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Costs and Litigation Funding Newsletter March 2017


Fixed Costs Update

LJ Jackson is currently travelling round the country and collating information in order to report to the government on the proposed extension of fixed costs by 31st July 2017.

It has been made very clear by LJ Jackson so far that his grid, (from his talk in January 2016), is not his starting point in terms of any extension.

He is looking at all options and ideas and has been provided with some "pro fixed costs" ideas by Kerry Underwood.

At the Leeds seminar in February, one of the ideas which seemed to obtain some traction was the idea to create the ability for a judge to allocate a case to a fixed costs track or a time basis track (the introduction of an intermediate track).

It also appeared that LJ Jackson is starting to accept that a "1 size fits all" approach will not work (there needs to be exemptions and different fees depending on the type of claim).

Furthermore, at an event in Manchester, it has been reported that the NHSLA stated that they were happy with fixed costs for damages up to £100K.

We will keep you informed with developments.

Any questions? Please contact Andrew at andrew.mcaulay@clarionsolicitors.com or call on 0113 336 3334.

The 88th Update to the Civil Procedure Rules – The impact on Costs Management

The rules have been updated to clarify the position regarding incurred costs following the decision in SARPD Oil International Limited v. Addax Energy SA and another [2016] EWCA Civ. 120’.

In SARPD, the Court of Appeal held that the Costs Management Conference was the time and place for parties to dispute the reasonableness and proportionality of all costs claimed within the parties Budgets, including the incurred costs, and as a result “it would be contrary to the overriding objective to allow Sarpd to try to re-open costs issues [at Detailed Assessment] which it had already had a fair opportunity to address [at the CCMC]”.

This created a situation where parties agreeing, or courts approving the budget could inadvertently approve/agree the incurred costs.  To ensure that incurred costs were not agreed/approved and thus depriving parties of the opportunity for detailed assessment of those costs, we advised that all documents included a caveat that ‘incurred costs are not agreed’.

The rules are to be amended and will come into force on 6 April 2017 to address this situation. The current rules provide that the court will record the extent to which the budgets are agreed between the parties -  CPR 3.15(2)(a).  However, the rules are to be amended as follows:

CPR 3.15 (2) (c) record the extent (if any) to which incurred costs are agreed.

CPR 3.15 (4) whether or not the court makes a costs management order, it may record on the face of any case management order any comments it has about the incurred costs which are to be taken into account in any subsequent assessment proceedings.

CPR 3.18 (c) take into account any comments made pursuant to rule 3.15(4) or paragraph 7.4 of Practice Direction 3E and recorded on the face of the order.

The position regarding recording comments on the incurred costs has been expanded upon and it is now clear that these comments can be taken into account at any detailed assessment.  This was always the inference of the old rules, but there was not a rule specifically stating so.

Any questions? Please contact Sue at sue.fox@clarionsolicitors.com or call on 0113 336 3389.

MoJ confirms: Small claims track limit will increase to £5,000 in RTA whiplash claims and to £2,000 in all other personal injury claims

Following the conclusion of its controversial, 7-week long consultation on soft tissue (“whiplash”) personal injury reforms on 6 January 2017, the Ministry of Justice has now confirmed the increases which will apply in respect of the small claims track limit, in a part one publication released on 23 February 2017, found here.

In addition to a host of reforms relating to offenders in prison and Court procedure, the impending Prisons and Courts bill and accompanying secondary legislation, due to be implemented on 1 October 2018, will increase the small claims track threshold from £1,000 to £5,000 in whiplash related RTA claims and from £1,000 to £2,000 in all other personal injury claims, in line with inflation.

The changes will also bring in fixed tariffs for compensation pay-outs in cases of whiplash and minor psychological injuries (lasting between 0 and 24 months) together with a total ban on pre-medical offers to settle whiplash claims. While the Courts will have the power to increase the fixed awards, this will be limited to “exceptional circumstances”, and will be capped at no more than 20%. 

The news has been welcomed by the insurance industry, with key members heralding the changes as vital in combatting the rise in fraudulent claims.

Those opposing the changes are less optimistic and feel the reforms will greatly impact upon access to justice and in the absence of any formal requirements for insurers to pass on resultant savings to consumers, will only serve to benefit the insurance industry.
A summary of the key changes can be found here.

Any questions? Please contact Hannah at hannah.riordan@clarionsolicitors.com or call on 0113 222 3245.


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