The High Court today threw out a challenge to a new fees regime expected to cost personal injury firms £200m a year.
The Association of Personal Injury Lawyers and the Motor Accident Solicitors Society were challenging a decision by the Ministry of Justice to cut fixed fees for cases managed through the RTA Portal. Claimant solicitors argued that the government had taken the decision without proper consultation.
Giving judgment, Lord Justice Elias (pictured) said it was not the government’s duty to give equal weight to polar opposite arguments.
‘If people deem it to be unfair that is a matter for the ballot box not the court,’ Elias said.
The Law Society, which had intervened in the case, said that it regretted the failure of the action. Desmond Hudson, chief executive, said: ‘We remain deeply unhappy with the new recoverable costs rules and the process by which the government made its decision. However it was clear that the decision, however unfair we considered it to be, was going to be difficult to challenge.
‘We will continue to impress upon government the need to ensure that those injured through no fault of their own need to be able to seek redress, without putting themselves in severe financial difficulties.’
In a joint statement, APIL and MASS said: ‘The vast majority of injured people have no knowledge of what their injuries are "worth" in terms of damages, so such negotiations will inevitably be biased in favour of the insurers. A recent independent survey found, for example, that 70% of people would not know what level of compensation to claim for a whiplash injury.
‘This is a dark day for people who are injured through no fault of their own. We can only hope that the government does not take this judgment as a licence to continue to ride rough-shod over the needs of vulnerable people in the future.’
James Dalton, head of motor and liability at the Association of British Insurers, said: ‘The judgment is common sense and good news for customers, clearing the way for their premiums to lower as unnecessary legal costs are stripped out of the system. It is good to know the government’s package of reforms remains on track and the benefits to customers have not been derailed.’
Rod Evans, President of the Forum of Insurance Lawyers (FOIL) added: ‘It is pleasing to have a decision that ends the hiatus which has gripped the industry. We now all know where we stand. It's time to look ahead and start moving towards making the planned reforms work successfully in the best interests of clients on all sides as Lord Justice Jackson envisaged.’
The High Court had heard that claimants were left out of discussions completely in the run-up to a meeting between insurers and the prime minister on 14 February last year.
Instead, a series of emails was sent to insurers, including one from the Cabinet Office that stated ‘this looks good, I think we’re getting close’.
In his submission, Paul Nicholls QC, representing the Association of Personal Injury Lawyers, said: ‘The process involved consulting with insurers. It was not just saying "we’re abolishing referral fees – will it have any relevance?" The government came to a decision in the light of what the insurers say to it. The insurers are a party to the decision-making process. It is more than consultation, it is a negotiation.’
However the MoJ argued that there was no consultation with insurers before or at the 14 February summit, which was held simply to gain agreement on cutting premiums.
The rolled-up hearing amalgamated two stages in which permission for the judicial review to proceed is considered based on submitted papers.
It came in the week that justice secretary Chris Grayling confirmed that fixed recoverable costs for RTA Portal claims up to £10,000 will be cut from £1,200 to £500. The new regime will come in to force at the end of April.
New protocols extending the portal scheme to £25,000 and to employer and public liability claims will be implemented from the end of July.
Fixed costs for RTA claims worth up to £25,000 will be £800, whilst employer and public liability costs will be £900 for lower-value cases and £1,600 for cases up to £25,000.