Background
31 July 2013 heralded the most recent step in the much anticipated expansion of the MOJ Portal for personal injury claims. The amendments to CPR Part 45 represent both vertical and horizontal expansions of the scope of the Portal Scheme which now not only covers personal injury claims arising out of Road Traffic Accidents, but also Employers’ Liability and Public Liability claims up to a maximum value of £25,000.
These changes are the latest in a long line of reforms implemented by the Government in response to the Jackson Report which have already succeeded in making drastic changes to the legal and economic landscape of the personal injury sector. Whilst the government has thus far resisted the urge to implement the threatened increase of the small claims limit for personal injury claims to £5,000, the further proliferation of fixed costs schemes, which have already been slashed earlier this year, is unlikely to provide much solace to Claimant solicitors.
Procedural Changes
These changes have been implemented by the introduction of a new Pre-Action Protocol for Low Value Personal Injury (Employers’ Liability and Public Liability) Claims to run alongside an amended Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents. These provide that personal injury claims in respect of causes of action arising after 30th July 2013 whether from RTAs, Employer’s Liability or Public Liability claims, which are valued at under £25,000 (but not less than £1,000) will now need to be submitted via the MOJ Portal.
Claims in respect of causes of action arising prior to 31st July 2013 will be unaffected by these changes, meaning that both EL/PL claims and RTA claims in excess of £10,000 will remain outside the scope of the portal. Curiously however, the Pre-Action Protocol draws a distinction between “disease” and “non-disease” claims, the relevant date being the date upon which the letter of claim is served (as opposed to the date the cause of action arises). This distinction also has an important implication in terms of costs (see later).
The key dates therefore are as follows:
|
Road Traffic Accident
|
EL/PL
|
EL (Industrial Disease)
|
Cause of action pre-31/07/2013
|
Portal*
|
Non-Portal
|
N/A
|
Cause of action 31/07/2013 onwards
|
Portal
|
Portal
|
N/A
|
Letter of claim pre-31/07/2013
|
N/A
|
N/A
|
Non-Portal
|
Letter of claim 31/07/2013 onwards
|
N/A
|
N/A
|
Portal
|
*Excludes causes of action arising prior to 30/04/2010
Changes to Fixed Fees
Within the Portal
The fixed fees payable now depend not only upon the type and value of the claim, but also upon the date the cause of action accrued and the date the CNF/Letter of Claim is submitted. The relevant fees therefore are as follows:
|
RTA ‘CNF’ submitted prior to 30/04/2013
|
RTA ‘CNF’ submitted 30/04/2013 onwards
|
|
1k < 10k
|
10k < 25k
|
1k < 10k
|
10k < 25k
|
Stage One
|
£400
|
N/A
|
£200
|
N/A
|
Stage Two
|
£800
|
N/A
|
£300
|
N/A
|
Stage Three
(Paper Hearing)
|
£250
|
N/A
|
£250
|
N/A
|
Stage Three
(Oral Hearing)
|
£500
|
N/A
|
£500
|
N/A
|
|
RTA claims from 30/07/2013 onwards
|
EL/PL claims from 30/07/2013
|
|
1k < 10k
|
10k < 25k
|
1k < 10k
|
10k < 25k
|
Stage One
|
£200
|
£200
|
£300
|
£300
|
Stage Two
|
£300
|
£600
|
£600
|
£1300
|
Stage Three
(Paper Hearing)
|
£250
|
£250
|
£250
|
£250
|
Stage Three
(Oral Hearing)
|
£500
|
£500
|
£500
|
£500
|
Outside of the Portal
Although the original RTA Portal scheme was generally considered to be a success, the costs consequences of cases ‘falling out’ of the Portal and remaining within the Portal were sometimes counterintuitive. For instance, in low value claims, a Defendant would be liable for lower costs if it failed to engage with the Pre-Action Protocol and then settled the claim as soon as it fell out of the Portal.
In higher value cases, it was usually in Claimant solicitors’ interests for cases to fall out of the Portal as remuneration on a time spent basis was more profitable.
