Legal Cost Specialists

Posts made in February, 2009

Put an end to excessive legal costs says MDU

By on Feb 12, 2009 | 0 comments

The following comes from a Medical Defence Union press release dated 1 February 2009: In an editorial in its Journal published this week, the MDU, which represents over half of UK doctors, questioned the fairness of Conditional Fee Agreements (CFAs), which account for around 19 per cent of UK medical cases brought against MDU members. It revealed that claimants’ solicitors may demand 50 per cent higher hourly rates than defendants’ solicitors and that the costs awarded in cases brought under CFAs were significantly higher. For example, in the last three years, in those litigated CFA cases where the average damages were £5,000, the average claimants’ costs were more than four times higher at £22,000. Dr Karen Roberts, MDU medico-legal adviser and Journal Medical Editor said: “Of course, claimants who have been negligently harmed by their doctor should be compensated, but a system that provides solicitors’ firms with rewards which dwarf the value of a claim needs to be reformed. “The number of clinical negligence cases the MDU sees is not increasing, but the cost of settling cases is rising by more than the rate of inflation. Legal rulings such as the recent Thompstone Judgment can make a difference, which is particularly dramatic for the NHS because it has so many high-value claims for babies who suffer neurological damage. MDU members’ claims, which arise out of care delivered in the primary and independent sectors, are not affected to the same degree and members will not see a dramatic rise in their subscriptions. However, in common with the NHSLA, we see one of the key inflationary factors as the excessive legal costs awarded to claimants’ solicitors. I t cannot be right that legal firms should continue to receive payments out of all proportion to the amount of damages awarded, particularly when these costs are funded, ultimately by the taxpayer.” In the Journal editorial, Dr Christine Tomkins, Deputy Chief Executive of the MDU proposed a two-fold approach to addressing the issue of CFA costs. She wrote: “We propose first that the inequities introduced by very high success fees could be addressed by capping the success fees chargeable by claimants’ solicitors in CFA funded negligence cases. Second, we suggest there should be a...

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New fixed fees v old fixed fees

By on Feb 11, 2009 | 1 comment

In an earlier post I discussed the proposed new claims process and questioned what the relationship would be between the proposed new staged fixed fees under the new claims process and the existing fixed predictable costs (CPR 45.7-45.14). It was far from obvious how the existing fixed fee system could survive alongside the new proposed fixed fees. Equally, it seemed contrary to all common sense to scrap a system that had just about bedded-in and was, for the most part, working reasonably well. It appears that this problem has been giving those responsible for trying to draft the new rules similar headaches. At last year’s Motor Accident Solicitors Society annual conference, Janet Tilley, who sits on the Ministry of Justice stakeholder group, told the conference that certain issues had been "parked", including the interface with the current predictable costs regime. Having abandoned the idea of having the new claims process cover anything other than low value RTAs, surely the sensible way forward was simply to introduce some simple, staged, fixed fees for the litigated cases on top of the current fixed fees, and dispense with the new claims process idea entirely. The failure to introduce fixed fees for all stages of low value RTAs was the main weakness in the existing scheme and could have been easily solved. It will be fascinating to see how the problems created by the proposed new claims process and the proposed new staged fixed fees will be...

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Offers to settle costs

By on Feb 10, 2009 | 1 comment

One of the more unfortunate costs provisions in the CPR is the general presumption that the receiving party is entitled to the costs of the detailed assessment proceedings. This encourages some receiving parties to submit inflated and unrealistic bills and, unless the paying party makes an offer that they consider puts them at real risk, pursue the matter to an assessment hearing without making any attempt at settlement or making any offers of their own. It is worth mentioning at this point that an offer to settle a costs claim made under Part 47.19 does not carry any automatic consequence, unlike a Part 36 offer. The courts certainly do place enormous weight on Part 47.19 offers but it would be a mistake for either party to think that beating such an offer is determinative. However, the approach of failing to actively engage in negotiations carries its its own dangers. CPR 47.18 lists the various factors that the court "must" have regard to when deciding whether to make an order other than that the receiving party recovers their costs. This includes the conduct of the parties and the amount by which the bill is reduced. Referring to the case of Butcher v Wolfe [1999] 1 F.L.R. 334, the Court of Appeal in Codent Ltd v Dyson Ltd EWCA Civ 1835 stated: "The second point to be derived from the case of Butcher is that there is an obligation to negotiate, placed upon the parties, which, as that case held, was not limited purely to family proceedings. A party who has refused a Calderbank offer point-blank and failed to negotiate might be penalised in costs if such refusal was unreasonable." This approach has been reemphasised by Jackson J (now Jackson LJ) in Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd [2008] EWHC 2280 (TCC) where he held that if one party makes an offer to settle a claim which is nearly but not quite sufficient and the other party rejects that offer outright without any attempt to negotiate, then it might be appropriate to penalise the second party in costs. In my experience, judges are willing to apply this reasoning to detailed assessment costs. Further, even where (rarely) I have...

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Welcome to The Legal Costs Blog

By on Feb 9, 2009 | 0 comments

Welcome to the new Legal Costs Blog. Although the blog is officially launching today, we have added some content already and some archive material to give you an idea of the kind of thing to expect. Please browse around and leave a comment as to what you think and let us know if you have any suggestions for future topics. Part way down the page, on the right hand side, you will find a box to enter your email address so you can subscribe and receive any future posts straight to your email...

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