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.