Latest News

Claimants seem set to lose out in latest costs review

The Consultation Process

In January 2009, Lord Justice Jackson was appointed to lead a fundamental review of the rules and principles governing the costs of civil litigation and to make recommendations in order to promote access to justice at proportionate cost. The review's findings are due to be presented in December.

We have learned today that APIL (a not for profit organisation established to fight for the rights of injured people and campaigning for access to justice) have withdrawn from the consultation process as decisions have been made on key issues without a full, proper and open debate. 

Oliver and Co are proud to be an APIL accredited practice.  We fully support APIL’s decision to withdraw from the process.

Litigation Costs

APIL have been representing claimants and their lawyers during the recent consultation on the issue of costs in personal injury litigation.  This is an extremely important issue and Oliver and Co have also contributed to the debate. 

The basic principle in the personal injury litigation is that the losing party pays.  There are safeguards in place to ensure that claimant do not reject reasonable offers or adopt an unreasonable stance during the proceedings and as a result unnecessarily and disproportionately increase costs.  In the vast majority of cases, insurance companies are responsible for paying those costs.  Insurance companies have been lobbying the government to cap the costs that the claimants are entitled to claim.  Insurance companies are extremely powerful organisations with effective lobbying methods.  There is no other organisation to match the insurance companies to put across the counter arguments other than APIL.  Clearly, there is inequality of arms.

One of the suggestions put forward by the insurance companies is that there should be fixed costs paid to solicitors in all claims worth less than £15,000.  At first glance, this does not appear to be an unreasonable proposition.  However, the following points should be taken into account:-

 

• Fixed costs will only benefit insurance companies.  Claimants and their solicitors will lose out.  There is no benefit whatsoever to claimants or the public from fixed costs.

• Fixed costs will work in favour of insurers’ who can benefit by failing to deal with matters timeously and deliberately obfuscate in order to “price” the claimants’ solicitors out of the claim.  Insurers benefit, claimants lose out.

• Fixed costs will not address the issue of the costs and delay caused by the insurers’ failure to deal with matters timeously or at all.

• The fixed costs regime is inappropriate in all fast track cases.  Employer’s liability claims, disease claims and tripping claims can be complex and involve multiple defendants, a detailed review of disclosed documents and complex witness statements.  It does not automatically follow that a lower value claim is necessarily more straightforward. 

• Fixed fees will lead to agreements being reached where claimants will face deductions from damages.  Insurers benefit, claimants lose out.

• There is greater risk associated with Employer’s liability claims, disease claims and tripping claims which would not be taken account of by the fixed costs regime.

• Solicitors would not be paid for investigating claims which are unsuccessful or abandoned if the majority of the work is covered by fixed fees.  Claimants will lose out as firms will simply not take on the riskier cases. Insurers benefit, claimants lose out.

• In order for fixed costs to be financially viable, firms will have to employ unqualified staff to deal with claims.  Firms will not be able to afford to retain experienced and qualified solicitors.   Redundancies will be inevitable. 

• If the future of personal injury claims is that they are to be dealt with by unqualified fee earners then this in turn will have to lead to further and greater regulation as these fee earners are not subject to the same regulation as solicitors.  Insurers benefit, claimants lose out.

• There should be a comprehensive review of fixed fees in road traffic accident work before the system is implemented on a wider scale.  Those fees have never been reviewed and have not risen in line with inflation or at all.  Insurers benefit, claimants lose out.

• Any fixed costs regime will inevitably be arbitrary and will not take into account the increased risks inherent with employers’ liability etc claims, fixed costs will not take account of complexities (which may not be apparent from the outset) and solicitors will not be paid for the cases which are abandoned.  As a result, access to justice will be restricted.  Insurers benefit, claimants lose out.

   

 

APIL and Oliver and Co are opposed to any extension of fixed costs into the personal injury arena.  The real culprit for unnecessarily contributing to costs is insurance companies for failing to deal with matters in time and in accordance with the prescribed timetables and for unreasonably failing to make concessions of liability.  A fixed costs regime will not alter those behaviours.

To sign our petition please click on the following link to the No. 10 petitions site:

http://petitions.number10.gov.uk/civilcosts/

The Outcome

APIL has now been advised that the fixed costs regime will be extended to all areas of personal injury and it is now simply of a matter of figures.  As a result, and given that the decision has been made before the formal period of consultation has even ended, APIL have taken the difficult decision to withdraw from the consultation process.  Oliver and Co unreservedly support their decision to do so.  It is disappointing that there has not been a full, proper and open debate about the key principles.  It is now inevitable that claimants will suffer as a result.

More Legal News