Lord Justice Jackson's "controversial proposals" are a risk to insurance sector, says law firm

City law firm Reynolds Porter Chamberlain claims the Jackson Review is a blow to insurers because they might not be able to recover costs when successfully defending a claim.

Alexandra Anderson, partner at RPC said: “These are hugely controversial proposals that have very serious implications for defendants generally and for the insurance sector in particular.”

“Whilst, under the proposals, insurers will no longer foot the bill for a successful claimant's inflated costs, defendants (and their insurers) may be forced to settle unmeritorious claims, because they may not be able to recover costs from a claimant who brings an action that fails.”

“Insurers and other businesses will be very concerned about defending a claim when there’s a risk that they won’t be able to recover costs when they win.”

“The transition from a system largely based on subsidies from the taxpayer in the form of Legal Aid to one where the market provides funding through insurance and “no win no fee” agreements was always going to be a bumpy one.”

“The current system has its winners and losers but it was always going to be hard for Jackson to conjure up a solution to please all parties.”