Easter Monday sees the long-awaited implementation of many of Lord Justice Jackson’s civil justice reforms. As the biggest shake-up in costs and procedure for over 20 years, it could spell the beginning of the end to the claims culture, which retailers have borne the brunt of for too long.

Since claimant firms were permitted to claim success fees in civil compensation claims, retailers have looked on in horror at the level of claimant costs paid in even straightforward low-value cases. With such costs usually five to eight times the amount the claimant was awarded, retailers have understandably adopted highly commercial claims strategies in a bid to reduce costs and indemnity spend. The focus has been on attacking the costs risk rather than the merits or true value of the claim.

The new regime is designed to tackle this issue. Referral fees will be banned, insurance premiums will no longer be recoverable and costs will be intrinsically linked to damages, forcing claimants, in theory, to take a more active interest in the proceedings.

By the end of July, most employers’ and public liability claims will be notified through the MOJ portal and most under £25,000 should attract lower fixed recoverable costs. Success fees above 25% will disappear and when you add greater certainty about costs through budgeting, the hope is that a fairer claims process will be restored.

But as the potential cost liability goes down, the damages liability goes up with an automatic 10% uplift on general damages. With the new regime providing for the claimants’ costs to be largely determined by the level of damages, in particular past losses, it risks encouraging more exaggerated or fraudulent claims aimed at drawing out the lifecycle of a claim.

Time will tell whether the reforms are a success. But for the claims-savvy proactive retailer willing to refine and invest in their technical claims strategies, there are potentially significant rewards available. Not just cost savings, but improved claims histories that can lead to more attractive insurance terms. At long last, perhaps we can fairly protect business and brand.

Andrew Evans is head of retail claims at Hill Dickinson

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