Future "Jackson" Changes

In March 2011 the government announced major changes to the way in which ATE Insurance policies would be dealt with in civil litigation. The announcement was the culmination of a general review of civil litigation published by Lord Justice Jackson in January 2010 and a consultation carried out by the Ministry of Justice between November 2010 and February 2011.

The proposals were wide-ranging and affected both legal aid and many areas of civil litigation but the key proposals in relation to personal injury claims and ATE Insurance policies were:

• It proposed that in all civil litigation, neither the cost of an After The Event Insurance policy nor the success fee which a solicitor charged his client, would now be recoverable by the winner from the loser.
• It made special provision for personal injury cases:
  
  - Claimants would receive an extra 10% general damages to help them pay their solicitor’s success fee.
  - An unsuccessful claimant would not have to pay the defendant’s costs unless:

the claimant had behaved unreasonably
the claimant was wealthy
the claimant had not recovered more than the defendant had previously offered (had not "beaten a Part 36 offer")

The government intends these changes to be introduced in April 2013. The debate surrounding these proposals has not yet been concluded and the precise rules which will follow have not yet been published. It is apparent however that under these proposals, claimants will continue to face significant financial risk both in relation to the costs which may be awarded against them and in relation to their solicitor’s own disbursements. Box Legal will therefore continue to arrange ATE insurance policies in order to satisfy what is likely to be a continuing high demand for insurance against those risks.