Date:

Civil Justice Reforms: MoJ decision on Portal Implementation

The Government's response came yesterday on how it intends to implement the proposed portal changes, subject of course to tomorrow's judicial review from APIL and MASS. While there is a small amount of extra time allowed for implementation of the changes, there has been no alteration in its resolve to significantly lower the level of costs payable for claims worth up to £25k both inside the portal, and for those dropping out. Simon Denyer draws out the headlines and considers the potential impact on the judicial review.

Latest news

In a letter circulated by the MoJ on 19th November, the MoJ set out matrices of fixed costs (FRC) for both portal and non-portal claims. These proposed for stages 1 and 2 within the portal, costs of £500 or £800 for RTA claims and £900 or £1,600 for EL and PL, depending on whether the claims were worth £1-10k, or £10-25k. For claims coming out of the portal, a more complicated matrix was proposed depending on type of claim, stage reached, and value, that consisted partly of a fixed fee, and in part linked to a percentage of damages recovered.

Yesterday's news was that all of those FRC essentially remain intact for RTA, EL and PL accident cases. Claimant lawyers will be disappointed that rumours of the Government being willing to stomach limited increases at this stage proved unfounded. In its response, the MoJ blame a lack of data from the claimant side upon which they could have reconsidered.

The exceptions are these:

  • Firstly, as we saw from the latest drafts of the RTA and EL/PL portal protocols, claimants will now be able to recover as a disbursement the cost of an opinion on quantum in certain cases in the £10-25k bracket where that can be justified. This can be from counsel or "a specialist solicitor". The recent protocols suggest that this will only be where "it is reasonably required to value the claim", and say that "in most cases the lawyer will be able to value the claim". A letter from Mr Grayling accompanying yesterday's announcement refers to this payment being made only in exceptional cases however.
  • Secondly, EL disease cases which drop out of the portal are also to be excluded from FRC pending further work from the MoJ on the costs in those cases as the non-portal matrix table being used by the MoJ is based on figures from the Jackson report which it is now accepted excluded disease claims when it was prepared.

When does all this start?

1.5.13 - the changes in the current RTA portal scheme including the reduction of FRC in those cases.

1.8.13 - the extended portals increasing the RTA limit to £25k and establishing the EL/PL portal up to £25k, as well as the FRC regime for RTA and EL/PL cases dropping out of either portal.

Impact on the judicial review?

There had been rumours that the MoJ would want to move forward in these areas prior to Friday's JR hearing, even though at the same time they will have been preparing for the presentation of their case at that hearing. It would seem that the Minister has decided that his prospects of resisting the JR will not have been harmed and may be improved by setting out some definite proposals and timelines that can be defended on Friday as reasonable. While the JR will be concentrating on aspects such as how the MoJ came to their decision to reduce portal costs in the RTA £1-10k bracket, the Minister will be able to point to the short delays the announcement has permitted, 1 month for the lower value RTA claims, and 4 months for the other parts of the reform package. He may also be able to point to the lack of data which has been put on the table at any stage of this process by the claimant lobby, as referred to again in this consultation.

However, in overall terms we see the signs here are of a Minister who believes, rightly or wrongly, that he is in a strong position for Friday's hearing. He could have concluded this announcement with an indication that the scheme will be reviewed in 12 months, but has not done so, saying only that while there will not automatically be a review in this area, the Government will be prepared to review the position if evidence is presented that that is necessary. Perhaps that will be a theme on Friday, the MoJ saying that they approached these issues post Jackson with an open mind, that the claimant side had their opportunity to present evidence as to what was the real and fair cost of running these cases, but essentially did not deliver it, and that in that light the Government has decided what it thinks the FRC should be to reflect "the amount of work which an efficient and effective provider would undertake".

For the full response to the Consultation "Extension of the Road Traffic Accident Personal Injury Scheme: proposals on fixed recoverable costs"click here.

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

Simon Denyer

Partner

I am the Strategic Legal Development Partner within the Insurance team.

Sectors