The defendant costs specialists

Posts Tagged "fixed fees"

Referral fee debate

By on Jun 4, 2010 | 1 comment

Following on from the Legal Service Board’s recent report into referral fees, which concluded that there was no evidence that referral fees caused consumer detriment, is the Legal Services Consumer Panel’s report which called for greater disclosure of referral fees and better regulation, but found that the payments do have a place in the legal services market and should be allowed to continue. The full story can be read on the Legal Futures website. So, is this all good news for claimant solicitors who favour referral fees and a kick in the teeth for Lord Justice Jackson who wanted a ban? Hardly. The really interesting part of the report commissioned by the Legal Service Board is the conclusion that despite referral fees in RTA claims being typically around £800 (where the solicitors’ recoverable profit costs will often be in the region of only £1,200), there is “no evidence of any detrimental effect on the quality of service arising from the payment of referral fees”. Read that quote again. Solicitors are apparently able to run typical RTA claims for around £400, presumably make a profit and with no drop in the quality of service. It is hard to imagine a finding more likely to strengthen Jackson LJ’s attempt to reduce costs to something more proportionate. The report also explained that typical referral fees in RTA claims have increased from around £200 in 2004 to £800 now. This has been a transfer of profit from solicitors to third parties. One argument in support of the continuation of referral fees is that it generates increased claims, through increased marketing activities raising awareness amongst the public, and therefore promotes access to justice. The basis for this claim in the LSB report was the upturn in RTA claims in recent years, despite the reduction in RTA accidents. The overall drop over the same period in relation to EL claims is dismissed out-of-hand by the report on the basis that EL claims are unconnected to referral fee generated marketing. The report, conspicuously, fails to mention PL claims. I therefore did their work for them and went back to the CRU data so see what that shows. For those interested, it can be found at Appendix...

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Jackson hung out to dry?

By on May 19, 2010 | 0 comments

I had prepared a detailed post advising readers of the Legal Costs Blog which party they should vote for in the General Election. Unfortunately, due to a technical problem, the post did not appear. Readers will now have to wait for the next election before discovering my political views. Professor Dominic Regan, in his blog, the day before the Election, wrote: “I had a thoughtful note from Dominic Grieve QC last night. A Conservative administration is committed to serious costs reform and is interested in but not committed to the Jackson report. The Conservatives would move quite quickly on this. Whatever happens tomorrow the reform of costs will not go away.” So, where does the coalition leave the future of the Jackson Costs Report? Has a hung parliament left Jackson hung out to dry? On Saturday, Regan posted an update confirming his view: “The 219 distinct recommendations made by Sir Rupert Jackson are not going to be ignored by the new administration. … Reform will come.” The political element was always the great unknown in the Jackson Report. At the moment, all bets are off. Oh, OK then. My current prediction is the fixed costs proposals for fast track matters will make it through but not an end to recovery of additional liabilities....

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Exclusive RTA Protocol Article

By on May 12, 2010 | 0 comments

We are always looking for interesting content for our readers and the Legal Costs Blog is absolutely delighted to have obtained an exclusive article from specialist costs counsel Kevin Latham and Mark Friston of Kings Chambers. This article covers the new Road Traffic Accident Protocol. This is the most comprehensive review of the scheme we have seen (and it is clear from a number of readers’  comments how much assistance is urgently required on these muddled new rules).  Not only does this provide an excellent run through of the new scheme, but it identifies a number of problem areas which are likely to form the basis for the next round of the Costs Wars.  For example: "There is a risk that less scrupulous claimants will make offers which are unlikely to be accepted by defendants, only to withdraw them following the total consideration period and thus obtain costs assessed on the standard basis when Part 7 proceedings are issued. It seems that the new regime offers the defendant very little protection from this potential abuse. The point is re-enforced as the defendant’s offer in the S2SP would appear not to attract Part 36 status (as an RTA Protocol Offer) until proceedings are issued under PD 8B and offers made within the S2SP are unlikely to comply with the formal requirements of CPR 36.2. It would thus seem that the only way in which a defendant can protect himself against this unsatisfactory position, is to replicate every offer made within the S2SP and subsequent total consideration period in correspondence as a fully compliant Part 36 offer in the event that the claim falls outside the Protocol at some future point." This is invaluable reading for those dealing with RTA claims.  Read and circulate: RTA Protocol...

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We're all doomed

By on Apr 30, 2010 | 9 comments

I am going to do something that does not come naturally to me. I have going to admit I was wrong. Worse than that, I am going to have to admit to being wrong about three things. This whole process is so traumatic that I am going to have to stagger this over several days. I was wrong when I predicted that the new RTA Claims Process would not happen (see post) either because agreement would not be reached in relation to the rules or because the Jackson Costs Review would torpedo it. Yet, here we are with the process due to launch today. There are those who are already taking bets on how quickly the new "portal of doom" will crash. I’m sticking with my other prediction that the process will produce a flood of satellite litigation, a view shared by Master Hurst who said at the Association of Law Costs Draftsmen’s AGM that the process is so complicated it would generate satellite litigation for "the foreseeable future".  So good news for law costs draftsmen and other costs professionals at least....

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