Ministers attempt to tackle position in which lawyers can be awarded greater proportion of payouts than claimants
The government will next week announce a clampdown on "fat cat" lawyers in civil cases by capping bonuses and tackling what ministers describe as the perverse position in which lawyers can be awarded a greater proportion of payouts than claimants.
The reforms are designed to address injustices such as the case of a superstore found liable for an injury paying 60% to lawyers and only 40% to the injured party.
Kenneth Clarke, the justice secretary, will announce plans to control costs in no-win no-fee cases by introducing a proportionality test so that fees bear a closer relation to the damages.
He will also cap so-called success fees in personal injury cases to lawyers, sometimes doubling the amount they earn. These will be paid by the claimant instead of the defendant. There are also plans to increase payments by 10% for people who have endured pain or suffering as a result of an injury.
The proposals, which critics claim are simply designed to reduce legal costs, will be put forward on Tuesday in response to the report into civil litigation costs prepared by Sir Rupert Jackson in January last year. Jackson suggested capping any success fee at 25% of the damages.
This will be the second major attempt to cut lawyers' fees in less than a decade. In 1999 the government legislated to make the success fee recoverable from the defendant rather than from the claimant, on the basis that it would be better to charge the person who caused the loss than to charge his victim.
Clarke said: "Compared to 20 years ago, we are a society that is getting very, very legalistic and litigious which is why so many of the processes you go though take so much longer than they used to, there is more paper than there used to be, the world is getting very complicated.
"In day to day experience, the average member of the public regards any contact with the law with a certain amount of fear and dread. The ordinary man and woman with an ordinary income and an ordinary outlook on life has fear of contact with courts, with lawyers, or if they are going to have a legal dispute with their neighbour, it is something they dread. There is no reason why it should be so costly and slow."
His remarks come as the all-party justice committee prepares to criticise his related plans to cut the legal aid bill, including for family disputes such as child custody. The committee is particularly concerned at evidence that Citizens Advice bureaux are closing due to a joint squeeze from lost legal aid and loss of income from councils.
Clarke also revealed he was drawing up plans to reform the European court of human rights in Strasbourg when Britain takes over its chairmanship this autumn.
He has been accused by the Tory right of bowing to the court's judgments, such as allowing the vote to prisoners. But he said supporters of the court were also deeply concerned by its inadequacies. "It is too big. There are 47 judges. It also has tens of thousands of old cases because it does not have the power to get rid of the frivolous ones. It just needs to have some new way of sitting to get rid of this backlog."
He also disclosed he was trying to prevent complexities creeping into his plans for probation trusts, companies and voluntary groups to be paid to keep released prisoners from reoffending.
He said he was trying to stop officials "producing a morass of over-complicated contracts" for his proposed payment by results scheme, seen as the centrepiece of his rehabilitation revolution.
He said: "I realise that any sensible investor has got to have a belief that they will get a return at least equal to the return they will get on government bonds."
He told potential bidders: "If you save me from a lot of offenders, if you save the public a lot of repeat crime, you will get quite a decent return on your capital. We have two thirds of them in prison that will be back committing another crime in two years. If you reduce that by half, that would be an absolute miracle."