Jackson Report - Latest twist

The future of the Jackson Costs Review becomes ever more intriguing and yesterday’s post on the Jackson Review may only tell half the story.

I have received information from a reliable source that both main political parties support the Jackson reforms, but that support is not particularly strong on the opposition’s side. The opposition support only parts of it, but they are looking more at setting up a CLAF rather than implementing the proposals. If this happens, then large parts of the reforms will not be implemented (or, if they are implemented, they will be implemented late).

If true, this would seem to turn conventional wisdom on its head in terms of the political element of the Jackson Review.

To make things even more interesting is the latest claim from the insurance industry that the public will pay more if the Jackson Report is implemented. Aviva claims it has computer-modeled Jackson’s final report and found that civil litigation costs under the proposed system would increase, rather than fall as intended. The extra costs would have to be passed on to all policy holders in the form of higher premiums.  This is based on the proposal for a 10% increase in general damages.

It is somewhat hard to understand what modeling system produced such an odd outcome. 

The claimant lobby had been suggesting the Report is the insurers’ dream come true, with Tom Jones, head of policy and public affairs at Thompsons, saying on publication: “the champagne corks will be popping at insurers’ headquarters.  They have got almost everything they have been lobbing for”.

I suspect this is a bit of clever spin by insurers (and why not?).  By suggesting they are not entirely behind the Report it implies it must be a more balanced set of proposals and increases its prospects of overcoming the political problems.

As Jackson LJ said: “It is interesting that the claimant lawyers are saying to me that the 10% uplift is too mean, but the insurers are saying that the increase of 10% is too generous.  It’s just possible that the balance of the report is right”.