Lord Justice Jackson has now issued his Final Report.  It is exciting and controversial, and the task of reading all 584 pages in conjunction with the Preliminary Report, is a daunting one.

Among the report's bold conclusions are these.

No win no fee agreements (conditional fee agreements) have been the major contributor to disproportionate costs in England and Wales, mainly because the success fee and the ATE premium are recoverable from the unsuccessful defendant. Jackson therefore recommends that both the success fee and ATE premium should cease to be recoverable. Any success fee should be borne by the client (usually, the claimant in a personal injury claim) and not by the defendant/insurer. Comment: this will make a huge difference to the balance of power between claimant and defendant. Claimants nowadays expect to have their damages in full, and market forces will probably force claimant solicitors to keep their success fee to the minimum (hitherto there was no incentive for them to do so) and eventually abandon success fees and run the litigation at a much smaller profit.

As this will mean that claimants may lose part of their damages to pay costs, the recommendation is that general damages awards should be increased by about 10% and that success fees be capped at 25% of damages (excluding damages for future loss). Comment: this recommendation if implemented will disappoint insurers but will be more than offset by the savings in costs.

Referral fees, often paid by claimant solicitors to claims farmers, should be banned.

Qualified one-way costs shifting. In other words, a claimant who fails in his claim should not necessarily be required to pay the costs of the successful defendant.  Unreasonable conduct on the part of either claimant or defendant may lead to a different result. Comment: many insurers will be happy with that. In the good old days of legally aided personal injury actions, costs were never recovered and the incentive to accept an offer was the possibility for a claimant of having to pay some of his own costs if he failed to beat an offer.

Fixed costs in fast track litigation, which affects cases with a value of up to £25,000.

Encourage wider use of BTE (before the event) insurance. Comment: this is a somewhat futile recommendation as there are usually narrow time limits within which claims must be reported to BTE insurers.

Contingency fees should be legalised and the indemnity principle should be abolished. In other words, a solicitor should be permitted to represent his client on the basis that there will be no charge if the claim fails, and the solicitor will claim a percentage of the damages if the claim succeeds. Comment: this really will not suit most personal injury actions, but might suit other types of litigation where the damages are likely to be very large.

Alternative Dispute Resolution should be encouraged but should not be compulsory. Comment: this reiterates a familiar message from the judiciary, who seem reluctant to accept that there are many claims that are quite unsuitable for ADR.

Part 36: if a Defendant fails to beat a Claimant's offer, the claimant should recover 10% more. The effect of Carver v BAA should be reversed.  Comment: this is disappointing.  The Carver case was enormously helpful to insurers - it said that if a claimant recovers only slighly more than the defendant's offer and fails to make reasonable efforts to negotiate, then the costs will usually be awarded to the defendant.

An increase in the small claims limit for personal injuries claims from the existing £1000 is not recommended by Jackson, who notes that FOIL recommend retaining the existing limit.  Comment: surely most insurers would prefer an increase in the small claims limit? The opportunity to say so has now passed.

Uniformity in lawyers' time recording systems so that it is easier to see what work has been done and print out a calculation. Comment: lawyers may have to invest in newer and better case management systems and change their methods of time recording. The software suppliers may have to confer with each other so that their products are capable of producing similar costs spreadsheets in a form approved by the courts.

There is much more to read in the report and we can expect to see many commentaries. Whether all or any of it will be adopted in the foreseeable future is another matter, and many claimant practitioners are concerned about how they should handle cases now that the Jackson report has been issued, if there is uncertainty about whether all the costs will be recoverable from a defendant.  Will there be a reluctance to issue new proceedings until the rulemakers have made a decision?  Most personal injury claims are relatively small in value, and most claimants want all of their damages without sharing the award with their lawyer.  The lawyers, not the clients, will probably bear the financial burden of these reforms.