Litigation Costs and Before-the-Event Insurance: The Key to Access to Justice?

Modern Law Review

Volumn 74, Issue 2, 2011, Pages 272-286

  Lewis, Richard ^a  

^a CARDIFF UNIVERSITY   (United Kingdom)

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EID: 79959686322     PISSN: 00267961     EISSN: 14682230     Source Type: Journal    
DOI: 10.1111/j.1468-2230.2011.00846.x     Document Type: Article

References (66)

1. R. JacksonLJ, Review of Civil Litigation Costs: Final Report (London: Judiciary of England and Wales,), and R. Jackson LJ, Civil Litigation Costs Review - Preliminary Report by Lord Justice Jackson (London: Judiciary of England and Wales, 2009). The review was commissioned by the Master of the Rolls, Sir Anthony Clarke, in November 2008 and speedily completed in a year2010
2. Lord WoolfAccess to JusticeFinal Report to the Lord Chancellor on the Civil Justice System in England and Wales (London1996
3. A. S. Zuckerman'The Jackson Final Report on Costs - Plastering the Cracks to Shore up a Dysfunctional System2010293Civil Justice Q 263-283, and contrast M. Lyons, "Jackson - An Initial Response" [2010] J Personal Injury Law74-92
4. Lord YoungCommon Sense Common Safety (2010). This is a report to the Prime Minister following a Whitehall-wide review of the operation of health and safety laws and the growth of the compensation culture, and at p 22 it recommends that Jackson's proposals be adopted as soon as possible2010
5. Ministry of Justice, Proposals for Reform of Civil Litigation Funding and Costs in England and Wales (Consultation Paper CP13/10) (Cm 7947) (London: Ministry of Justice, 2010) section 1.12010
6. In the Ministry of Justice Consultation Paper ibid the Government proposes further substantial cuts to legal aid amounting to £350 million to help to provide a real reduction of 23% in the Ministry's budget by2014
7. S. Hynes and J. RobinsThe Justice GapWhatever Happened to Legal Aid (London: Legal Action Group2009
8. This is actually a 7 per cent increase compared to two years previously, but this reflects only a downturn in the economy not an increase in eligibility rates. See Final Report n 1 above p 68 para 3.1
9. D. MarshallA Short History of the Costs Wars2010204
10. The Conditional Fee Agreements Order 1995 SI No 1674 made under the Courts and Legal Services Act1990
11. In practice in nine out of ten personal injury cases the uplift in fees is limited by industry wide agreements. In road traffic accident cases it is restricted to 12.5%, in employment accident cases to 25%, and in employment disease cases to 27.5%. Civil Procedure Rules Part 45 sections III, IV and V. G. Wignall (ed) Conditional Fees, a Guide to CFAs and Litigation Funding (London: The Law Society2008
12. Zuckerman n 3 above264
13. Final Report n 1 above, para 3.26
14. Final Report n 1 above, para 4.19
15. Final Report n 1 above, para 2.2
16. Final Report n 1 above para 4.7
17. Final Report n 1 above, para 5.3
18. J. ChamberlainStewart's Law Response to Jackson on Costs."
19. The amount was fixed as £800 plus 20% of damages agreed up to £5,000 and 15% of damages agreed between £5,000 and £10,000. A new streamlined system involving online procedures was introduced in April 2010 with recoverable costs set at three stages in the process by the Civil Procedure (Amendment) Rules 2010 SI No 621.
20. Final Report n 1 above, para 5.8
21. Final Report n 1 above, para 5.1
22. Ministry of Justice Consultation Paper, n 5 above, section 3.1. The Legal Services Board is considering the role and impact of referral fees on costs and access to justice within its field. It has provisionally concluded that there is no compelling case for banning them and that it is arguable that they have improved access to justice. See its Discussion Document, Referral Fees, Referral Arrangements and Fee Sharing (September,) para 5.1. In contrast Lord Young in his Report Common Sense Common Safety (2010) 20 strongly supports Jackson's proposal that such fees be banned2010
23. Final Report n 1 above, para 5. 1. For an earlier discussion see the Ministry of Justice, Regulating Damage Based Agreements - A Consultation Paper CP10/09 (London: Ministry of Justice, 2009). This resulted in the Damages-Based Agreement Regulations 2010 SI No 12062010
24. R. MoorheadAn American Future Contingency FeesClaims Explosions and Evidence from Employment Tribunals2010735752-784
25. Final Report n 1 above, para 4.3
26. Final Report n 1 above, para 2.7
27. Preliminary Report n 1 above, para 4.5
28. Final Report n 1 above, para 7.1
