Civil justice reforms – roundup of 2024 and a look ahead to 2025

In 2024 there have been several notable developments in civil justice reform in the UK. From changes to personal injury discount rates and fixed recoverable costs, to reviews into litigation funding and determining mental capacity, these changes are and will continue to reshape how parties navigate civil disputes in the personal injury arena.

Against the background of the Civil Justice Council’s (CJC) annual National Forum on 29 November 2024, this article explores the key civil justice reforms of 2024 and offers a glimpse into what the future holds for the UK’s legal landscape.

Whiplash tariff on the rise

On 21 November 2024 the Government published its response to the report on the statutory review of the whiplash tariff.

In summary, the current structure and component parts of the whiplash tariff are to be maintained. However, the tariff figures in each band are to be increased by 14-15% (accounting for CPI inflation between 2021 and 2024 and building in a three-year buffer).

In terms of next steps, the Lord Chancellor will consult on these decisions with the Lady Chief Justice which is expected to take approximately eight weeks. The outcomes will be communicated before revised Regulations are laid before Parliament.

Once laid before Parliament, the Regulations will be debated in both Houses under the Affirmative Resolution procedure and this will happen "as soon as Parliamentary time allows".

The procedure for determining mental capacity in civil proceedings 

A final report following a CJC working group’s consultation on mental capacity was published on 11 November 2024. This proposes the creation of a ‘menu of options’ for the court to ensure an appropriate approach can be adopted in each case.

In our response to the consultation we recommended that in personal injury and clinical negligence cases there should be clearer guidance on the role of legal representatives in raising an issue with the court regarding the litigation capacity of an unrepresented party, and provide an avenue for them to do so. However, legal representatives should not owe a duty to those they do not represent.

In the CJC’s final report, the group noted: “the strong view of the working group, and the almost unanimous view of the judges and practitioners whom it consulted, that there should be clear provision and guidance on the procedure for the determination of issues of litigation capacity”.

Sir Geoffrey Vos, Master of the Rolls, Head of Civil Justice and Chair of the CJC acknowledged that the report “is only the beginning”.

Related item: Better guidance and training key to any new approach to determine litigation capacity

Review of litigation funding

In April 2024, a CJC working group published terms of reference for a review into third party litigation funding (TPLF). The group then launched a consultation and interim report on 31 October, which closes on 31 January 2025. The report does not make any recommendations but rather focuses on the following areas:

  • The development of TPLF in England and Wales
  • The development of self-regulation of TPLF
  • The different approaches to regulation
  • The approaches to regulation in other jurisdictions
  • The relationship between costs and funding
  • Other litigation funding options available

While it is expected that the working group’s full report – due in the summer of 2025 - will make recommendations that ultimately uphold the principle of access to justice, many stakeholders, particularly businesses operating in the private sector, will expect the report to make recommendations that sufficient safeguards are put in place to promote transparency and accountability within the sector.

With the final report of CJC due in the summer of next year, this could mean legislation is not introduced until 2026, subject to the CJC’s recommendations.

What about PACCAR? The Litigation Funding Agreements (Enforceability) Bill, introduced by the previous government in March 2024, was intended to reverse the decision in  PACCAR Inc & Ors v Competition Appeal Tribunal & Ors [2023]. The Bill, however, did not progress following the general election. The current government has indicated that it will only consider the question of reform, including any future legislative proposals after a full review of the third party litigation sector.

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Changes to pre-action protocols

The pre-action protocols (PAPs) are under review.

An interim report was published by the CJC in November 2021 and remained open for consultation until 21 January 2022. Phase one of the final report was published in August 2023. The phase two report was published on 20 November 2024.

The phase one final report looked at the potential benefits of digitising pre-action processes and a general PAP. The working group made numerous recommendations including the creation of a new General PAP to replace the existing Practice Direction Pre-Action Conduct and compliance to be made mandatory except in urgent cases. The report also proposed that the MoJ should look at the feasibility of developing a general on-line portal linked to the main PAP steps but capable of being linked to existing on-line portals such as OCMC and damages claims.

