The costs reforms proposed by the ‘Jackson’ report on the litigation system have been postponed until April 2013. The changes which are contained in part 2 of the Legal Aid, Sentencing and Punishment of Offenders Bill have been deferred for 6 months (in line with the reforms contained in part 1 of the Bill).
Part 2 of the Bill changes the law on costs and funding in litigation. In particular it ends the recoverability of success fees in no win no fee agreements and ‘after the event’ insurance premiums. The Law Society has criticised these reforms, alongside the planned cuts to legal aid, found in part 1 of the Bill. They have launched a campaign entitled “Sound off to Justice.”
In a letter to many senior lawyers, the Chief Executive of the Law Society said “We passionately believe that the cuts to legal aid and the proposed changes to litigation costs and funding will cause many unintended consequences to families, individuals and businesses in the UK. Moreover, we think they fail at a basic financial level, leading to extra costs to government in other departments.”
A Spokesperson from the Ministry of Justice commented on the delay saying ‘We are committed to reforming the ‘no win, no fee’ system so that legal costs for reasonable compensation claims will be more proportionate, and avoidable claims will be deterred from going to court. This will require changes to legal rules and regulations and we want to give sufficient time to get the complex details right.’
The delay has been welcomed by many of the opposition to the reforms who believe it offers the chance to reflect fully on the implications before they are implemented.