Jackson reforms one year on: Don’t be late (or early)

A year on from the introduction of the Jackson Reforms, launched as a way to curb claims made through “no-win no-fee” cases, Lancashire-based law firm Marsden Rawsthornhas become aware of a sharp rise in the number of claims and defences being struck out for failure to comply strictly with timetables set by the courts.

According to Marsden Rawsthorn, this rise is a result of a much stricter line from judges across the country in adhering to the timings laid out for processing a claim for damages, as one of the abiding legacies of the wide-ranging changes introduced on 1 April 2013.

The Jackson Reforms have changed the landscape for damages claims over the past year, ending claims management practices that were considered unpalatable by many in the legal profession, including referral ‘kick-backs’ from solicitors to claims management companies. The end of such referral fees has reduced the fixed costs recovered in most personal injury claims by around two thirds and fixed fees were also introduced for public and employer liability claims.

Charles Maher from Marsden Rawsthorn’s Dispute Resolution Team explains: “The Jackson Reforms were introduced following a review into procedure and practice by Lord Justice Jackson and were aimed at speeding cases through the system and reducing costs.

“While the changes have had many positive outcomes for claimants, they have also seen a culture change in the legal system, with judges now much stricter on process. So, whereas previously we could expect to see some flexibility in terms of submitting documentation to court, claimants are now routinely penalised for late submissions and, theoretically, they could even be penalised for submitting early!

“It’s important, in view of this, that claimants do not start court proceedings until everything is completely ready, otherwise the net result could be a lot of wasted time and expense.”

The reforms also included major changes to the rules surrounding ‘no-win no-fee’ insurance policies and claimants’ solicitors’ success fees. Defendants’ insurers are no longer required to pay success fees in the event of a successful claim in return for foregoing costs in the event of a failed claim. This has led to a typical increase in damages of around 10% to enable successful claimants to pay the success fee from the monies awarded by the court. However, there are strict rules in place to prevent lawyers from taking more than 25% of the damages payment.

“Of course,” Charles continues, “the issue of costs doesn’t affect all claims as, alongside the Jackson Reforms introduced last April, the small claims limit at the County Court was raised from £5,000 to £10,000 (remaining at £1,000 for personal injuries), and costs are not generally awarded between the parties at small claims court, no matter who wins or loses.

“However, in cases worth more than £25,000, each party is now obliged to provide a detailed costs budget at least seven days before the first procedural hearing. If this is not ready on time, the judge can disallow all costs, even if the party in breach is successful.

“Recently the Rules Committee has confirmed that parties will shortly be allowed to agree extension times of up to 28 days for the exchange of witness statements, for example, to avoid satellite litigation which, since the reforms were introduced, had been clogging up the courts. “Our advice to all those considering dispute litigation, therefore, is to make sure they are ready before they proceed to issue court proceedings because, in the post Jackson Reform legal system, there is little tolerance for late documentation despite the proposed rule change .”