The government’s plan to implement the key proposals made by Lord Justice Jackson for the reform of civil litigation costs and funding are included in five sections of Part 2 of the Legal Aid, Sentencing and Punishment of Offenders Bill.
The Bill was presented to Parliament on 21 June and the key proposals are:
- abolishing the recoverability of conditional fee agreement (CFA) success fees and after the event (ATE) insurance premiums. If the client wins, he will have to pay the CFA success fee and ATE insurance premium. ATE insurance covers the client’s liability to pay the other party’s costs if the client loses.
- removing the restrictions on contingency fees or "damages-based agreements" (DABs) for civil litigation. A DAB would allow the payment of fees if the client wins, the fees being calculated as a percentage of the sum recovered.
- introducing additional sanctions for defendants who fail to accept a claimant's reasonable Part 36 offer to settle.
An update on this legislation and the likely effect of these reforms on construction and engineering dispute resolution will be included in a future newsletter.
For advice or more information now, contact Steve McCombe or Eric Livingston.