The Jackson Reforms – What Insurers Need To Know

1 April 2013 sees the implementation of many of Lord Jackson's costs reforms. The 'Jackson Reforms' introduce a number of changes to the English litigation costs regime which will affect the overall cost of cases, including for insurers. Amongst the key changes which will be relevant for insurers are:

1. Solicitors' success fees and after the event (ATE) insurance premiums will generally no longer be recoverable from the paying party.

2. Referral fees in personal injury cases will be banned.

3. General damages (for pain, suffering and loss of amenity) will be increased by 10%. The laudable intention is that the reforms will result in greater control over and better management of litigation costs for everybody.

   One of the major changes to be implemented on 1 April 2013 is that solicitors' success fees when they act on conditional fee agreements (CFAs) will cease to be recoverable from the opponent as part of the costs of the action. Before the reform, a "success fee" could...