This could be a result of costs budgeting as parties see the potential overall cost of litigation at an early stage. Judges and litigators have found that many cases have settled after the parties see the costs budgets.
The fact that open and early costs budgeting is preventing cases reaching court and encouraging settlement is certainly viewed as a positive effect of theJacksonreforms by stopping unnecessary costs being incurred by litigation.
A further factor encouraging fewer cases reaching court, however, is the difficulty with which after-the-event (ATE) insurance can now be obtained. Litigators are reporting that it is harder to find affordable insurance for small-scale litigation now that ATE premiums cannot be recovered.
This potentially prevents smaller or struggling businesses from enforcing their contractual rights and making legitimate claims as they cannot afford the cost of losing a case.
ATE insurers are reacting to this issue by finding ways of allowing people to afford cover through the use of deposit premiums or deferred premiums, however these still remain very expensive. Other options that are being offered by some ATE insurers include paying non-refundable premiums up front, allowing the premium rate to be lowered 50% in some instances.
The above is not legal advice; it is intended to provide information of general interest about current legal issues.