2023 was a busy year for civil justice reforms and it’s more than likely that we’ll continue to see changes this year too as the Ministry of Justice (MoJ) and Civil Justice Council (CJC) continue to update and review key legislation and guidelines.

Taken together, the upcoming and proposed civil justice reforms are designed to make it easier and simpler to resolve civil and commercial litigation and help clear some of the ongoing backlog of small claims and injury cases in the court system.

That’s not to say that the reforms have been uncontroversial.

Let’s explore the timeline of civil justice reforms and potential changes you need to be aware of in 2024:

Guideline Hourly Rates Rise

From January 1^st the Guideline Hourly Rates (GHR) for fee earners have increased in line with inflation according to the Services Producer Price Index. The new hourly rates have risen by around 6.5% and will rise annually in line with the SPI. You can find the new rates here.

Review of the Personal Injury Discount Rate (PIDR)

Following a second call for evidence which ended on 9^th April, another formal review of the PIDR is expected to take place in July 2024 with any changes being announced before the end of January 2025. Potential changes could result in disruption and increased costs.

Fixed Recoverable Costs (FRC) Uprated for Inflation

Previously only used for low-value cases, FRC now apply to most civil litigation claims in England and Wales valued up to £100,000. What’s more, the government has finally confirmed that FRC for low-value clinical negligence claims (valued between £1,001 to £25,000) will come into force in October 2024, six months later than planned. However the changes are not without opposition with The Society of Clinical Injury Lawyers arguing that the FRC proposals are ‘fundamentally flawed’, as they misunderstand the nature of compensation and do not prioritise learning and patient safety.

Further Changes to Pre-Action Protocols

Discussion continues around the issue of digitising pre-action processes. The first part of the Civil Justice Council’s review of pre-action protocols was published in August 2023. The report focused on the benefits of digitisation and recommended several proposals to the MOJ. While there is no timeframe for the publication of the second part of the review it is anticipated that it will focus on reform and creation of specific protocols.

Mediation and Alternative Resolution to become Compulsory

The government has been focused on integrating mediation and other forms of ‘negotiation dispute resolution’ (NDR) into a wide range of legal practice areas for some time. We’ve seen mediation processes begin to be implemented in family law and in small claims cases up to the value of £10,000 over the past year and we can expect to see the same in wider civil and commercial litigation.

Potential Pilots on Cost-Budgeting

Finally, the CJC has recommended that a pilot be undertaken to test different approached to cost budgeting in the next year or so.

How Civil Justice Reforms Could Affect Recruitment

So, what do these current and future civil justice reforms mean for law firms and how will they affect your ongoing recruitment and talent acquisition planning?

In the short term the ongoing backlog of civil court cases in England & Wales combined with the changes to FRC’s and the rise in hourly rates could put off clients with smaller claims. This could mean less work for smaller firms, putting the brakes on hiring. However, one potential upside is an increase in legal talent on the market.

The rise in GHR could also improve early career recruitment, making it easier to snap up young legal talent, if you can create an employer brand that appeals.

In the medium to longer term, the skillsets sought by law firms are expected to evolve. The push towards digitisation, an increase in tech-based roles, and a greater emphasis on mediation will necessitate attracting and retaining candidates with digital literacy, mediation, and Negotiation Dispute Resolution (NDR) experience alongside their legal expertise.

Clayton Legal has over 20 years’ experience helping clients attract and retain legal talent across practice areas that include Property, Personal Injury, Family, Criminal, and Costs law as well as Legal IT and Civil and Commercial Litigation.

If you are building your legal team, we can help. Call us on 01772 259 121 or email us here.