Extending fixed costs will lead to poorer outcomes for personal injury claimants24 February 2017
Thompsons responds to Lord Justice Jackson’s Review of Civil Litigation Costs
Eight years on from Lord Justice Jackson’s Review of Civil Litigation Costs, the case for fixed costs is now weaker than ever, Thompsons Solicitors has argued in its contribution to Sir Rupert’s latest review of costs in personal injury law.
In a system of fixed recoverable costs, the fee paid to solicitors for their work on a case is determined by a fixed tariff instead of being fairly assessed by a judge on a case-by-case basis. Sir Rupert is proposing that the scope of the existing fixed costs regime covering accident claims up to £25,000 now be extended to claims involving much more serious, life-changing or fatal injuries, potentially up to a value of £250,000.
This, the firm believes, would mean that the complexity and difficulty of establishing the extent of and liability for an individual’s injuries, particularly when they are very serious, may not be fully and fairly taken into consideration when costs are assessed.
Thompsons opposed the introduction of fixed costs after Sir Rupert’s 2009 report and has questioned the rationale for this latest move to further extend that system.
“Eight years ago, Lord Justice Jackson’s fixed costs recommendations were accepted in principle by the government but the actual figures he proposed were then hacked back after pressure from the insurance lobby. We opposed fixed costs then and our subsequent experience only reinforces our view that they have a negative impact both on injured people and on workplace health and safety.
“Insurers will conveniently fall back on attacking any opposition to fixed costs as lawyers protecting their profits, but the real losers would be injured people who will struggle to obtain justice.
“We know from our own cases that the costs incurred by solicitors in running a case under the current fixed costs regime regularly far outweigh costs we recover. Personal injury cases are often highly complex and require proper investigation especially when deep-pocketed insurers can instruct their lawyers to throw up all manner of legal challenges to a claim.
“Fixed costs have always been a major disincentive for lawyers to take on challenging cases - it’s easier to stick to rear-end shunts than take risks. One way some will try to get around the tight margins is to play fast and loose with client care, having inexperienced staff provide advice, or under-settling cases in a rush to save time and money.
“Fixed costs encourage ‘conveyor belt justice’ – under-compensating the injured and short-changing the dedicated lawyer whilst delivering excessive profit for the insurer who can choose to draw the process out in a war of attrition. Their expansion to cover up to 99% of personal injury cases would sadly be further evidence that this government cares very little about injured people but a great deal about the privileged few insurance executives and shareholders who stand to benefit.
“Thompsons is committed to upholding the best standards of our profession. We give our clients the very best possible service and secure them the highest possible level of damages. That pledge would be impossible to fulfil if we were asked to run cases at a loss because costs were fixed at an uneconomically low level.
“We urge Lord Justice Jackson to take a fully evidence-led approach to his review and not to be rushed into an unjustified and unnecessary extension of fixed costs that would do injured people no favours at all.”
You can find Thompsons’ full response to the consultation here.
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