Civil justice advisers condemn PI fixed fees as ‘unrealistic’

Police car
Thursday 31 January 2013 by John Hyde

Fixed-fee proposals for personal injury work are unrealistic and should wait until at least 2014, the Civil Justice Council (CJC) has advised.

The independent advisory body chaired by the master of the rolls has told the government it should hold back from new costs plans before the civil justice reforms have been fully implemented.

The Ministry of Justice is currently working on its final costs report following a consultation that ended on 4 January.

Under the proposals, fixed recoverable costs for RTA claims up to £10,000 could come down from £1,200 to £500 from 1 April.

Claimant groups last week launched a legal challenge to the plan. The CJC’s response will place further pressure on ministers to hold back.

It points out that the costs regime must accurately reflect the actual amount of work that goes into managing a PI claim.

‘The CJC is conscious that solicitors must comply with a number of regulatory guidelines when opening a file, and that it may be regarded as unrealistic to expect all the necessary work and negotiations to be carried out against a fixed fee limited to £10,000.’

The response points out that claims worth less than £10,000 may well prove more complicated than those above that figure. Claims may also start out as relatively low value but become more complex as they progress.

The CJC questions the reduction of fixed costs to reflect expected savings made by PI firms no longer paying referral fees.

‘In order to maintain their profile in the marketplace, which is becoming increasingly competitive not least due to the changes effected by the Legal Services Act 2007, firms are likely to have to increase their marketing costs.

‘This is likely to have an impact on their cost base and ought properly to be reflected in the sums recoverable.’

The CJC recommends a proper revision of the figures should wait until 2014 when evidence has been gathered of the work done in PI claims.

Comments

APRIL CHANGES

If the Ministry of Justice is to listen to anyone (it is not listening to Claimants representatives!), surely it must listen to the Civil Justice Council ???!!!

They haven't listened to

They haven't listened to reason yet... why should they start now?

They do not listen because

They do not listen because they do not care.

But, "we're in it

But, "we're in it together"... aren't we?

At least if they ignore the

At least if they ignore the CJC, the judges hearing the JR application might work out that they aren't listening to anyone other than the ABI and its cronies

Finally

Finally, at least some "body" out there has noticed the scavenging tactics that government is aiming to look down at Claimant, who aren't his "buddies". This is really becoming the joke of the decade. It will certainly go down in the history books as precedents that how government intended to push Claimants down by forcing rules down the publics throat.

The proposed costs cuts are a

The proposed costs cuts are a joke...next thing we know solicitors will be earning minimum hourly wages at this rate! Where will that stand the Legal Profession? Never mind holding back to 2014...the whole costs cutting should be stopped. Still, nice to hear someone sticking up for the Claimant's representatives at last...and for that we must thank the CJC.

stupid question?

Forgive me for what may seem like a stupid question, but why should the govt have any say whatsoever in relation to these legal fees?

Claimant solicitors aren't employees of the state. Why, therefore, should they be prevented from setting their own fees?

There are already mechanisms in place to ensure they don't become unreasonablly high.

Hallelujah!!!

Can I believe my eyes? A respected body actually talking sense about the costs cuts that only stand to benefit the insurance companies and their shareholders?
Just checking we haven't recahed 1 April rather more quickly than I thought.................

Crazy Cameron

I am a solicitor but do not do pi.
I have no interest in pi.
Spam from CMC's winds me up
I voted tory in the last election.

However, anyone with half a brain cell can see what is going on here.

The question really is why does the government want to hit the pockets of lawyers (who pay a lot of taxes and create jobs) to benefit insurers who do not? We all know how insurers behave when a claim goes in. They spend shed loads of money resisting even claims that they know have merit. It just does not make sense.

We all know why costs on some cases get so high and it is nothing to do with the Claimant.

Mr Cameron I am a tory but i think you and your posh mates are a bunch of idiots who are so out of touch and so clueless that I despair. As I get older and a little wiser the more I detest politicians and the more respect I have for the legal profession who uphold true values.

The other day i was called an ambulance chaser by a Defendant who owed my client a lot of money (which he admitted) but took objection to the steps I was taking to recover it. The disdain that this person has for me is the same as Cameron et al has for us. Protect big business and the super rish and everyone else can just **** off.

well said md

well said md

Ditto

Very well said.

Fence Sitting

Look MD come off the fence and tell us what you really think

If solicitors cant get

If solicitors cant get organised now and stand up to Ca-moron and his lackies then we are can kiss goodbye to a noble profession. Why are they dictating our fees? They dont pay them? What self-interest is in it for HM Govt? There is none.

