Fixed Costs – Where are we?
On 15 February the issue of fixed costs developed following a consultation response by the Department of Health and Social Care.
The consultation response focused on fixed costs for clinical negligence cases with a value of up to £25,000.00. A working group has subsequently been set up to develop a bespoke process for clinical negligence claims, with the aim of producing recommendations in the autumn.
On Page 32 of the response it states that the government is considering all of LJ Jackson’s proposed fixed fee reforms from 2017 and that the Lord Chancellor (David Gauke since 8 January 2018) will announce next steps in due course.
We will keep you posted with developments.
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Are you J Code ready?
The J-Codes are a set of electronic codes proposed by Jackson LJ, where time is recorded in phase, task and activity. These codes were first published in July 2014 and over 3 years later the MOJ have now included guidance in their 92nd update to the CPR regarding phase, task and activity time recording. The MOJ have decided not to adopt the full J-Code structure proposed by Jackson LJ and have published an alternative and apparently simpler version of the Phase, Task, Activity (PTA) approach. That said, J-Codes can still be adopted or the Phase, Task, Activity (PTA) method can be used, it is down to choice.
The electronic bill of costs is mandatory for all Part 7 multi-track claims from 6 April 2018 and therefore Phase, Task and Activity codes (PTA codes) are crucial. J Codes/ PTA codes however are not mandatory, although it is expected that any additional costs associated with the drafting of the electronic bill of costs due to PTA code time recording not being adopted, may not be recoverable on an inter-partes basis.
This only applies to work undertaken from 6 April 2018.
Recording time in line with phase, task and activity will at last enable budgets to be monitored with ease.
More to follow – please look out for our further update that will focus on FAQs surrounding the electronic bill of costs.
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CPR Part 36 and getting it right
As snow continues to fall, February has seen a flurry of Part 36 decisions.
In the clinical negligence matter between JMX (A child by his Mother and Litigation Friend, FMX) v Norfolk and Norwich Hospitals NHS Foundation Trust  EWHC 185 (QB), Mr Justice Foskett found that a Part 36 liability offer of 90% was a genuine offer, which led to the Claimant securing the costs benefits listed in CPR 36.17(4). The judgment highlighted the power that Part 36 offers have, and whilst the judge did not criticise the Defendant for failing to accept the offer at the time it was made, he did stress that “Part 36 was drafted in a way that provides an incentive to a defendant to view seriously and, where appropriate, to accept a claimant's Part 36 offer. The decision not to do so may be perfectly understandable and reasonable even if, in due course, it turns out to have been the wrong one. It is simply a reflection of the litigation risk that each party has to evaluate”.
The Defendant had tried to argue that the offer was not realistic and failed to reflect any realistic assessment of the litigation risks. This, however, was not accepted by Mr Justice Foskett. Whilst a 10% deduction may not, in some cases, amount to much in monetary terms, the judge recognised that in high value serious injury cases worth several million pounds, a 10% reduction would not be an insignificant amount of money, particularly when saved for the public benefit in matters against the NHS.
In the contentious probate case between James v James & Ors  EWHC 242 (Ch), HHJ Paul Matthews found that a Part 36 offer was invalid where it sought to vary the costs consequences following acceptance. CPR 36.13(1) states that “where a Part 36 offer is accepted within the relevant period the claimant will be entitled to the costs of the proceedings…up to the date on which notice of acceptance was served on the offeror”.
However, in this case, the terms of the offer were varied slightly so that the liability for costs was “up to the end of the relevant period or, if later, the date of service of notice of acceptance of this Offer”. The judge found that the offer was not consistent with CPR Part 36, and therefore the costs consequences did not need to be considered. He did, however, take the offer letter into account when exercising his judicial discretion when making the appropriate costs order.
Finally, the Court of Appeal found in the case of Gamal v Synergy Lifestyle Limited  EWCA Civ 210 that where a paying party has made a Part 36 offer and then proceeds to make a payment on account towards their liability for costs, they are effectively lessening the amount of their Part 36 offer by the amount of the payment on account. It is essential that any paying party wanting to make a voluntary payment on account after making a Part 36 offer clearly state that the payment does not reduce the terms of their offer. Failure to do so could result in judgment being awarded that is more advantageous than the Part 36 offer, and hence CPR Part 36 costs consequences applying.
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