Ken Clarke has announced a crackdown on the damaging compensation culture that is costing businesses millions of pounds a year.
The plan is part of the Government’s mission to curtail the unwieldy courts system and deliver swifter, easier and less costly access to justice for all.
This is the first major overhaul of civil justice for 15 years and will reform the controversial ‘no win – no fee’ deals that have proved expensive and resulted in unnecessary litigation tying up businesses, school, hospitals and a raft of other organisations in needlessly costly court proceedings.
The proposals for consultation include:
Plans to improve enforcement so that people and organisations receive what it is judged they owe. This is a particular issue for small businesses who often find that after going through the court system they find they never get what it is judged they are owed.
Introducing automatic referral to mediation in smalls claims cases and ensuring parties are aware of mediation as a quicker and cheaper option in higher-value cases to help people and enterprises avoid the time and cost of court where possible.
Raising the small claims limit to £15,000 to allow swifter access to justice for small claims and also change the County Court jurisdiction so that the High Court is only used for bigger and more complex claims.
Abolishing recoverability of success fess and associated costs in ‘no win no fee’ conditional fee arrangements. Under the current regime defendants must pay (often substantial) additional costs if they lose. Instead claimants will have to pay their lawyer’s success fee and will therefore have an interest in controlling the costs incurred on their behalf.
Justice Secretary, Ken Clarke, said:
“An effective system of civil justice is one of the cornerstones of a civilised society. Without it businesses couldn’t trade, individuals couldn’t protect their liberties, and government couldn’t be held to account. But, despite this, most people dread going to court because of all the cost and anxiety it involves. We must change that by helping them to avoid court where possible and cutting costs where that is unavoidable.”
And he added, “With no major reform for 15 years, the civil justice system has got out of kilter. Businesses and other people who have been sued can find that spiralling legal costs, slow court processes, unnecessary litigation, and the ‘no win, no fee’ structures which mean greater payments to lawyers than to claimants, are setting them back millions of pounds each year.”