It's not just Claimant reps

It's not just Claimant reps this effects of course. Savage job culling will be in almost equal measure within defendant firms, as they're now finally realising.

The reforms are an attack on civil justice, and the legal profession generally. And to our resident troll Kelly Matthews, please don't reply to this using the words "old chestnut"...it's getting soo boring. Maybe you and your insurer friends will be the last ones with your heels wedged in the ground.

The realisation that these reforms are utterly insane finally seems to have been realised by a wider audience. The difficulty will be for someone to explain it in a simple enough way that the politicians, bless them, can understand.

Minimum wage

There could actually be minimum wage issues here and ironic that son of LASPO could actually be contrary to existing low pay legislation.

at last

At last someone is waking up to what is actually going on, the hard bit is substituting expensive £80 a glass "Port", that sends the MP's to sleep on there cosy leather benches, (naturally subsidised by us the taxpayer) to a feckin great big DOUBLE EXPRESSO then the smell the coffee.

Fact is they probably just sussed that if they cant take PAYE/VAT/Corp Tax off us, who the hell is going to pay for their lifestyle and freebies

Why are the government getting involved

the government have no interest in getting involved in what PI solicitors charge, which should be left to the existing guidance which is provided by the court, but MP's who cosy up to the insurance industry and big business have interests in the funding that the large insurance companies can provide for their campaigns and promises of lucrative consultancy seats on their boards. These proposals cannot benefit the innocent person who has been the victim of an accident and can only benefit the insurance industry. So much for standing up for the man on the street.

Is this the judiciary giving

Is this the judiciary giving a ‘heads-up’ in respect of the outcome of the Judicial Review Issued by the APIL/MASS.

As I understand it the CJC advises the Lord Chancellor on civil justice and civil procedure. The advice here in contrary to what he is proposing, so I don’t understand where Mr. Grayling/MOJ can really go from here? Does anyone think the same?

Banana republic time

He may choose to abide by the word of those who actually have some experience...or he may charge on into a thicket of moral turpitude, unconstitutionality, hubris and institutional breakdown unknown in modern times outside third world banana republics.

THe JR hearing

Who chooses the Judge to deal with the application. Say no more.....

Jackson and Fixed Fees etc

All PI lawyers know what is happening and why. APIL have started a JR but despite so many valid and well documented arguments against the changes, the catastrophic consequences for accident victims and the potential damage to the economy generally at a time of triple dip recession, why are we all sat here not trying to win the PR war?? Members of the public don't know what is going on and how it will affect them. Who will inform them? We all need to collectively do something so that public opinion turns in our favour. How much more damage can we allow this government to inflict upon the economy.

If we all contributed some funds to a large scale PR campaign in the next 8 weeks( national papers, radio, TV) to at least make the public aware of how the government has behaved and the consequences, we may achieve a partial U -turn.

If we all did something at a local level, it will soon gather pace at a national level and before we know it the tide may turn.

Government needs to curb fraudlent claims!

"Britons have the weakest necks in Europe"....not because of a inherent birth defect but due to a culture of making false, exaggerated or fraudulent claims. This affects everyone in the country (even claimant solicitors) and the Government must do something to protect the people. Claimant solicitors have played a major role in this and have made significant profits over the years. Now is the time to pay the piper!

""Britons have the weakest

""Britons have the weakest necks in Europe"....not because of a inherent birth defect but due to a culture of making false, exaggerated or fraudulent claims."

No, claim numbers are high here because Britons have good access to legal advice and are aware of their legal right to claim compensation. The govermnent is trying to change that. The criminal who wants to make a fraudulant claim is not going to be deterred (nor more easily identified) whatseover by the proposed changes.

weakest necks in europe?

So Phil, you know for a fact that claimant solicitors have been complicit in fraudulent claims, but you havent bothered reporting them to the SRA? And another thing, even if what you say is true, the correct response is to crack down on fraud, not remove the chances of law abiding people making a claim.
Its your sort of knee-jerk 'punish everyone' reaction that means our Olympic shooting team arent allowed to train in the UK, because criminals were misusing guns-look at the statistics on gun crime now, compared to 80 years ago when guns were legal, and ask yourself how that worked out!
Criminals commit crimes, whether its insurance fraud or armed robbery is irrelevant, Clamping down on the law abiding has never made a difference and never will, but despite the logical absurdity of the argument, people like you still try to support it.

Britons have the weakest necks in Europe

Interesting commentary Phil. Perhaps you could enlighten us with your expertise on the subject of fraud, exaggeration and false claims and tell us how the Courts are simply allowing these cases to be paid willy nilly under the current system. I assume you were aware that these types of cases do get in front of a Judge and that he is required to make a finding.........

