Jackson PI winners and losers

Litigation Funding for December reported on the revealing of some of Professor Paul Fenn’s calculations about the personal injury winners and losers if Lord Justice Jackson’s proposals for the end of recoverability combined with a 10% increase in general damages and one-way cost-shifting are implemented. Litigation Funding said that the latest figures, based on 630,998 claims, were put together after publication of the final Jackson report on the costs of civil litigation and the judge had expected the Ministry of Justice to publish them with its green paper on implementing the report. In the absence of that he has provided a chart indicating that 61% of claimants will be as well or better off and 39% worse off, with road traffic accident claimants doing particularly well and the majority of employer’s and public liability claimants being worse off. Lord Justice Jackson commented: ‘These figures must be read subject to an important qualification. Success fees in PI litigation are fixed by CPR Part 45 according to the type of litigation and the stage at which it settles. The proposed fixed costs in chapter 15 and appendix 5 (of his report) also include a matrix of fixed success fees. Professor Fenn’s calculations are likewise based upon fixed success fees. However, if my entire set of recommendations in this area is implemented, then success fees will be deregulated and solicitors will compete for business, not on the basis of who can pay the largest referral fees, but rather on the basis of who can charge the lowest success fees. In my view, the consequence will be to drive down success fees substantially at the expense of referrers, not at the expense of solicitors. As a result, out of the three-quarters of a million or so PI claimants per year, as substantially more than 61% will be winners and substantially fewer than 39% will be losers.’