Posts made in June, 2009

Jackson Costs Review – Part 1 – Introduction

By on Jun 4, 2009 | 0 comments

Lord Justice Jackson’s Preliminary Report on Civil Litigation Costs was published on 8 May 2009. I did not immediately rush to comment on this report for three reasons: The Report runs to almost 700 pages plus appendices and takes some reading. Given the importance of this report to the future of the legal costs system it seemed appropriate to give some time to reflect on the Report before rushing to reach any conclusions. I was on holiday when the Report was first published. The first thing to note about this report is how truly masterful it is in its scope, clarity and ambition. Jackson LJ, and those who have assisted in its writing, are to be congratulated on their work. If nothing else, large sections of this report should be compulsory reading as an introduction to the basics of the current costs system. Over coming posts I will comment on key aspects of this report. These will focus on the elements that will potentially have the widest impact on the legal profession. Inevitably, this will mean some important but niche areas, such as defamation, will not be covered. Jackson LJ is under no illusions when he states in his opening comments to the Report: “Whatever I may recommend at the end of this year (and at this stage I still have an open mind) one thing is inevitable. My final report will generate protest from at least some directions and quite possibly all directions. … This report does not reach any firm conclusions”. This passage contains two important warnings. Firstly, the Preliminary Report is intended to do no more than set the background and identify the issues that need to be determined. The Report does contain some tentative conclusions and one could read too much or too little into these. However, nothing has yet been decided. Secondly, Jackson LJ does not seem to be afraid to upset certain groups and no doubt sees such an outcome as an inevitable part of any proper overhaul of the current system. His comment that: “The personal injury litigation industry is populated by numerous interest groups and middlemen, all of whom have to meet their overheads and make a profit on top. If...

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ATE premiums – What impact market forces?

By on Jun 2, 2009 | 0 comments

The heart of the problem concerning ATE premium levels was identified recently by Paul Ashurst writing in the New Law Journal: "one party buys insurance cover without handing over any cash and then hands the bill to the other party, who has no say in selecting either the cost or provider". The self-insuring deferred premium, which has become the norm, is central to this problem. Although this is a wonderful product from a claimant’s perspective, it removes any real market force from the system. Lord Justice Jackson’s Preliminary Report on Civil Litigation Costs recognised this problem: "An issue which is sometimes raised is whether ATE premiums generally are unduly generous to insurers. In any given case, the insured demonstrates to the court the reasonableness of the premium paid by producing a statement as contemplated by the Court of Appeal in Rogers v Merthyr Tydfil CBC [2006] EWCA Civ 1134. That, however, is separate from the wider question of whether ATE premiums generally are too high or about right. In relation to this issue, insurers make the point that there are now 36 ATE providers (insurers and agents/intermediaries) active in the field. They contend that market forces bring premiums down to a proper level. This argument may have more force in relation to personal injury and clinical negligence litigation (where many insurers offer cover) than in relation to niche areas (where fewer insurers are competing for business). On the other hand, it has been suggested that the decision in Callery v Gray approving a figure as a reasonable premium in road traffic cases at the time has set that figure as a base-line and has resulted in the eradication of downward pressure in the market; and that the requirement for a Rogers v Merthyr Tydfil statement does not in practice ensure that premiums are competitive". Later the Report observes: "In Callery v Gray (Nos 1 and 2) [2002] UKHL 28 Lord Hoffmann expressed the view that no market forces restrain the levels of ATE premiums. At paragraphs 43-44 he said this: ‘ATE insurers do not compete for claimants, still less do they compete on premiums charged. They compete for solicitors who will sell or recommend their product. And they compete...

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