The civil justice system has priced itself out of the reach of ordinary people; they face financial ruin if they venture into court and lose. That was the stark conclusion last week in the mammoth report on civil litigation from Lord Justice Jackson, the Court of Appeal judge — a conclusion perhaps predictable, if depressing.

Ten years ago Lord Woolf’s civil justice reforms cut off some of the Hydra’s heads of civil litigation but they have regrown. Delays have been cut, but costs have exploded. “We have arguably reached a position in this jurisdiction where the level of costs is so high that facing a full adverse costs order is likely to be a disaster for most ordinary citizens,” the judge’s report concludes. Even small companies will not go to law if there is a risk that they could lose and have to pay the legal costs of the other side.

Lord Justice Jackson’s 650-page, 63-chapter report is impressive, as is his timetable. The report is the upshot of four months of fact-finding; now he starts consultation before the final report is published by the end of December.

There is no reason, the judge says, why the mammoth task should not be completed within the year, given that Justinian “rewrote the rules for the entire new Holy Roman Empire in 14 months”.

Meanwhile, he has prepared the ground for slaying some sacred cows. Chief of these is the centuries-old principle at the heart of UK litigation: that the loser pays. This should not be regarded as untouchable, he concludes, even if “complete abolition” is not on the cards. But, pointing out that the rule does not apply in other areas of litigation (such as tribunals) he suggests that there may be distinct areas where it could be scrapped, such as collective actions, which “merits serious consideration”, or personal injury claims where the successful claimant should not expect to recover all his costs. “Loser pays is not the only option,” he says.

One alternative might be to cap the costs that can recovered, according to the size and nature of the claim. But they could be no higher than the amount needed to deter claimaints from pursuing an unmeritorious claim, rather than threatening them with financial ruin.

Next, the judge turns to “success fees”, the unacceptable face of no-win, no-fee deals. Substantial sums are being spent on litigating over personal injury claims that are out of all proportion to the damages recovered. Lawyers for claimants argue that the scheme has brought access to justice; but media lawyers and the NHS Litigation Authority, for instance, argue that the price of this access is too high and can lead to “crippling” costs for defendants.

The costs have been fuelled by a “costs war”, the explosion on litigation over what fees can be claimed. Meanwhile, lawyers’ earnings in this area are no longer related to what their clients can afford but to what they can reap from the losing side, all paid for by insurance.

Lord Justice Jackson then tackles victims’ damages. Personal injury lawyers have argued that “100 per cent retention of personal injury damages is now an established principle, from which there should be no retreat. Damages for personal injuries, unlike damages in respect of other matters, are sacrosanct,” they argue, according to the report. But the judge posits an alternative: accident victims should be treated no differently from other claimaints. If they think that “come what may” they will never suffer costs, they will have no incentive to behave reasonably, he says. One (controversial) halfway house might be to protect damages for future care and accommodation, but to say that damages for pain and suffering and, perhaps for past losses, could be subject to deduction.

The report also lays bare what the judge calls “the vexed question” of lawyers’ earnings, from solicitors in the high street to top-earning silk. Partners’ earnings in the Top 100 law firms average £287,000 a year; £98,616 across all firms. Most solicitors earn less than £70,000 a year.

Barristers’ gross yearly earnings (before overheads) range from £350,000 to £2 million for top tax or commercial Queen’s Counsel to £140,000 to £600,000 for criminal silks. At the other end, the most junior barristers doing crime, family or public earn £10,000 to £40,000 a year.

Such fees used to be controlled by market forces. But with the advent of the no-win, no-fee deal, fuelled by lawyers reaping their earnings from the losing side and inflated by middlemen (such as claims managers taking a fee to refer cases), costs have soared.

Lying at the heart of all these issues is how much litigation should cost. One reason that Germany has widespread litigation funding available, Lord Justice Jackson notes, is because the costs of going to court there are far cheaper than here. If a way can be found to cut those costs, the problem of funding litigation diminishes — and once again people would have access to justice.