When asked, our audience did not hesitate to confirm that claimants’ costs represent a very high proportion of total claims spend. This fact, combined with Lord Justice Jackson’s ongoing review into the costs of civil litigation and the new MoJ claims process for RTA claims, means that costs are quite rightly a significant current focus.
We asked our audience what they felt was the predominant reason for increasing costs post Woolf.
The response highlights that those attending considered that a combination of factors have contributed to the current problems. We wait to see what proposals Lord Justice Jackson puts forward, and the extent to which there is a political appetite and impetus to implement change.
In a timely move, the day before our seminar, the MoJ announced the level of costs that will be recoverable by claimants’ solicitors for claims falling within the new RTA claims process, which will cover claims arising from accidents occurring from April 2010 onwards. Since the seminar the MoJ has released further detail and a summary of the proposals as they currently stand is set out below.
Defendants and insurers should have significant concerns about some aspects of the proposed process. It is unclear whether there will be further scope to influence the MoJ. For example, the MoJ has decided that, if a settlement is not achieved at the end of stage 2, the insurer should within 10 days make an interim payment of the full amount of its offer, leaving the insurer to seek to recover the excess from the claimant if a lesser amount is awarded by the court.
Change is upon us and all change takes time to adapt to. There will be obvious benefits to opting into the new process. However, we asked our audience to consider whether, if the scheme were extended to employers’ and public liability claims, were they confident their organisation could respond to these changes within the next 12 months?
One must recognise that as usual the penalties for non-compliance do not benefit the consumer. So if you are not able to meet the time limits and by default “opt-out” of the fixed fee structure, one can expect some claimants’ solicitors to gleefully target claims handling inefficiency and gain enhanced costs for their trouble. We have already seen this with an increase in the issue of pre-action disclosure applications some three months and one day post the pre-action protocol letter, with the average costs spend running to £500 to £700 for the mere issue of an application.