The UK Ministry of Justice (MoJ) is proposing significant changes to the framework of civil litigation funding and costs in the UK. Their report expresses concern at the high costs of civil litigation in the UK and is subsequent to Lord Justice Jackson's December 2009 report Review of Civil Litigation Costs.
To view a Guardian article by Leigh Day & Co partner Richard Meeran on the potential effect of these proposed costs reforms on litigation against multi-national companies, please click here.
Central to the MoJ proposals is the abolition of the recovery of Conditional Fee Agreement (CFA) success fees from unsuccessful defendants. In the UK, where a claimant has entered into a CFA, an unsuccessful defendant is liable for a "success fee", which is payable to the claimant's lawyer. This can be fixed at up to 100% of legal fees.
The MoJ report recommends that the CFA-funded party pay any success fee due. This is designed to encourage the CFA-funded party to control costs.
To counter-balance the effect of this amendment for personal injury and clinical negligence claims, the MoJ also proposes to introduce Qualified One-way Costs Shifting (QOCS). This means that an unsuccessful defendant will only be exposed to an adverse costs award where they have the financial resources to cover it or their misconduct justifies it.
Notably, the MoJ has not proposed the implementation of QOCS in relation to judicial reviews. The Public Law Project (PLP), an NGO which aims to improve access to public law remedies in the UK, has sent a letter before claim to the MoJ challenging this exclusion. To view the letter, please click here.
PLP submit that the MoJ proposals will result in a "significantly detrimental effect upon the ability of the ordinary individual, the representatives of civil society and the public interest to obtain access to justice in this constitutionally vital area". They allege that the UK government has given "no specific consideration to judicial review...its constitutional importance, the asymmetry in relationship between the parties, the changes to legal aid...the Aarhus Convention obligations...the uncertainty of the law on Protective Costs Orders, the unique permission filter, the role of representative and civil society organisations...". To view the PLP press release, please click here.
Readers of the Bulletin may recall that the Coalition for Access to Justice for the Environment has claimed that QOCs in all environmental cases would be the only way to ensure full compliance with the Aarhus Convention. Additionally, the EU Commission has recently referred the UK government to the European Court of Justice for its alleged failure to comply with the Aarhus Convention. Please click here to view a press release by environmental law firm Client Earth on this.