Legal Watch - What's on the horizon - April 2014

Legal Watch What’s on the horizon April 2014

Introduction The horizon in dispute resolution is hazy but we bring you a summary of what we see as the key developments that we

In This Issue:

can look forward to in the near future.

• Cost budgeting and case management by the courts • Fixed costs • Hourly rates • Damages-based agreements • Discount rate • Whiplash • Insurance Contracts Bill Events Plexus and Greenwoods hold a series of events which are open to interested clients. See below for those being held in the next months: MBIG Seminar | 22.05.14 | London

• Third Party (Rights against Insurers) Act 2010 • Court fees • Law reform (fraud)

Cost budgeting and case management by the courts

Hourly rates

Comment: There has been great concern in both claimant

in December 2013 and the Civil Justice Costs Committee

and defendant camps that the reforms of April 2013 have

was due to report to the Master of the Rolls (as head of the

seen justice between the parties and common sense take

solicitors’ profession) by 31 March. The indications are that

second and third place to an over-prescriptive application

it will be some time yet before we know the outcome.

Comment: The consultation on guideline hourly rates closed

by the courts of the procedural rules. Practitioners have been operating in a climate of fear in which even sensible agreement between the parties has not been permitted. This was causing a front-loading of costs, an excess of court applications and, in some cases, an unexpected windfall to a party where the other side fell foul of the court and had all or part of its claim struck out.

We now hear that a degree of common sense has prevailed

Damages-based agreements Comment: These were legalised as part of the package of reforms intended to replace CFAs where the defendant was liable for the success fee. There has been little appetite for DBAs but it seems likely that in the future there will be reforms to permit hybrid agreements combining DBAs and CFAs, which may be more popular.

and the rules are to be amended to permit parties to agree time extensions of up to 28 days for serving certain documents, without needing to make an application to the court.

Discount rate Comment: It is official: there is no news on if, or when, any change will occur.

Few judges have shown any appetite for dealing with costs budgeting in any detail. It is recognised that there has been no consistency in the way this subject has been approached by the courts. A number of judges have, however, adopted a broad-brush approach to proportionality to reduce costs budgets and effectively cap them. This has probably worked to the benefit of defendants more than claimants.

Whiplash Comment: The government is pressing ahead with its reforms with a further announcement due before the summer recess. The most recent suggestion is that the cost of medical reports will be fixed. There is concern that the proposed medical panels are open to abuse but the

With effect from 22 April, costs budgeting is to be extended

government is insistent that they will be properly established

to virtually all multi-track cases with a value of up to ÂŁ10m

and policed.

and CPR3.15(1) will be amended so that we are likely to see more costs management orders.

Fixed costs

Insurance Contracts Bill Comment: This bill is the commercial equivalent of the Consumer Insurance (Disclosure and Representations) Act

Comment: Another indication from the government is that,

2012. Consultation on the final wording of the Bill has been

in due course, there will be a substantial increase in the

limited and there are widespread concerns that the unless

value of claims subject to fixed cost regimes, perhaps even

some of the text is clarified there could be uncertainty and

as high as ÂŁ250,000.

thus disputes as to how the resulting legislation is to be interpreted.

Third Party (Rights against Insurers) Act 2010

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Comment: Four years after this legislation received royal

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assent it has still to be implemented. The delay results from a need to amend the act principally to extend its scope to

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insured companies entering into administration without a

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court order. These amendments will be made as soon as

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parliamentary time permits, which does not appear to be any time soon.

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Court fees

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Comment: For some years, it has been the government’s

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policy to set court fees on the basis of full cost recovery.

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However, it seems that until now the courts have been

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operating at less than full cost recovery, a situation that it proposes to remedy. It is seen as critical that the courts are

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properly funded if they are to continue to provide access to justice whilst contributing to what is viewed as the ongoing development of a more efficient, modernised court service.

The parties to litigation can therefore look forward to even steeper court fees. Insurers may wish to take this into

Contact Us

account when considering offers to settle claims before

For more information please contact:

they are issued by claimants.

Law reform (fraud) Comment: The Law Commission is considering whether or not to address the issue of fraud in personal injury cases

Geoff Owen Director of Learning & Development T: 01908 298 216 E: gro@greenwoods-solicitors.com

(the alternative is to continue to leave this to the courts).

It is to be hoped that the commission will grasp the nettle and recommend legislation to deprive fraudsters of even the ‘legitimate’ element of any claim they may have, as already applies in first party insurance claims. No doubt the concern will be whether such a step would be in breach of

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the claimant’s human rights.

www.greenwoods-solicitors.co.uk

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The information and opinions contained in this document are not intended to be a comprehensive study, nor to provide legal advice, and should not be relied on or treated as a substitute for specific advice concerning individual situations. This document speaks as of its date and does not reflect any changes in law or practice after that date. Plexus Law and Greenwoods Solicitors are trading names of Parabis Law LLP, a Limited Liability Partnership incorporated in England & Wales. Reg No: OC315763. Registered office: 8 Bedford Park, Croydon, Surrey CR0 2AP. Parabis Law LLP is authorised and regulated by the SRA.