Incoming Foil president Don Clarke looks at the effects of referall fee reforms

As I commence my tenure as Foil President, I am repeatedly reminded of this old adage.

As pieces of the Jackson puzzle become less opaque and the Ministry of Justice (MoJ) continues to articulate its plans for reform, we start to get a clearer picture of what the compensation landscape may look like after October 2012.

The key to Jackson always was the “interlocking package” – a cohesive parcel of reforms with clear interdependencies that together work as a unit. If you pull a lever over here, you can clearly see the effect over there.

The government, however, has disassembled the package and now needs to start putting the pieces back together. The Legal Aid, Sentencing and Punishment of Offenders Bill (LASPO) is likely to receive Royal Assent in April.

End of recoverability

This will end the recoverability of ATE premium and success fees and will now also bring in a ban on the payment and receipt of referral fees in personal injury claims.

This is all well and good but the referral fee ban needs to be implemented in parallel with a reduction in legal costs. If not, then there will be no benefit for compensators to pass on to the consumer and we will create a period where some claimant lawyers potentially enjoy a windfall.

What is the process to consider this? What is the benchmark to which the 10% uplift will be applied?’

The genesis of Jackson was to devise a more effective and efficient mechanism to deliver compensation to injured victims. The issue was never the level of compensation but the level of cost involved in delivering that redress. We need to take the fat out of the system and open access to redress for all parties involved in the process.

Timing is vital. The various strands of the Jackson and MoJ proposals must start coming together so compensators and claimant advisers alike can start to make an informed judgement as to the true impact. An important issue to all is the 10% uplift in PSLA. The MoJ tells us that this is “with the judiciary”.

What is the process to consider this? What is the benchmark to which the 10% uplift will be applied? When will this become effective – will it be before or after the abolition of recoverability of success fees or at the same time?


The current process is neither affordable nor sustainable. Politicians want to see premiums reduced – particularly in motor. Compensators will give up referral fee income and see an uplift in damages but they also want to see a meaningful cut in hourly rates and fixed fees.

For behaviours to change, for claimants to have certainty and for the premium-paying consumer to benefit, the package needs to be drawn back together as one and delivered in a cohesive manner that recognises those interdependencies. In this way, Jackson’s vision can be realised and reform can be meaningful. So 2012 is shaping up to be quite a year.

Finally, as I take stock of what lies ahead for me as president, I wish to thank Tim Oliver for the way he has lead FOIL during his year in office and the insight he has given.