The long-awaited final report from Lord Justice Jackson on costs in civil litigation was published on 14 January. Whilst the recommendations will have less impact on costs in high value commercial litigation than in other areas of civil litigation (such as personal injury), they are still potentially very significant.

Some of the key recommendations are:

  • Lawyers and their clients should be permitted to enter into contingency fee arrangements (where the client funds its case out of the damages), although such agreements should be regulated.
  • It should no longer be possible for the winning party to recover success fees and after the event (ATE) insurance premiums from the losing party where conditional fee arrangements (CFAs) are in place.
  • Success fees in CFAs should be capped at 25% of the damages.
  • A defendant that fails to do better at trial than a Part 36 offer that is made before trial should suffer the additional penalty of having the damages increased by 10%.
  • There should be more judicial responsibility for controlling costs generally.

The report follows a year of detailed consultation with the profession and other stakeholders and the recommendations are expected to generate much debate in the coming months.

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