UK: Review Of Civil Litigation Costs – Lord Justice Jackson’s Final Report

Last Updated: 20 January 2010
Article by Barlow Lyde & Gilbert LLP

The highly anticipated final report of Lord Justice Jackson was published on 14 January 2010, proposing substantial reforms to costs in civil litigation matters. The thoroughness of this fundamental review is very much to be welcomed in view of the highly publicised problem of escalating litigation costs in this jurisdiction. The length of the final report (some 584 pages), however, indicates the complexity of the issues faced in tackling this area.

Jackson LJ's proposals potentially affect almost every area of civil litigation ranging from small personal injury matters to high value complex commercial litigation. We highlight some of the key proposals contained in his review.

Success fees and ATE insurance

One of the most dramatic reforms proposed by Jackson LJ in his final report is that success fees payable by clients to lawyers under Conditional Fee Agreements (CFAs) and After The Event (ATE) insurance premiums paid to insurers to cover the adverse costs of civil litigation should no longer be recoverable from the other side if the client wins the case. He highlights various flaws with the current recoverability regime, including the potential for so-called 'super claimants' in commercial claims to transfer most of the costs burden of litigation to the other party using a combination of CFAs, ATE premiums and perhaps even third party funding.

He argues that ending recovery from the other side will lead to significant costs savings, whilst still enabling those who need access to justice to obtain it: CFAs and ATE insurance would still be available but claimants would have to meet their cost out of their damages if successful. In recognition of the importance of ensuring that successful litigants are properly compensated, and recognising that the success fee and premium will have to be paid out of the damages awarded to the claimants, Jackson LJ proposes an increase to individual claimants' damages and a success fee cap of 25 per cent of damages on success fees in personal injury cases.

Although Jackson LJ considers that these reforms are important, he does propose alternative reforms: these are to more closely control the recoverability of success fees and ATE insurance premiums, in the event that it is concluded that it is not possible to "turn back the clock" and repeal the statutory provisions which currently permit recoverability.

Costs shifting

In tandem with his recommendations on the recoverability of ATE premiums, Jackson LJ makes significant recommendations on litigants' liability for adverse costs, with the aim of reducing the need for ATE insurance policies in the first place. Whilst the Judge says in his report that the 200-year old "loser pays" principle should not be abolished altogether, he suggests that it could be abandoned in some areas and replaced by qualified 'one-way' cost shifting - whereby successful claimants would recover their reasonable costs but successful defendants would not recover theirs.

The categories of litigation which should benefit from qualified one-way costs shifting will be a question for further consultation. However, Jackson LJ considers that claimants in personal injuries and clinical negligence litigation require protection against adverse costs orders, while in commercial, construction and similar litigation there should be no such special rules. He does not favour any change to costs shifting for collective actions save in personal injury cases; costs shifting can, he says, reduce access to justice, but it may also have the effect of weeding out unmeritorious claims.

Fixed costs for fast track cases

Lord Justice Jackson proposes a fixed-costs regime for all cases allocated to the fast track (in general the track for claims valued between £5,000 - £25,000) including personal injury claims for which he has drawn up matrices of fixed costs. This could lead to a potentially significant reduction in the cost of lower value personal injury claims. It is also suggested that future consideration is given to the possibility of introducing fixed or scale costs across the lower reaches of the multi track (generally claims valued over £25,000).

Referral fees

Jackson LJ recommends that solicitors be banned from paying referral fees for cases. If implemented, this has the potential to reduce significantly the number of personal injury claims. This recommendation, however, might be very controversial and difficult to implement.

Contingency fees

The report recommends that both solicitors and barristers should be able to enter into contingency fee agreements with their clients. Contingency fee agreements, which are fees payable if the client wins and which are calculated as a percentage of the sum recovered, are currently banned for contentious business. However, Jackson LJ considers that it is desirable that as many funding methods as possible are made available to litigants, including contingency fees. However, he recommends that costs should only be recoverable against opposing parties on the conventional basis, and not by reference to the contingency fee. He also supports the view that contingency fee agreements should be properly regulated, and only valid where the client has received independent legal advice and that the percentage of damages the lawyers can take should be capped.

Third party funding

Jackson LJ comes out firmly in favour of third party funding of litigation in principle, saying that is beneficial to access to justice. He recognises that the funding market is at an early stage of its development. He accepts that external regulation of funders may well become necessary as the market develops, but considers that for now a voluntary funders' code is sufficient protection for clients (though he proposes some specific changes to the draft Civil Justice Council code to ensure the capital adequacy of funders and to protect clients from funders withdrawing from agreements).

He sees no need for any fundamental change to the law of maintenance and champerty as such. He does, however, recommend a change to the rule (derived from the Arkin case) that a funder's exposure to the costs of its opponent, if the claim it has funded fails, is limited to the amount of its own costs investment. The report recommends that the law should be changed so that the funder is potentially exposed to the full extent of the successful opponent's costs subject to the court's discretion.

Procedural changes

Lord Justice Jackson has made the following key recommendations to control the costs of litigation:

  • retention of pre-action protocols but the abolition of the general Practice Direction - Pre-Action Conduct which adopts an unsuitable "one size fits all" approach
  • further encouragement of alternative dispute resolution (ADR)
  • strengthening the sanctions for failure by a defendant to beat a claimant's offer by enhancing the claimant's recovery by 10 per cent
  • introducing a wide "menu" of options for disclosure orders in large commercial cases and cases where standard disclosure might be disproportionate, ranging from dispensing with disclosure to ordering disclosure of documents which may lead to a train of enquiry
  • standard disclosure to be retained for personal injury and medical negligence cases
  • approval of a new Practice Direction on E-Disclosure and increased training for lawyers and judges in this area
  • greater control of the content and length of witness and expert statements by use of cost sanctions
  • wider use of e-working by issuing proceedings and filing documents at court on-line

Implications for Commercial Court

Lord Justice Jackson has recognised that, due to the importance of international work to the Commercial Court, it is important not to make procedural changes which will render London unattractive to commercial parties from overseas. He also notes that there is a high general level of satisfaction amongst Commercial Court users with the service of the Court and that costs are proportionate.


Jackson's thorough review of the area is commendable, and some of his proposals have the ability to make a very practical and positive change to litigation in England and Wales. But what is the chance that these proposals will become actual law? Where only changes to the Civil Procedure Rules are required, the proposals may be able to be implemented relatively quickly. However, some of the more radical proposals will require changes to legislation, and with a general election later this year, it is questionable whether changes to civil litigation will be a priority at the present time. Nonetheless, Jackson's report makes important reading for anyone involved in civil litigation.

*Highlights of what would be in and out if Jackson LJ's recommendations are implemented

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.