PRACTICE DIRECTION 48 - PART 2 OF THE LEGAL AID, SENTENCING AND PUNISHMENT OF OFFENDERS ACT 2012 RELATING TO CIVIL LITIGATION FUNDING AND COSTS: TRANSITIONAL PROVISION AND EXCEPTIONS
|Transitional Provisions: General
|Insolvency-related proceedings and publication and privacy proceedings
|New provision in relation to clinical negligence claims
Sections 44 and 46 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (‘the 2012 Act’) make changes to the effect that a costs order may not include, respectively, provision requiring the payment by one party of all or part of a success fee payable by another party under a conditional fee agreement or of an amount in respect of all or part of the premium of a costs insurance policy taken out by another party. These changes come into force on 1 April 2013.
Sections 44(6) and 46(3) of the 2012 Act make saving provisions to the effect, respectively, that these changes do not apply so as to prevent a costs order including such provision where the conditional fee agreement in relation to the proceedings was entered into (or, in relation to a collective conditional fee agreement, services were provided to the party under the agreement), or the costs insurance policy in relation to the proceedings taken out, before the date on which the changes come into force.
The provisions in the CPR relating to funding arrangements have accordingly been revoked (either in whole or in part as they relate to funding arrangements) with effect from 1 April 2013; but they will remain relevant, and will continue to have effect notwithstanding the revocations, after that date for those cases covered by the saving provisions.
The provisions in the CPR in force prior to 1 April 2012 relating to funding arrangements include –
By virtue of section 48 of the 2012 Act, the changes relating to recoverable success fees and insurance premiums which are made by sections 44 and 46 of the Act may not be commenced, and accordingly will not apply, in relation to mesothelioma claims (defined by section 48(2) of the Act as having the same meaning as in the Pneumoconiosis etc. (Workers' Compensation) Act 1979) until such time as a review has been carried out and the conclusions of that review published. It will accordingly remain possible for a costs order in favour of a party to such proceedings to include provision requiring the payment of success fees and premiums under after the event costs insurance policies, and so the provisions of the CPR relating to funding arrangements as in force immediately prior to 1 April 2013 will continue to apply in relation to such proceedings, whether commenced before or after 1 April 2013. This will include the provision for fixed recoverable success fees in respect of employers' liability disease claims in Section V of Part 45 (CPR 45.23 to 45.26), which will otherwise cease to apply other than to claims in which a CFA was entered into or a costs insurance policy taken out before 1 April 2013).
On the later date when sections 44 and 46 are brought into force in relation to mesothelioma claims, the saving provisions of sections 44(6) and 44(3) will have effect in relation to funding arrangements in such claims as they do more generally, save that the operative date for the saving provisions will not be 1 April 2013 but the later date.
Sections 44 and 46 of the 2012 Act are not being commenced immediately in relation to certain proceedings related to insolvency. Until such time as those sections are commenced in relation to those proceedings, therefore, they are in a similar position as regards funding arrangements to mesothelioma claims.
Similarly, sections 44 and 46 of the 2012 Act are not being commenced immediately in respect of publication and privacy proceedings, which will accordingly be in a similar position as regards funding arrangements to mesothelioma claims and insolvency-related proceedings until such time as those sections are commenced in relation to them.
Section 46 of the 2012 Act enables the Lord Chancellor by regulations to provide that a costs order may include provision requiring the payment of an amount in respect of all or part of the premium of a costs insurance policy, where –
(a) the order is made in favour of a party to clinical negligence proceedings of a prescribed description;
(b) the party has taken out a costs insurance policy insuring against the risk of incurring a liability to pay for one or more expert reports in respect of clinical negligence in connection with the proceedings (or against that risk and other risks);
(c) the policy is of a prescribed description;
(d) the policy states how much of the premium relates to the liability to pay for such an expert report or reports, and the amount to be paid is in respect of that part of the premium.
The regulations made under the power are the Recovery of Costs Insurance Premiums in Clinical Negligence Proceedings Regulations 2013 (S.I. 2013/92). The regulations relate only to clinical negligence cases where a costs insurance policy is taken out on or after 1 April 2013, so the provisions in force in the CPR prior to 1 April 2013 relating to funding arrangements will not apply.