“In some areas of civil litigation costs are disproportionate and impede access to justice. I therefore propose a coherent package of interlocking reforms, designed to control costs and promote access to justice.”
“Section 44 … a costs order made in proceedings may not include provision requiring the payment by one party of all or part of a success fee payable by another party under a condition fee agreement. Section 46 … a costs order made in favour of a party to proceedings who has taken out a costs insurance policy may not include provision requiring the payment of an amount in respect of all or part of the premium of the policy, unless such provision is permitted by regulations under sub-section (2).”
“Sections 44 and 46 may not be brought into force in relation to proceedings relating to a claim for damages in respect of diffuse mesothelioma until the Lord Chancellor has a) carried out a review of the likely effect of those sections in relation to such proceedings, and b) published a report of the conclusions of the review.”
“Given the importance of the changes we are making in part 2, given the concerns that have been expressed about their impact on access to justice, and given that these matters may look very different indeed in some legal contexts in the light of experience after these changes are made, it is surely wise to add to the Bill a power for the Lord Chancellor whereby it would be entirely within his discretion to modify the effect by excluding categories of cases.”
“I understand the noble Lord’s intentions. I understand that he thinks it sensible to allow for exceptions to be made at a later date. However, we are legislating now and [on] what we consider to be a fair and overdue basis. Funding arrangements need a degree of certainty. Claimants and defendants need to be able to plan and adapt to the new regime. The amendment would only create uncertainty. … Rather than settling the issue of CFAs, as this bill seeks to do, the amendment would open the door to constant campaigning and calls for individual exceptions. The amendment may be well-intentioned but it is fraught with difficulty. It would provide uncertainty and confusion where we are seeking to introduce clarity. It would provide increased costs where we are seeking to reduce costs. It is wrong in principle and unnecessary. I urge the noble Lord to withdraw it.”
“Parliament was emphatic on this point: it firmly rejected the possibility of allowing for the discretionary extension of categories of claim to be excluded from the LASPO Part 2 reforms at a later date.”
“The Government has been given little indication at the present that the LASPO part 2 reforms are resulting in difficulties in other cases to which they already apply. The position will be monitored as part of the intended post-implementation review of the LASPO Act within three to five years of implementation.”
“The content and purpose of a post-implementation review is different to a post legislative memorandum: post- implementation reviews are primarily concerned with assessing the reforms from an analytical perspective, in the manner of an impact assessment, rather than reporting certain elements of the act’s implementation and operation. As such, the analysis provided in the preliminary assessment sections of this memorandum is at a high level. The Ministry of Justice intends to undertake a more thorough and substantive analysis in the post-implementation review.” [Emphasis added]
“Post- Implementation Review of LASPO: initial assessment” which was, probably coincidentally, the same date that a Civil Justice Council conference was held, chaired by Mr Justice Robin Knowles, being a seminar on the PIR for part 2 of LASPO. Thus, the CJC seminar and the MoJ initial assessment marked the start of the PIR process. At the same time, Cris Coxon of the Ministry of Justice set out in a PowerPoint presentation the MoJ’s approach, identifying the key evidence sources and some of the main data issues. In this regard, the presentation stated: • “Post-implementation reviews are policy led with analytical support. Data and research evidence will be used, so far as possible, to understand impacts of the reforms. • We do need to acknowledge the limitations of the hard data and what it can tell us. - The reforms are a delicate set of balances and counter-balances. - Our management information is comparatively blunt to measure the separate components in detail. - We need to avoid making spurious inferences about causality. • We will be using: 1. Courts’ data on claims volumes and processes. 2. Publish data on pre-court claims and settlements. 3. Professor Fenn’s assessment of litigation cost impacts. 4. Other published research data sources. 5. Expert opinion and responses to our request for evidence.”
