Civil justice reforms
IntroductionIn April 2013, the Government brought in reforms to civil litigation funding and costs in England and Wales. These concerned the way that civil cases are funded, and the costs involved in bringing those cases. These reforms were in part as a result of changes in legislation (Part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 - 'the LASPO Act') which came into effect on 1 April 2013.
The reforms apply across civil litigation, but have a particular impact in personal injury cases, where no win no fee conditional fee agreements (CFAs) are used significantly.
The main changes are summarised below, and some of the issues are explained in more detail under the Main changes page. It should be noted that this is intended as a brief summary of the changes, which are set out in the primary legislation - the LASPO Act - and secondary legislation including the Civil Procedure Rules.
The summary here does not have any legal status; it will be necessary to consult the legislation for details of the new provisions.
Summary of key changes
- No win no fee CFAs remain available in civil cases, but the additional costs involved (success fee and insurance premiums) are no longer payable by the losing side.
- No win no fee damages based agreements (DBAs) are available in civil litigation for the first time.
- Referral fees are banned in personal injury cases.
- The introduction of new protocols extending the Road Traffic Act personal injury scheme to £25,000.
- A new fixed recoverable costs (FRC) regime.
- Claimants' damages are protected: the fee that a successful claimant has to pay the lawyer - the lawyer's 'success fee' in CFAs, or 'payment' in DBAs - is capped at 25% of the damages recovered, excluding damages for future care and loss
- General damages for non-pecuniary loss such as pain, suffering and loss of amenity are increased by 10%
- A new regime of 'qualified one way costs shifting' (QOCS) is introduced in personal injury cases which caps the amount that claimants may have to pay to defendants. Claimants who lose, but whose claims are conducted in accordance with the rules, are protected from having to pay the defendants costs.
- A new sanction on defendants to encourage earlier settlement of claims.