ministry of Justice consulted on legal aid and civil funding and costs reform. The consultations on the latter closed in February 2011 and a response is expected in Spring 2011.

Consultation paper on the reform of the county courts

On 29 March 2011, the Ministry of Justice (MOJ) released a further consultation paper on reforming civil justice in England and Wales, called 'Solving disputes in the county courts: creating a simpler, quicker and more proportionate system.'

The aim of the proposed reforms is to provide 'just results delivered fairly, with proportionate costs and procedures and cases dealt with at reasonable speed', and to encourage people to resolve their own disputes through non-adversarial means. It is perceived that too many claims are being brought inappropriately, cases are being resolved too late, too expensively and with disproportionate costs. Administration and processes have become overly complex, bureaucratic and inefficient. In addition, the process for enforcing a judgment is slow and requires creditors to pay further fees and wait months without any guarantee of success.

The wider reforms and proposals

The broader reforms which the MOJ is proposing includes reform of legal aid and recommendations on civil funding and cost arrangements as set out in Lord Justice Jackson's review of costs in civil litigation. These include measures to reform Conditional Fee Agreements (CFAs) and restore the balance between claimants and defendants, which it is hoped will start to address the developing compensation culture. it is proposed to abolish the recoverability of success fees and associated costs in CFAs so that instead, claimants will have to pay their lawyers success fee which it is envisaged will encourage claimants to take an interest in controlling the costs being incurred on their behalf. It is also proposed that the ban on contingency fees will be lifted.

Significant proposals

Significant reforms proposed across the various reports and papers include:

  • encouraging alternative dispute resolution by requiring all cases below the small clams limit to have attempted settlement by mediation, and introducing mediation information/assessment sessions for claims above the small claims limit
  • a simplified claims procedure on a fixed costs basis, similar to that for road traffic accidents under GBP10,000 for more types of personal injury claims
  • a simpler and more effective enforcement regime
  • raising the small claims limit from GBP5,000 to GBP15,000
  • changing the County Court jurisdiction so that the High court is only used for bigger and more complex claims
  • creating a national county court jurisdiction across England and Wales to better enable cases and judges to be allocated and centralised processes to be used more widely
  • expanding the use of online systems to reduce waiting times and legal expenses
  • abolishing the general recoverability from the losing party of conditional fee agreement success fees and after the event insurance premiums
  • introducing an increase in general damages for non-pecuniary loss, such as pain, suffering and loss of amenity, by 10% in all civil wrong claims
  • introducing qualified one way costs shifting (so that a losing claimant only such of the defendant's costs as is reasonable to pay in all the circumstances) in personal injury claims
  • increasing the prescribed hourly rate recoverable by litigants in person.

Contingency fees

Many of the proposals are likely to be adopted and implemented. Some of the reforms will be welcomed and some will not. Perhaps one of the more far reaching and controversial changes will be the lifting of the ban on contingency fees.

Having weighed up the conflicting arguments, Lord Jackson concluded that the arguments in favour of contingency fees outweigh the arguments against and accordingly recommended that solicitors and counsel should be permitted to enter into contingency fee arrangements with their clients on a similar model to that adopted by Ontario, Canada. On that basis, costs shifting is effected on a conventional basis and in so far as the contingency exceeds what would be chargeable under a normal fee agreement, that is borne by the successful litigant. Lord Jackson has also recommended that contingency fee agreements should be properly regulated and they should not be valid unless the client has received independent advice.

Lord Jackson regards it as important that the client should have as many funding options as possible. He also sees the force of the freedom of contract argument.

However, it is admitted in the Government's 'Proposals for the Reform of Legal Aid in England and Wales' that there is 'considerable pressure on the Legal Aid Fund' and that 'reducing public spending is essential to economic recovery'. This philosophy may therefore also be behind the proposal to permit contingency fees since they would avail litigants who might otherwise not be able to afford legal fees and might otherwise be seeking pubic funding through legal aid.

Given that contingency fees will only be one option, it is yet to be seen how well they will be employed. There is a significant risk and exposure for lawyers who are prepared to offer to act on a contingency fee basis and it may well only be made available in the most open and shut of cases. Whether this proposal will therefore have any real impact it yet to be seen.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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