Legal Cost Specialists

fixed fees

Extension of fixed costs

By on Jan 6, 2022 | 0 comments

The Ministry of Justice (MoJ) recently announced that it intends the extension of fixed recoverable costs in most money cases worth up to £100,000 to come into force from October 2022. This is, of course, subject to the Civil Procedure Rule Committee redrafting CPR 45 in time.  This itself is a significant undertaking, particularly as “the policy view is to commence a complete re-draft of [it] to simplify and streamline the rules”. As with the implementation of other fixed costs regimes, the new rules will apply to those cases where the accident or cause of action arises after the implementation date, or in disease and equivalent cases where no letter of claim has been issued before the implementation date.  So, this will not be retrospective. The fast-track will be expanded to include “intermediate” money claims valued between £25,000 to £100,000 where the trial should not last longer than three days with no more than two expert witnesses giving oral evidence for each party. Mesothelioma/asbestos, complex personal injury and professional negligence, actions against the police, child sexual abuse, and intellectual property will all be excluded from intermediate cases. It is easy to make too much, or too little, of these changes. The greatest impact is likely to be felt outside the world of personal injury.  A very large number of consumer contractual disputes, commercial claims and more routine professional negligence claims will become subject to fixed fees.  There are two possible ways this may impact the market. Firstly, and no doubt this is the hope of the MoJ, solicitors may increasingly offer their clients fixed fee arrangements broadly in line with the fixed recoverable costs.  This should lead to firms streamlining their processes and changing their approach to litigation.  (There is little point spending two hours drafting a clever letter arguing with the other side over a procedural point if you will not get paid any extra for it.)  This may mean less profit per case.  On the other hand, if the cost of litigation becomes cheaper and more predictable, this may lead to an increase in the number of claims being brought.  This may mean more work, not less. On the other hand, if solicitors remain wedded to the...

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Massive extension of fixed costs announced

By on Mar 29, 2019 | 1 comment

The Ministry of Justice (MoJ) has announced its intention to implement Sir Rupert Jackson’s proposals for extending fixed recoverable costs to most cases worth up to £100,000. However, rather than introducing a new intermediate track for cases worth £25,000 to £100,000, as Sir Rupert had suggested, it proposes extending the fast-track to claims worth up to £100,000. The MoJ has accepted the fixed costs figures set out in the grid proposed by Sir Rupert in his 2017 report: “Sir Rupert consulted with his team of 14 assessors, drawing on a breadth of views and experience, and brought his own expertise to bear in finalising the figures. As such, we consider that the figures have been devised with appropriate rigour and intend to implement them as he recommends.” The MoJ has proposed an uplift of 35% on the fixed costs figure where a party succeeds on a Part 36 offer.  This will replace an order for costs on the indemnity basis. The intention is to make the extended fixed costs regime more watertight and thereby make escaping it harder.  This will clearly require careful drafting. In the event there remains a dispute as to the costs payable, and the matter has not gone to trial with the costs being summarily assessed, there will be a shortened form of detailed assessment, with a provisional assessment fee cap of £500. If that was not enough, the MoJ has stated: “It remains our intention to extend the areas in which costs are controlled in due course: such an extension could include extending FRC to further categories of claims, including claims of higher value, and controlling costs incurred before the first costs and case management conference, where cases are not otherwise subject to FRC.” The matter is now out for Consultation, with closing dates for submissions by 6 June 2019....

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Late acceptance by defendant of Part 36 offer

By on Jul 24, 2018 | 0 comments

Hailsham Chambers has reported on the Court of Appeal decision in the appeal of Hislop v Perde [2018] EWCA Civ 1726. This concerns the correct approach where a defendant accepts a claimant’s Part 36 offer after expiry of the 21 day period.  Many claimants have argued that the claimant should be entitled to recover indemnity costs from the expiry of the relevant period, just as they would if the case had gone to trial and the same result had been achieved.   This argument has been particularly attractive to claimants where fixed costs apply, as an order for indemnity costs will allow the claimant to recover more than fixed costs. The Court of Appeal has now decided in that there is no presumption in favour of indemnity costs on late acceptance of a claimant’s Part 36 offer; and (b) that where this occurs in fixed costs cases the recoverable costs are those defined by section IIIA of Part 45, and the general jurisdiction as to costs in CPR36.13 has no role to play, meaning there is no place for assessed costs. The only way out of the fixed costs regime in such a case is to argue under Part 45.29J that there are exceptional circumstances making it appropriate for the Claimant to recover more than fixed costs. The judge was, however clear that late acceptance of a Part 36 offer should not create a presumption that exceptional circumstances were present: A long delay with no explanation may well be sufficient to trigger r.45.29J; a short delay with a reasonable explanation will not....