“litigation costs and outcomes (damages). These are not captured by MoJ directly and not widely shared for commercial reasons. However, an independent analysis of claimant and defendant cost impacts has been carried out by Professor Paul Fenn and this will be an important resource for the review.” 27.In the PIR initial assessment, the MoJ stated: “The Ministry of Justice is committed to undertaking a post implementation review (PIR) of part 2 of [LASPO]. It is clearly good practice to examine whether the legislation has met its objectives, and whether there are unintended consequences that need addressing. That is what this PIR is intended to deliver. We are publishing a survey to seek stakeholder views: we hope as many people as possible will complete it. Where possible, respondents should read this initial assessment, which provides steers on issues on which we would particularly welcome comment. The Civil Justice Council is holding a stakeholder conference which will take place while the survey is live and be a focal point of the PIR. … a report will be prepared by MoJ officials later in 2018 drawing on views of stakeholders and the available data. It would then be for MoJ ministers to decide what further actions to take. It should be noted that the MoJ has already prepared a post legislative memorandum on the part 2 reforms, which stated that ‘Whilst there has inevitably been comment on points of detail, we are not aware of significant overarching concerns arising from the implementation of part 2.’” [Emphasis added]
“In particular, we have very limited access to data on the costs of litigation as this is typically held by private firms. If you wish to provide analytical evidence or have any queries, please email me to discuss this further.”
“Overall, what has been your experience of the combined impacts of the LASPO part 2 reforms?”
“The prospect of having success fees deducted from damages awards will further discourage seriously ill claimants from pursuing legal action where the benefits of doing so may seem marginal. … [but] while we have no firm documentary evidence on how law firms have responded to the changes to the rules on recovering success fees, we believe it is likely that there have been changes that have impacted adversely on asbestos victims.”
“We have seen no evidence that the reforms under the LASPO Act have resulted in wider choice or cheaper litigation for asbestos victims pursuing claims for civil compensation. If anything there are probably less firms pursuing this line of work as cases become less profitable and more risky. … the only direct effect of the reforms relating to success fees and ATE insurance premiums that we have seen is that asbestos victims are now experiencing deductions from their compensation that did not happen before the LASPO reforms. In addition we are no longer able to reassure asbestos victims that there are no financial risks involved in pursuing a claim for civil compensation. These reforms are more likely to deter victims with meritorious cases from seeking justice.”
“11.4 By contrast and with great reluctance, as a result of the commercial sustainability, there is an increased reluctance amongst claimant lawyers to run potentially meritorious but difficult claims for asbestosis, pleural thickening and lung cancer because of the combined effects of sections 44 and 46 of LASPO. 11.5 A big difficulty is created by QOCS as the claimant can still be liable to pay the costs of the successful defendant. 11.6 Asbestosis, pleural thickening and lung cancer cases are all treated as divisible conditions. This means that frequently claimants have to bring proceedings against multiple employers. Often as a result of employers’ liability insurance not being in place, it is not possible to bring every possible tortfeasor into the proceedings.” 32. The effect of LASPO was stated at 11.8 to be: “Since LASPO the claimants suffering from asbestosis, pleural thickening and lung cancer no longer have [the protection of ATE insurance] which means they lose damages even when successful, even possibly to the point of very small amounts of compensation being recovered or no compensation being recovered at all.”
“I have turned down several high value class actions and high value individual cases because there is simply no reserve available any more for me to subsidise unsuccessful cases on liability by the success fees obtained from successful cases.”
“We are interested in receiving further data and evidence that will help to indicate impacts for the final review. In particular we have very limited access to data on the costs of litigation as this is typically held by private firms.”
“It is disappointing that neither the Claimant nor Leigh Day contacted Mr Smeeton [the contact for the provision of submissions] to discuss providing quantitative data despite it being made clear that we were inviting data for the PIR, as outlined above. It would have been very helpful to have received anonymised data with a significant sample size to compare the level of damages, case length, outcomes, costs and deductions for asbestos disease claims versus mesothelioma, for example, to analytically demonstrate the full impact of the part 2 reforms on mesothelioma versus other asbestos claims. It is disappointing that Leigh Day did not provide us with any detailed data and neither did they address specific questions set out in the initial assessment. For example, one of the issues on which we sought information was the level of success fees being charged, and we set out the reason for this.”