The most recent phase two final report sets out the CJC’s recommendations for reform of specific PAPs, along with two new PAPs; one for child abuse cases and another for claims on the multi-track in the business and property courts. In response to the report, Sir Geoffrey said: “This second phase of work provides important recommendations about specific subject-area protocols. I very much hope that their implementation will be prioritised.”

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Review of the personal injury discount rate (PIDR) in the Republic of Ireland, Scotland, Northern Ireland, and England and Wales

On 8 July 2024 the Irish Department of Justice announced that there will be no change to the PIDR. The discount rate has therefore continued at +1% for future care costs and +1.5% for future financial loss.

The Discount Rate Independent Working Group recommended that an expert group should meet at a maximum of every three years to reassess the discount rate.

On 26 September 2024 the Government Actuary’s reports covering Scotland and Northern Ireland confirmed that the PIDR of +0.5% will apply to both jurisdictions. Both rates came into effect on 27 September 2024.

The previous rate of -1.5% in Northern Ireland was set in March 2022. The previous rate in Scotland was -0.75% and this was set in September 2019.

The next planned reviews of the PIDR for Northern Ireland and Scotland will commence in July 2029.

On 2 December 2024 the Lord Chancellor, Shabana Mahmood, announced that PIDR in England and Wales will remain as a single rate, but has been adjusted from -0.25% to +0.5%. The change will become effective as of 11 January 2025.

The PIDR must be reviewed on a five-year cycle.

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Compulsory mediation to be extended further?

There has been a clear shift towards encouraging alternative dispute resolution (ADR) in civil claims in England and Wales. From 22 May 2024, compulsory mediation was introduced for new claims made on paper or through traditional online money claims worth up to £10,000 (excluding personal injury claims). 

From 1 October 2024, judges have been granted new powers under the Civil Procedure Rules (CPR) to “order or encourage the parties to use, and facilitating the use of, alternative dispute resolution”. Judges are now directing parties to engage in ADR.

The Ministry of Justice (MoJ) has confirmed that the proposed extension of mandatory mediation to OCMC claims worth up to £10,000 will go ahead as planned later this year. It is considering currently whether mandatory mediation should be extended further, to damages claims (including RTA and personal injury).

In Ireland, the Irish Injuries Resolution Board’s mediation service was extended for public liability along with employers’ liability personal injury claims on 8 May 2024.

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Fixed recoverable costs (FRC)

FRC have been extended to cover most civil cases valued up to £100,000.

The MoJ has committed to reviewing the FRC regime in October 2026, including the tables of costs. It also plans to consult on the impact of the rules on vulnerable parties by no later than October 2026.

FRC relating to housing disrepair claims has been delayed by two years until October 2025.

It was thought that FRC in clinical negligence claims with a value of less than £25,000 would be introduced in October 2024. However, this deadline has come and gone and no update has been provided.

Related items: Fixed recoverable costs – April 2024 revisions

Our fixed recoverable costs (FRC) calculator

FRC applies to most civil litigation claims in England and Wales valued up to £100,000. Keep up to date with the latest insights on the FRC regime.

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Costs management – back in focus

Could costs budgeting become the default position for civil claims even those over £10m? A hot topic of the moment, reform of budgeting is on the CJC’s agenda for next year.

Budgeting is a helpful tool in allowing parties to litigation to understand and plan for potential costs liabilities and recovery. Two recent cases highlight this point:

  • In PXT v Atere-Roberts [06.06.24] which was put in excess of £10m, the High Court judge held that a road traffic accident case involving a 12 year old claimant should be subject to costs management. This was due to the “very serious and real concerns that without costs budgeting the costs will be excessive and unreasonable”. Although costs management does not automatically apply to claims such as this, and despite the medical prognosis not yet being finalised by the paediatric neurology expert, the judge ordered the costs budget to be provided within six weeks.
  • In Worcester v Hopley [21.08.24] the claimant’s unrealistic costs budget was slashed by the Master Thornett. The Master then rejected the claimant’s argument that budgeting issues should automatically lead to an order for costs in the case. Rather, the claimant in this case was ordered to pay the costs of the budgeting hearing.

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