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| Ashton: 'landmark judgment' |
The Court of Appeal has rejected a major challenge to the predictable costs scheme for road traffic cases in a decision that will affect an estimated 100,000 cases a year.
The court in Kilby v Gawith, led by the Master of the Rolls, Sir Anthony Clarke, decided that claimant solicitors can recover the 12.5% success fee allowed under the scheme, even if there is before-the-event (BTE) insurance in place.
The defendant argued that there was no need for the success fee or additional liabilities to be incurred because the BTE would have funded the claimant's case without them.
However, the lower courts said the rules allowed no discretion and the Court of Appeal agreed. Cases up and down the country have been stayed pending this decision.
The ruling is consistent with previous decisions that the purpose of the rules is to provide fixed levels of remuneration and that the courts will not tamper with them. The appeal judges are understood to have made it clear that insurers' concerns over the operation of the scheme are a matter of policy and that it is not for the court to look behind how the success fee figure was reached.
Amanda Ashton, director of Compass Costs Consultants - which acted for claimant firm Camps in the costs hearing - said: 'By the defendant's own evidence there are potentially 97,000 claims per year affected by this judgment - it is yet another vindication of the fixed costs rules which ease the pressure on personal injury lawyers practising in this field. The spectre of BTE insurance working beneath the surface of a claim of the solicitor's entitlement to costs is removed by this landmark judgment.'
Kathryn McCullagh of Peterborough firm McCullagh & Co, the specialist defendant costs firm which acted in Kilby, said her client was disappointed by the result but not surprised, even though it had a good case.
She added that growing dissatisfaction among insurers about the way in which the predictable costs scheme is working - with evidence of a 'worrying increase' in the cost of additional liabilities - meant 'some insurers will be moved to ask for a revision of the rules'.
Meanwhile, the appeal court will later this year consider four test cases on whether claimant solicitors' failure to declare an interest - specifically their membership of the Accident Line Protect panel - when recommending the Law Society-approved after-the-event insurance falls foul of the old Conditional Fee Agreement Regulations.
Neil Rose
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