Costs under the Jackson Reforms

In my first seat in the Litigation and Dispute Resolution practice group, I have been given a great deal of responsibility in my day-to-day duties from attending application hearings in the High Court to drafting witness statements and particulars of claim.

During this brief time what has become apparent is a lawyer's fixation with costs, ensuring that they are on budget. A focus that has become necessary in this age of austerity where clients are ever more concerned with receiving value for money.

The position with legal costs is set to change dramatically from 1^st April 2013 when the first of the Jackson proposals are set to be implemented in an effort to tackle common concerns about legal costs.

The headline of these reforms is the shift away from Conditional Fee Agreements (CFA) or more commonly known as 'no win, no fee' agreements that have dominated certain areas of the legal marketplace in the last decade, not to mention television adverts.

The intended successor to the CFA is the Damage Based Agreement (DBA) in which solicitors and barristers claim fees from the damages that their clients recover in successful cases. The fees are therefore dependant upon the success of their client's case. The rationale behind this new arrangement, which has already been piloted in employment tribunal cases, is to incentivise law firms to undertake work where the client has no means to fund the case but the promise of potentially large rewards.

However, the chair of the Solicitors Regulation Authority (SRA), Charles Plant has voiced concerns that there is a risk of firms becoming potentially over-exposed to DBAs and thereby financially unstable. He confirmed that it is unlikely that the Code of Conduct will need to be amended but reminded firms that the SRA has the power to go into firms and review these agreements; in particular he commented that supervisory reviews in relation to DBAs are likely. The hope is that this will prevent lawyers from pursuing unsound business models.

Lord Jackson hopes that these reforms will redress the balance in terms of legal costs, ensuring that parties are on a more equal footing. This reform can also be seen as part of an overall scheme to boost access to justice, especially in the current climate of legal aid cuts and tighter public funding.

Here at B P Collins LLP we are committed to providing high quality legal services to our clients but also offering them a range of flexible funding options tailored to their requirements.

Posted by Benjamin McQueenie, trainee in the litigation and dispute resolution practice group. 



Benjamin started his training contract in November 2012. He previously worked as a paralegal within the litigation departments of two well-known Bristol firms, as well as a seasonaire in the French Alps.