“In summary, we, Leigh Day, will say the effect of LASPO is a restriction to access to justice, because there is no success fee recoverable from the defendant, it means that there is no incentive on the defendant to reach early settlement. It’s unjust to deduct 25% from the claimant’s modest damages to pay for legal fees. The effect of this is to make cases uneconomic for solicitors and barristers and therefore makes it much more difficult for clients to actually get legal representation. It is not just Leigh Day lawyers who are saying this, it is QCs such as Frank Burton QC, he’s an eminent QC. Mr Burton’s confirmed in his statement that he has actually turned down several cases, and we confirm, as Leigh Day, that as a result of the depleted reserve funding we are more cautious on taking on cases.”
“Now clearly that’s a consequence of LASPO, if we take ourselves back to pre-LASPO that did not happen. Asbestos victims, lung cancer victims, they are all entitled to seek a recovery of the success fee and their ATE premiums from the defendant and that enabled, in most cases, the clients to receive 100% of their compensation. We think this is a serious step backwards and the changes in LASPO to that category of people.”
“In conclusion, LASPO appears to have an effect on settlement behaviour and on the overall costs of litigation. There are fewer claims, and their base costs, damages and legal proceedings have all diminished. To some extent these effects are consistent with the stated objectives of the LASPO part 2 legislation to ‘reduce the costs of civil litigation’ and ‘discourage unmeritorious claims’ and to ‘encourage early settlement’. On the other hand there may be some concern as to whether ‘parties with a valid case can still bring or defend a claim’ and whether those parties are being fairly compensated for their losses.”
“These interpretations are not necessarily the only ones that our results could support, though, as noted above, they can be linked into some economic models and empirical results. Also they do not have any normative implications (i.e. about whether the reforms had been ‘good’ or ‘bad’); e.g. trading off lower damages for faster, cheaper resolution of claims may be welcomed by some and not by others. Similarly it is natural for lawyers (as other workers) to respond to the incentives they face. It is clear that further work, on more detailed data, would be required to help interpret our results, their desirability and the precise contribution of different elements of LASPO.”
“17. The high-level available data on the volumes of court claims suggests that the number of claims has reduced slightly and in a manner consistent with the Government’s objective of reducing unmeritorious claims (objective 5) and not to an extent that would indicate a negative effect on access to justice (objective 3). Conclusion 18. Based on the evidence received as part of the PIR the government considers the part 2 reforms to have been successful in achieving the principle aim of reducing the costs of civil litigation (objective 1). The evidence shows that in a range of personal injury claims (including clinical negligence claims), costs have reduced significantly (circa 8%-10%) and early settlement has also improved (objective 4). A definitive judgment on the impact of unmeritorious claims cannot be made at this time but the claims volumes data, the changes in financial incentives to CFA, the test of fundamental dishonesty for QOCS and anecdotal stakeholder feedback suggest there has been an overall decline in unmeritorious claims (objective 5). The government considers that, on balance, the evidence suggests the part 2 reforms have successfully met their objectives. The Government doesn’t therefore propose any amendments to the primary legislation.”
“However there were a handful of calls by claimant lawyers to overturn section 44, particularly for diseases such as asbestosis, and to reintroduce recoverability for success fees to protect the claimants damages (paragraph 76).” b) In the same section, at paragraph 81, the PIR stated: “One claimant lawyer firm [clearly a reference to Leigh Day] noted that in CPR (Practice Direction 3e 2(b)) claimants with ‘a limited or several impaired life expectation of five years or less’ were treated differently for costs budgeting purposes and suggested that an exemption for the same category of the claimants with regard to the recoverability of success fees and ATE premiums would benefit claimants with serious disease claims such as asbestosis” (paragraph 81).” c) In the section considering the non-recoverability of ATE insurance and the introduction of QOCS for personal injury cases, it was stated: “94. Several claimant lawyer respondents referred to the case of Cartwright v Venduct Engineering which relates to the entitlement of a successful defendant to enforce and adverse costs order against damages recovered by a claimant from another unsuccessful codefendant. Concern was expressed that QOCS protection could potentially be lost in multi-defendant cases which could have a particular impact in divisible disease cases such as asbestosis.”