29. A.E. HoldsworthThe Experience in England' in W. Pfenningstorf and A.M. Schwartz (eds), Legal Protection Insurance (1986, American Bar Foundation, Chicago) 14 and M. Kilian, 'Alternatives to Public Provision: The Role of Legal Expenses Insurance in Broadening Access to Justice: The German Experience2003301J Law and Society31-48
30. FWD, The Market for 'BTE' Insurance (London: Ministry of Justice2007
31. Mintel, Legal Expenses Insurance (London: Mintel2008
32. Better Regulation Task Force, Better Routes to Redress (London: Cabinet Office Publications, 2004), A. Morris, 'Spiralling or Stabilising The Compensation Culture and our Propensity to Claim Damages for Personal Injury' (2007) 70(3) Modern Law Review 349.The most recent report is that of Lord Young, Common Sense Common Safety (2010) op cit above n 4. Although he concludes that compensation culture is a problem of perception rather than reality, he nevertheless suggests claims have been too easily encouraged and that this has been fuelled by the funding changes that have been made2004
33. R. Lewis A. Morris and K. OliphantTort Personal Injury Claim Statistics: Is There a Compensation Culture in the UK' (2006) 14(2) Torts Law Journal 158 and [2006] J Personal Injury Law 87. Hand, 'The Compensation Culture: Cliché or Cause for Concern2010374J Law and Society569
34. The current figure is published by the Compensation Recovery Unit The 1973 figure was estimated by the Report of the Royal Commission on Civil Liability and Compensation for Personal Injury (1978, cmnd 7054) vol 2 paras 59 and 63, chairman Lord Pearson1978
35. P. BartripNo-Fault Compensation on the Roads in Twentieth Century Britain' (2010) 69 Cambridge Law Journal 263-286. See also the road accident proposals in the Report of the Royal Commission on Civil Liability and Compensation for Personal Injury (1978, cmnd 7054) chairman Lord Pearson. Lord Neuberger MR recently has argued that no-fault should again be examined by policymakers if we fail to achieve proportionate costs in personal injury litigation2010
36. Note 34 above and associated text
37. at paras 123 et seq
38. Report n 1 above, para 2.5
39. But see n 23 above and associated text
40. H. BlundellFree to ChooseBTE Legal Expenses Insurance and Freedom of Choice2004J Personal Injury Law93
41. M. HarveyBefore the Event Legal Expenses Insurance - Why do so Many Seek to Close This Access to Justice Gate2010J Personal Injury Law93
42. P. SmithPanel Solicitorsthe Legal Expense Insurer's Perspective2004143
43. For the success of such specialist firms see H. Genn, Hard Bargaining: Out of Court Settlements in Personal Injury Actions (Oxford: Clarendon Press1987
44. J. Rowley2010J Personal Injury Law C35. Contrast the evidence given to Jackson by the Law Society. Report n 1 above para 6.2
45. Directive 87/334, Legal Expenses Directive (1987) OJ L185/77, is supported domestically by the Insurance Companies (Legal Expenses Insurance) Regulations 1990 SI No 11591987
46. P. AbramIn Sure Hands (London: University of Westminster2002
47. Report n 1 above, para 6.3
48. Report n 1 above, para 3.3
49. Sarwar v Alarm20021 WLR125
50. Abram, n 45 above
51. J. RobinsShopping AroundWhat Consumers Want from the New Legal Services Market (LondonJures Publications2010
52. Preliminary Report n 1 above, para 2.1
53. See the current adverts in the journal Litigation Funding and the general discussion in the Preliminary Report n 1 above para 2.3
54. FWD, The Market for 'BTE' Insurance (2007, Ministry of Justice) at 4A II 4
55. Final Report n 1 above, para 3.18
56. N. RoseCrunch Time on Referral Fees201067Litigation Funding 3 and see above n 22
57. Sarwar v Alarmn 48 above; and see the Solicitors Regulation Authority, Solicitors' Code of Conduct (2007) para 2.03(i)(d)(ii)2007
58. Chamberlain n 18 above. Most insurers use CFAs according to J. Robins, 'Before the Deluge' 69 Litigation Funding 62010
59. Sarwar v Alarm n 48 above
60. Most recently, the failure to inquire into BTE was ignored in relation to success fees, but not ATE, claimed under a CFA in a low value case in Kilby v Gawith 1 WLR 853. Jackson would reverse this decision and make BTE relevant to the success fee. Final Report n 1 above para 5.26. See also J. Rowley, 'Is it Too Soon to Reconsider Prematurity' [2010] J Personal Injury Law 392009
61. Case C-199/08 Eschig v Uniqua Sachversicherung [2009] ECR I-82952009
62. N. KinsellaEvolution not RevolutionJ. Robins (ed), Closing the Justice Gap (London: the Solicitors Journal2010
63. Justice Minister's article, Henry Bellingham, 'Worth Fighting For' in Robins (ed) ibid
64. n 4 above, at 22
65. n 5 above, section 3.5
66. According to Compensation Recovery Unit figures road accidents constitute 78 per cent of all claims for personal injury that are made. See note 34 above and associated text