Jackson Update

1. Jackson Update Don Clarke, President of FOILPartner, Keoghs LLP

2. Agenda A brief history on MoJ / Jackson proposals Where are we up to? The likely timetable for the next 12 months A view of the post April 2013 landscape Risks and opportunities

3. A brief history Jackson – January 2010. Final Report and recommendations. May 2010 – General Election. Summer 2010 – Djanogly and Lord Young announcements October 2010 – Lord Young – “Common sense, common safety” November 2010 – MoJ consult – Reforming Civil Litigation Funding and Costs March 2011 – Government response to the above and “Solving Disputes in the County Courts”

4. A brief history Spring 2011 – LSB recommendations on referral fees Transport Select Committee report on the Cost of Motor Insurance June 2011 – the Legal Aid, Sentencing and Punishment of Offenders Bill June 2011 – Jack Straw intervention and his subsequent TMRB Autumn 2011 – LASPO Bill moves into the House of Lords with the referral fee amendment December 2011 – the OFT report, LASPO debate begins February 2012 –the “Solving Disputes” response & (we hope) Costs Consultation. Jack Straw’s Bill is blocked by the Government. March 2012 – Report Stage of LASPO ready for Royal Assent in April.

5. The key components Jackson …ATE premiumSuccess feesNotional premiumsPart 3610% uplift in PSLAQOCSDBA’sReferral feesFixed costsProportionality Insurers via ABI gave broad support for Jackson as the “interlocking package”. We cautioned from day 1 that that package would be broken up and considered piecemeal and that is precisely what has happened. As always, the “devil is in the detail” and much of these elements is still vague at best.

6. Where are we up to? Progressing Jackson’s recommendations. The LASPO Bill contains 6 relevant clauses: Section 41 – recoverability of success fees Section 42 – paves the way for DBA’s Section 43 – recoverability of ATE premium Section 44 – recoverability of notional premiums Section 51 – amended Part 36 Sections 54 – 58 - the new amendment to ban referral fees in injury claims But ….. QOCS,10% uplift in PSLA & proportionality?

7. Where are we up to? Referral fees After much deliberation, the Government has decided to ban referral fees …… BUT … This is restricted to injury claims only Is restricted only to bodies currently regulated by the FSA, Bar Council, Law Society and the CMC Regulator It does not catch credit hire referrals, medical referrals or include operators such as tow trucks, body shops or garages. BUT … the OFT enquiry in 2012 will focus on credit hire.

8. Where are we up to? Fixed fees and the Guideline Hourly Rate Jonathan Djanogly MP issued a letter dated 28th February inviting responses to set questions on the extension of the RTA portal and inclusion of both EL and PL accident claims. The closing date for that response is 25th May. We would expect the Government to then crystallize their position on this in the Autumn. Still issues about the ability of the portal to accommodate more / different claims. More work is required.

9. Where are we up to? Extending the RTA portal and protocol We now have the Government’s response to “Solving Disputes”. This has confirmed that: The RTA portal will be increased to £25,000 EL and PL will be considered for the portal That fixed costs will be extended. The Djanogly consultation letter now picks this up and it is for stakeholders to respond with views by 25th May.

10. 2012 – timeline and activity It has been a busy start to the New Year! February – “Solving Disputes” response. We now have the costs / portal consultation. More work around QOCS, P36, proportionality and the 10% uplift in PSLA. LASPO has completed Committee Stage – Jackson clauses are unamended. Report Stage commenced 05.03. The OFT enquiry will report in the Spring. It is the costs consultation which is key – this will drive the outcomes and future behaviours

11. Looking ahead Referral fees will be banned but probably badly The RTA portal limit will move to £25,000 but when? Casualty claims through the portal? We need direction from Government on this – what are their intentions? Fixed fees on everything in the portal – the RTA fees will be reduced – but by how much? No recoverability of ATE or success fee 10% boost in PSLA, New Part 36 QOCS – will this exacerbate a “have a go” culture? We need to focus on securing fixed costs for EL and PL.

12. Issues outstanding … LASPO needs to pass through Report Stage and receive Royal Assent. The CJC / MoJ need to finalise their position on QOCS, Part 36 and Proportionality. The Judiciary need to consider the 10% uplift on PSLA – uplift against what benchmark? We need to see what the costs / portal consultation will bring forwards. Final implementation date for the Jackson package? Transitional arrangements.

13. Conclusions Change is coming and will commence April 2013. A great deal of hard work has been done but much more to do Our concern is that reform must not be delivered piecemeal – but in a cohesive package as envisaged by Jackson Access to justice must be preserved but transactional cost needs to be reduced. Fraud remains an issue – we all need to do more. Finally, let’s get it right first time – for injured people and to avoid another round of satellite litigation.