“205. That said, the data are inconclusive and the differing results potentially indicate that part 2 of LASPO may have had differing impacts in different categories of law.”
“The claimant’s evidence explained that asbestos victims are now experiencing deductions from their compensation that did not happen before the LASPO reforms and that victims with meritorious cases are being deterred from seeking justice. We do not expect it to be disputed that these are unintended consequences of LASPO. It is also plain, we contend, that they need to be addressed, given the significant disadvantage now faced by a substantial cohort of asbestos victims and the chilling effect on access to justice.”
"It is clear that in a case such as the present, a claim to a legitimate expectation can be based only upon a promise which is 'clear, unambiguous and devoid of relevant qualification': see Bingham LJ in R v Inland Revenue Comrs, Ex p MFK Underwriting Agents Ltd[1990] 1 WLR 1545 , 1569. It is not essential that the applicant should have relied upon the promise to his detriment, although this is a relevant consideration in deciding whether the adoption of a policy in conflict with the promise would be an abuse of power and such a change of policy may be justified in the public interest, particularly in the area of what Laws LJ called 'the macro-political field': see R v Secretary of State for Education and Employment, Ex p Begbie[2000] 1 WLR 1115 , 1131."
“What are the conditions under which a prior representation, promise or practice by a public decision-maker will give rise to an enforceable expectation of a substantive benefit?”
"[The health authority's promise of a home for life] was an express promise or representation made on a number of occasions in precise terms. It was made to a small group of severely disabled individuals who had been housed and cared for over a substantial period in the Health Authority's predecessor's premises at Newcourt. It specifically related to identified premises which it was represented would be their home for as long as they chose. It was in unqualified terms. It was repeated and confirmed to reassure the residents. It was made by the Health Authority's predecessor for its own purposes, namely to encourage Miss Coughlan and her fellow residents to move out of Newcourt and into Mardon House, a specially built substitute home in which they would continue to receive nursing care. The promise was relied on by Miss Coughlan. Strong reasons are required to justify resiling from a promise given in those circumstances. This is not a case where the Health Authority would, in keeping the promise, be acting inconsistently with its statutory or other public law duties. A decision not to honour it would be equivalent to a breach of contract in private law." 46. These cases illustrate the pressing and focussed nature of the kind of assurance required if a substantive legitimate expectation is to be upheld and enforced. I should add this. Though in theory there may be no limit to the number of beneficiaries of a promise for the purpose of such an expectation, in reality it is likely to be small, if the court is to make the expectation good. There are two reasons for this, and they march together. First, it is difficult to imagine a case in which government will be held legally bound by a representation or undertaking made generally or to a diverse class. As Lord Woolf MR said in Ex p Coughlan (paragraph 71): "
“A consideration of whether a non-statutory consultation process such as this contravened the requirements of procedural fairness will always be fact and context sensitive. As Burnett LJ identified in the London Criminal Courts Solicitors' Association case, the test is whether the process has been so unfair as to be unlawful … 62. Turning next to the question of whether appropriate consideration was given to the consultation responses, we do not accept that that obligation translates into an obligation on the Minister to adopt the submissions made to him by respondents. In our judgment the Minister was entitled to consider the whole range of responses made to him, (together with all relevant information), and to form his own conclusion independently of the views of any particular section of consultees or indeed the views of his own advisers. The Response at paragraph 20 appears to us to represent the balance struck by the Minister after weighing up the various submissions made to him. … 63. Insofar as the judge was critical of a failure of the Response document to explain why a threshold of three units was not used instead of 10 units, as had been mooted at one stage, we do not consider that is was necessary for the Secretary of State to descend to that level of particularity. The requirements of a fair consultation do not require that sort of detailed analysis of options before the Minister. As Silber J observed in R (Maureen Smith) v East Kent Hospital NHS Trust[2002] EWHC 2640 (Admin) at paragraph 78 "There is no obligation for a party to consult on each and every item of detail when there is a series of different models available as options." Moreover, the observations of Lord Woolf in Coughlan cited above reinforce this point. Those observations, it seems to us, are equally applicable to the process of consideration of consultation responses.”