At the end of July, the current protocol for low-value road traffic accident claims will be extended to claims worth up to £25,000, and new protocols will be introduced for employers’ and public liability personal injury claims – draft copies of which have been published. New fixed recoverable fees for claimant lawyers, both within and outside the new and extended portals, have also been published.
But what about defendants’ costs?
Claimant lawyers have been pushing for fixed recoverable costs for defendants for some time. If claimants are restricted in the level of costs they can recover from defendants, why shouldn’t the same be true the other way round? Despite the new qualified one-way costs shifting regime in personal injury, there will still be circumstances (for example, when a claimant rejects a defendant’s Part 36 offer) where the claimant will have to pay some of the defendant’s costs.
Claimant representatives argue that it is only fair that claimants should have certainty over what these costs will be. Knowing the extent of adverse costs exposure would also be a big help to after-the-event insurers in setting premiums at the appropriate level. Sir Rupert Jackson recommended setting fixed recoverable costs for defendants in his Final Report, back in January 2010. And now, it seems, it is actually going to happen.
As the start date for the new protocols approaches, the Ministry of Justice has indicated that it is looking at options for setting fixed costs for defendants – and there is an expectation among industry experts that this is definitely going to happen. But it will not be straightforward. What level should these costs be set at? What data is available? Should the costs be staged? How will the costs take account of the point at which a claimant rejects a Part 36 offer – as the claimant may only be liable for costs after that point? All this must be considered.
In terms of the level of the fees, the claimant lobby would argue that defendants’ recoverable costs should be lower than the (somewhat meagre) sums available to claimants, because defendant lawyers usually get involved at a later stage than claimant lawyers, and the burden of proof lies with the claimant to prove their case. But no doubt defendants will be concerned that too low a fee would put them at a tactical disadvantage compared to claimants.
How precisely the defendant fees will operate, and what level they will be set at, remains to be seen. But given that they will be coming under intense scrutiny from both sides, let’s hope that they will be based on proper data and analysis, with transparency over how they were worked out.
Rachel Rothwell is editor of Litigation Funding magazine, providing in-depth coverage on costs and the financing of litigation.
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