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Legal Aid, Sentencing and Punishment of Offenders Act 2012

Part 2: Litigation funding and costs

9.The Ministry of Justice published on 15 November 2010 a further consultation paper entitled “Proposals for reform of civil litigation funding and costs in England and Wales”(3) which relates to proposals from Lord Justice Jackson’s review(4) (published in January 2010). This consultation exercise closed on 14 February 2011. On 29 March 2011 the Government published its response to the consultation exercise, announcing its intention to implement the proposals to reform “no win no fee” conditional fee agreements (“CFAs”)(5). This Act implements those proposals.

10.On 9 September 2011, the Government announced its intention to ban referral fees in personal injury claims via written ministerial statement to Parliament(6) as part of the wider package of reforms of civil litigation funding and costs. Provision to achieve that is now made in Part 2 of the Act.

11.In some circumstances, the courts have power to order that an amount in respect of costs incurred by a successful defendant, witness or successful appellant is to be paid out of central funds (in other words, out of money provided by Parliament). In the case of R (on the application of the Law Society of England and Wales) v Lord Chancellor(7) in June 2010, the court held that the Lord Chancellor cannot cap the amounts that the courts award. This Act will provide the Lord Chancellor with a power to do so for the purposes of proceedings in England and Wales, other than in relation to costs incurred in proceedings in the Supreme Court. It will also largely prevent orders being made in respect of legal costs (that is, lawyers’ fees, charges and disbursements including expert witness costs) where legal aid is available.


“Proposals for reform of civil litigation funding and costs in England and Wales” Cm 7947 available at [1]


Ministry of Justice (2010) “Review of Civil Litigation Costs: Final Report”. Norwich, TSO available at [2]


Reforming Civil Litigation Funding and Costs in England and Wales – Implementation of Lord Justice Jackson’s Recommendations: The Government Response” Cm 8041 available at [3]


R (on the application of the Law Society of England and Wales) v Lord Chancellor available at [5]

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