I see that it is alleged that

I see that it is alleged that Mr Grayling is now considering increasing the small claims limit to £15000, which will make fixed costs practically redundant anyway. It was somewhat speciously reported in the Torygraph that the increase would mean that Claimants would not have to pay legal costs... Is Mr Grayling unaware of DBA's??

playground conduct

It would appear this was passed to the press only hours after the JR was submitted. Surely Mr Grayling isn't doing this in a spiteful manner and collecting up all the toys so no-one can play and trying to play hardball over this...........however, as each day passes I am getting more and more used to this communist state we're living in......

GJA - you have hit the nail

GJA - you have hit the nail on the head. The Master of the Rolls has dropped such a heavy hint regarding the outcome of the judicial review that if the government do not change course then they really are as intellectually challenged as they appear to be.

PI Legal Aid

I went to see my local MP who told me that the compensation culture had gotten out of control and legal aid shouldn't foot the bill for all personal injury claims any more.

MP's intellectually challenged? Surely not....

Do petrol prices index insurance premiums?

10 years ago a whiplash claim represented about £50 on an average policy I understand.

Now, it accounts for about £90 I understand. (and always treat the insurance industry's figures with huge sceptism)

So a £40 increase in 10 years.

Could someone explain to me why premiums have gone up by about £1500 in this time then please?

Part 36 under the new rules...

As we all expect, Part 36 CPR won't apply to the new one way qualified costs shifting.

This will be interesting when Defendants make a Part 36 CPR offer of settling the case on a 1% / 99% liability basis in their favour won't it...

Part 36 CPR does not have to be a financial offer.

What will happen then?

Changes are not good for the profession,country or the Insured

Changes are not good for the solicitor's profession. It will drain away the best litigators, brains like me (joke) into other areas of Law, worst still into other countries. It is done to possibly reduce premiums charged by the insurance companies, which will never happen in any event, knowing how greedy insurance companies are, in any event. instead it will leave vulnerable claimants unprotected However if it happened, it will encourage more motoring, more cars on the road, bad policy for Green Party and bad for the environment. Ultimately bad for the country in both cases, bad for the profession lose the best solicitors like me ( joke). The government that is trying to curry favour with the insurance companies and voters will live to regret as this will ultimately result in joblosses

It is time to stand up for our profession and our jobs.

Wayward website

BG

If you're going to provide a link to your website you might at least ensure that the various spelling mistakes are corrected first - it doesn't give a very good impression.

Equity of Arms

I am a claimant solicitor who predominantly handles serious injury claims but I do have the odd fast track matter. I welcome any legislation that can deter a criminal from attempting to submit a fraudulent claim. I have not nor have any wish to accept instructions from a fraudulent claimant. I worked and studied hard (and not to mention paid very high fees) to get to where I am. I have pride in my job and do not like to be belittled and judged as an "ambulance chaser". Claimants who have suffered a genuine injury be it a "whiplash" injury or traumatic brain injury should be entitled to quality legal representation. These changes will debase our profession.

I agree APIL should be launching a PR campaign highlighting the government and insurers ignorance of one of the basic principles in civil procedure; equity of arms. These changes are aimed to try and pressurise members of the public away from seeking legal representation and to submit claims directly. How can a litigant in person navigate the system and be on a equal footing with the insurers when negotiating a settlement?

Any rise in the small claims

Any rise in the small claims limit will simply force claimants into the hands of the lowest bidders on DBA's. There will be a surge to non qualified representatives, with unregulated companies springing up and undercutting those solicitors (if any) who do manage to find a working model.

Net result, access to justice in the hands of wide boys (and of course insurers - and the likes of inter-resolve).

Great work Grayling. On the subject of idiots, and childish behaviour, and self-serving greed, Grayling recently said "the government still want to hear the views of stakeholders and the public". Really? I must have missed the govt tv campaign telling the public how these changes will eat into their (reducing) damages, and prevent them obtaining advice from solicitors in many cases, all to the greater good of boosting insurer profits. Anyone else catch that campaign?

Still, the downtrodden public are now so used to government ineptitude that a plan designed to rid them of further rights, demolish an entire industry to the detriment of the UK economy (credit where due...the govt do seem to be VERY good at that, at least) and put health and safety back to the dark ages might not raise many eyebrows.

While we still have the ability in the UK to speak our minds (I'm sure that will go at some point too), I'd like to offer my considerd opinion that Mr Grayling is the latest in a string of idiots who has demonstrated beyond any possible doubt that he does not have the IQ required to safely run a lawnmower, let alone conduct the future of justice.