Claimant groups have formally begun a legal challenge to the government’s plans to cut personal injury fixed costs.
The Association of Personal Injury Lawyers (APIL) and Motor Accident Solicitors Society (MASS) have jointly applied for a judicial review of the justice secretary’s decision to cut fees for claims in the RTA Portal.
Last November it was revealed the MoJ intends to reduce recoverable costs for RTA claims under £10,000 from £1,200 to £500 from 1 April. Fixed fees will also apply for the first time to RTA, employer liability and public liability claims up to £25,000.
The judicial review will focus on the way the fee cuts were decided.
The government has accepted the insurance industry’s analysis that solicitors’ costs can be reduced as they will be no longer be paying referral fees. The decision followed two summit meetings last year between ministers and the insurance industry.
In a joint statement, APIL and MASS said: ‘Fees in the current scheme were not calculated on the basis of referral fees. So, by consulting only with insurers, the government’s proposal to make these cuts is both unfair and based on a misinterpretation of the facts.’
The groups say their judicial review is underpinned by concern that the proposed cuts will make conducting cases through the portal unaffordable.
With the vast majority of injured people having no knowledge of what their injuries are worth in terms of damages, they argue, such negotiations will be weighted in favour of insurers.
The government started an informal consultation before Christmas to hear opinions from insurers and the legal profession.
An MoJ spokesman told the Gazette there is no further update on what the costs will be.
The department has also still to update its position on the extension of the portal, having announced before Christmas it was to put back the original 1 April deadline.
James Dalton, head of liability and motor at the Association of British Insurers, said: 'It is no surprise that claimant lawyers are attempting to derail these long-signalled and crucial reforms. This is an unhelpful move designed to preserve the excessive fees earned by ambulance chasers at the expense of honest car insurance customers. We should all be working together to deliver a compensation system that works for genuine claimants and taxpayers, rather than seeking self-serving delays to the reforms.'