Costs forum moves ahead

Civil Justice Council: predictable costs could extend to employers' and public liability cases

A move to extend the predictable costs regime for small road traffic cases to similar employers' and public liability cases gained momentum last week following a high-level gathering of industry experts.


The Civil Justice Council's (CJC) latest 'big tent' costs forum, bringing together the major players from across the field - including Court of Appeal judges, top solicitors and insurers - also saw the first moves towards drawing up a 'pre pre-action protocol' that would encourage insurers to make early admissions of liability following a basic initial letter before claimant solicitors begin racking up costs.


The forum - to which the Gazette's sister publication, Litigation Funding, had exclusive access - heard that the road traffic scheme, with predictable costs for cases that settle pre-issue for less than £10,000, has largely worked well, bringing down the length of cases and improving cashflow for claimant solicitors.


There was support for extending the scheme, with one leading insurer in the employers' liability field claiming that the cases were sufficiently predictable to introduce the regime. He said his company settled 85% of such claims without any issue on liability. The forum was conducted under Chatham House anonymity rules.


Claimant solicitors were more cautious, insisting that there must be statutory mechanisms to ensure regular reviews of the levels of any predictable costs.


Given the concerns about frontloading of costs, a 'pre pre-action protocol' would see a solicitor do little more than send an initial letter to the insurer, giving 14 to 28 days to admit liability before the work begins in earnest.


There was also interest in the creation of a costs council to provide advice to the judiciary on setting guideline hourly rates, fixed fee levels and other related issues.


Delegates recognised the need to look at other funding methods, especially with group actions becoming increasingly difficult to get off the ground. Plus there were concerns that the conditional fee agreement (CFA) regime may not be secure in the long term, mainly due to continuing doubts over the after-the-event insurance market.


Court-controlled contingency fees as exist in the Canadian province of Ontario - rather than the US version - provoked cautious interest, and a plan was put forward for group actions that would see legal aid cover generic costs, which would be recoverable by the Legal Services Commission with a success fee, while individual's costs were covered by CFAs.


The Master of the Rolls, Sir Anthony Clarke, said consensus is 'of great importance.. Of course differences remain as to how costs should be assessed and as to how civil litigation should be funded. However, the forum [achieved much].'