The defendant costs specialists

Access to Justice Action Group explains

By on Feb 8, 2012 | 0 comments

I recently commented on the apparent contradiction between Andrew Dismore’s, co-ordinator of the Access to Justice Action Group, letter to the Guardian newspaper predicting that “there will be at least 25% fewer claimants” as a result of the proposed changes to the no win, no fee system and his other prediction, in relation to clinical negligence matters, that the proposed changes would lead to “an increase in the number of cases of 1/3rd”.

Andrew has kindly elaborated.

The prediction that there will be a 25% drop in overall claim number is reached by two routes, firstly, by making a comparison with the number of claims pursued in Scotland. In Scotland, additional liabilities are not recoverable from the other side. There are 25% fewer claims reported to the CRU for Scotland, on a pro-rata basis given the size of the population, compared to the number of claims brought in England and Wales. Scottish Sherriff Court starts compared with county court case numbers produces a similar disparity. It is therefore assumed that if recovery of success fees and ATE premiums ends here, it will lead to claims numbers reducing to a similar level as seen in Scotland.

Secondly, an analysis was undertaken of 69,000 claims pursued via a claims management company. New claims accepted by the claims management company are offered to different firms of solicitors unless and until one is prepared to take the case on a CFA basis. Of these claims, two-thirds were accepted by either the first, second or third firm to be offered the claim. The balance were accepted by the fourth to twenty-fourth firm offered the claim. AJAG predict that it is this one-third of cases that will be considerably less attractive once success fees and ATE premiums cease to be recoverable and therefore estimate that 25% of the total claims currently run will not be taken on.

Different considerations are thought to apply to clinical negligence claims, which represent a tiny proportion of overall claim numbers. Currently a high proportion of claims are accepted by solicitors but then turned down by either the Legal Aid Board or by ATE insurers, and therefore do not proceed. ATE insurers apparently turn down two-thirds of cases presented to them. This acts as a filtering process. If Legal Aid and recoverable success fees ends for these claims it will remove this filtering process and mean more claims are pursued. This will be exacerbated by Qualified One-Way Costs Shifting (QOCS). Without the risk of adverse costs it will encourage more claims to be brought that might not otherwise have been.

Andrew Dismore does not consider there to be a comparable ATE filtering process for most non-clinical negligence claims. Therefore the removal of recoverable ATE premium will not lead to a corresponding increase in other types of claim.

It is not believed that QOCS will lead to any corresponding increase in numbers in non-clinical negligence claims. This is because current Government plans are to allow recoverable ATE premiums in respect of disbursements for investigation expert reports in clinical negligence claims. That, combined with QOCS, means claimants in clinical negligence claims, can litigate with little risk. However, because there is no provision for the claimant’s own disbursements in failed non-clinical negligence claims, the impact of QOCS in that area will not remove the deterrent effect of this risk on claim numbers.

This is the analysis that leads to the conclusion that overall claims will reduce by 25% but clinical negligence claims will increase by 1/3rd.

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