Legal aid cuts and the Jackson reforms will slash the number of claims brought against the NHS by 50%, a senior member of the Civil Justice Council has predicted.

Peter Smith, managing director of FirstAssist Legal Expenses Insurance, told Saturday’s Bar Conference that Jackson in particular will trigger a ‘windfall’ for the defendant insurance market, as a ‘golden age’ for litigation funding comes to an end.

The estimate is informed by discussions with the NHS Litigation Authority, with whom Smith liaises closely as a member of the CJC’s executive committee.

At present, 6,000 claims are pursued annually, he said, of which 2,000 would not have seen the light of the day following civil legal aid cuts. Of a further 2,000 cases backed by conditional fee agreements and after-the-event insurance, about half would have failed to proceed under the new regime, he added.

‘A golden age is about to end,’ Smith told a conference session on funding arrangements in civil litigation. He sees little prospect of the Legal Aid, Sentencing and Punishment of Offenders Bill being significantly modified at this late stage. The bill past through the Commons last week and will shortly go to the Lords.

He added: ‘The reforms are likely to come in on 1 October next year. There will be significant resistance in the Lords, but that resistance is not coordinated.’

Smith said he believed the reforms to be well intentioned, but that Jackson is only going to fulfil the second part of his remit to ‘promote access to justice at proportionate cost’.

He added: ‘These reforms will have very serious unintended consequences, making it materially harder for people with good cases to get damages in all parts of the personal injury market.

‘Sir Rupert [Jackson] and the government keep arguing that alternative funding options will emerge - but without any evidence.’

Smith said it is unrealistic to expect before-the-event insurance to ‘fill the void’. Take-up of BTE peaked several years ago and has been falling, he stressed. The product is sold as an add-on to household and motor policies, he added; products that are increasingly sold through price comparison sites where ‘add-ons’ are stripped out. He also expects BTE premiums to increase sharply, partly because of the abolition of PI referral fees.

For a full report on the Bar Conference 2011, see Thursday’s Gazette.