This has not gone unnoticed and it is perhaps unsurprising that costs recovery in such circumstances has now been limited by way of a secondary “Fixed Recoverable Costs” scheme.
This applies to all RTA, EL & PL cases (excluding disease cases) and essentially constitutes a slightly more robust version of the predictive costs scheme that has been in place for claims prior to the introduction of the Portal.
The Fixed Recoverable Costs scheme does provide one final opportunity for escape. CPR 45.29J provides that a party seeking to escape fixed costs may apply to have their bill provisionally assessed by the Court. Should the bill be assessed at more than 20% of the fixed fees then the receiving party will be entitled to recover the assessed sum; failure to achieve the 20% increase will result in an Order for costs in favour of the paying party.
As mentioned above, disease cases are not subject to the Fixed Recoverable Costs Scheme and therefore once these exit the Portal costs are payable on the standard basis. The legal distinction between “injury” and “disease” is therefore going to prove important, not only in terms of whether a claim should/should not have been correctly commenced on the Portal (i.e. whether the key date is the date of the injury or letter of claim) but also whether a party is limited to recovery of fixed fees.
The applicable fees for cases which have left the Portal are as follows:
Pre-Issue
|
1k < 5k
|
5k < 10k
|
10k < 25k
|
Road Traffic Accident
|
Fixed Costs
|
Greater of £550 or £100 + 20% of damages
|
£1,100 + 15% of damages over £5,000
|
£1930 + 10% of damages over £10,000
|
Escape
|
+ 20%
|
+ 20%
|
+ 20%
|
Employers’ Liability (excluding disease claims)
|
Fixed Costs
|
£950 + 17.5% of damages
|
£1,855 + 12.5% of damages over £5,000
|
£2500 + 10% of damages over £10,000
|
Escape
|
+ 20%
|
+ 20%
|
+ 20%
|
Public Liability
|
Fixed Costs
|
£950 + 17.5% of damages
|
£1,855 + 10% of damages over £5,000
|
£2370 + 10% of damages over £10,000
|
Escape
|
+ 20%
|
+ 20%
|
+ 20%
|
Post-Issue
|
Pre-Allocation
|
Pre-Listing
|
Pre-Trial
|
Advocacy Fee (Trial)
|
Road Traffic Accident
|
Fixed Costs
|
£1160 + 20% of damages
|
£1880 + 20% of damages
|
£2655 + 20% of damages
|
£500 (to £3,000)
£710 (£3k - £10k)
£1070.00 (£10k -£15k)
£1705
(> £15k)
|
Escape
|
+ 20%
|
+ 20%
|
+ 20%
|
N/A
|
Employers’ Liability (excluding disease claims)
|
Fixed Costs
|
£2630 + 20% of damages
|
£3350 + 25% of damages
|
£4280 + 30% of damages
|
£500 (to £3,000)
£710 (£3k - £10k)
£1070.00 (£10k -£15k)
£1705
(> £15k)
|
Escape
|
+ 20%
|
+ 20%
|
+ 20%
|
N/A
|
Public Liability
|
Fixed Costs
|
£2450+ 17.5% of damages
|
£3065 + 22.5% of damages
|
£3790 + 27.5% of damages
|
£500 (to £3,000)
£710 (£3k - £10k)
£1070.00 (£10k -£15k)
£1705
(> £15k
|
Escape
|
+ 20%
|
+ 20%
|
+ 20%
|
N/A
|
Whilst the purpose of these changes is to continue to reduce the costs of litigation, it is may be that this is also a sign of an anticipated increase in the number of claims leaving the Portal as insurers are more inclined to resist higher value claims and allege contributory negligence within EL/PL claims. In certain circumstances, however, the greater certainty of the parties’ potential liability for costs both in and outside the Portal may inform how a case ought to be conducted. In a case of contributory negligence, for example, it may be more economically viable for a Defendant to admit liability in full and remain within the Portal than to take the point and end up with any potential savings wiped out by increased costs. The changes will provide challenges and opportunities to both sides and lawyers will certainly need to adapt to survive.