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RTA portal fees

By on Jan 11, 2013 | 5 comments

The lobbying over the Government’s proposals to slash RTA portal fixed fees has thrown up some interesting arguments. The Law Society has waded into the debate to argue that there is “substantial evidence” that the RTA portal fee should go up by £100, rather than down by £700. The Law Society has based this on its law management section’s financial benchmarking survey which put the median cost of an employed fee-earner at £40,860, median support staff costs at £12,624 and the median spend on non-salary overheads per fee-earner at £37,992, meaning a break-even point of £97,348 per annum. It states: “It would be usual to calculate that a fee-earner’s billable hours at 1,100 per annum. This would result in a break even hourly rate of £88 approximately (i.e. £97,348/1,100). This is cost only and does not allow for any profit. Using a mark up of 50% (which brings a rate of return on investment of 33%), the corrected rate would be £132 per hour.” It calculates that the proposed two-stage fee of £500 is “unjustifiable and will be unsustainable” as it equates to a rate of £50 per hour on the basis of 10 hours’ work – which is what surveys estimate an average portal case takes to complete – or less than four hours’ work at £130, which the society calculated as the correct rate for solicitors handling this work. It said: “It would be impossible for solicitors to undertake every claim properly in accordance with the RTA protocol and their professional conduct requirements in this amount of time. To do so will result in consumers receiving a less than adequate service… It is likely that such rates will result in many solicitors simply being unable to carry out the work.” At the same time research has suggested that the cost of acquiring personal injury cases is around £700, whether through the payment of referral fees or through own marketing costs. This raises a number of interesting issues: 1. Firms currently undertaking this work recover fees of £1,200. From this amount an average figure of £700 is paid to acquire the case, leaving a balance of £500. The Law Society claims it is “impossible for solicitors to undertake...

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Of course it's a road traffic accident claim

By on Dec 21, 2011 | 3 comments

In costs law you can be sure of only one thing: If something looks like a duck, swims like a duck and quacks like a duck, it’s probably not a duck. Following on from my recent post as to When is an RTA not an RTA?, the decision of Costs Judge Master Campbell in Schneider v Door2door PTS Ltd [2011] EWHC 90210 (Costs) is worth reviewing. The issue being: “did the Claimant, Mrs Schneider, suffer injury in a road traffic accident, in which case her costs are limited to those fixed under the recoverable costs regime in CPR rule 45 Part II; or are they ‘at large’ because the accident was an accident, but not a road traffic accident and accordingly her costs are recoverable without limit, subject to being proportionate and reasonable?” The facts were that the claimant was offered transport by an NHS Trust after a hospital appointment. Following the appointment the claimant was waiting with another patient. Transport was provided by the defendant. The claimant was informed by the defendant that the steps at the side of the transport vehicle were not working. They were supposed to unfold so that the patients could use them to gain access to the vehicle. Instead, the defendant offered the claimant a steep ramp which was for wheelchairs or passage through the central part of the vehicle. She chose the latter. She was holding on to two contact points (one of which was a handle). She placed her foot high up and this was on the floor of the vehicle. As she transferred weight onto the right foot, she felt her hip dislocate. The subsequent claim for damages against the defendant for negligence succeeded with a costs order in the claimant’s favour. The claimant’s bill of costs sought a total of £22,982.91 including VAT and disbursements, whereas it was the defendant’s case that the costs should be limited to those payable under the fixed costs RTA regime in CPR 45 Section 2, so that no more than £800, plus 20% of the damages calculated at £1,000 and a success fee of 12.5% plus VAT together with a reasonable sum for the disbursements listed in CPR.45.10 (2), would be payable. The...

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Fixed fees to be reduced

By on Oct 17, 2011 | 4 comments

Jonathan Djanogly has confirmed that the Government intends to reduce the fixed fees in RTA claims once the ban on referral fees comes in. Can we also expect a reduction in Guideline Hourly Rates, which haven’t been increased this year? A nicely balanced piece on the subject of RTA claims was published in the Daily...

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