Fixed costs regime for civil cases should be extended, Jackson report says

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Aug 01, 2017
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Lord Justice Jackson said that overseas holiday sickness claims should be subject to a fixed costs regime

Times photographer Paul Rogers

Fixed costs in civil litigation should be extended to claims valued up to £100,000, the government’s unofficial judicial guru on legal fees advised yesterday.

Lord Justice Jackson, a Court of Appeal judge, called for wide ranging reforms that would mean creating a regime for cases that until now would have been considered too complicated for fixed costs. The report – which builds on the judge’s 2010 review, which led to a fixed costs system for lower value cases – recommends that regime for “intermediate” track claims. Included would be claims valued at up to £100,000 that can be tried within three days and involve no more than two expert witnesses on each side giving oral evidence.

However, Lord Justice Jackson said that lower value clinical negligence claims involved too much complexity while being “of huge concern to the individuals on both sides”. Therefore, he said, those cases should not be included in his proposals for an intermediate track.

Likewise, the judge said that while he had sympathy for lobbying from small businesses that commercial case valued up to £250,000 should be included in a fixed cost regime, he was not completely convinced. Instead, Lord Justice Jackson called on the government to launch a voluntary pilot for commercial and property cases up to that value in which costs would be capped at £80,000.

Lawyers were divided in their response to the proposals. The Law Society, which represents solicitors in England  and Wales, said it did not oppose “fixed recoverable costs in principle”. But Joe Egan, the organisation’s president, said: “We still have reservations that introducing fixed recoverable costs without robust empirical evidence will negatively affect access to justice, if the impact of these proposals are not carefully assessed. This is work that should be done during the Ministry of Justice consultation period and prior to implementation.”

Brett Dixon, the president of the Association of Personal Injury Lawyers, was more critical. “Costs control rather than costs limit should be the focus in any discussion about streamlining personal injury claims,” he said. However, Dixon said that APIL, too, was “not opposed to fixed recoverable costs so long as the processes are designed to fix the amount of work involved. It is sensible to allow specialists from both sides to negotiate a scheme for lower-value clinical negligence cases and we welcome this recommendation”.

The lord chancellor, David Lidington, said the government would consider the report carefully. “As we have said previously, we will consult before any recommendations are implemented,” he said.

Holiday sickness claims epidemic in cross hairs

Lord Justice Jackson trained his sights specifically on the rising tide of overseas holiday sickness claims, with his report calling for lawyers’ fees to be fixed at the same level as those for low value domestic personal injury cases.

British travel companies and European resorts argue that an epidemic of claims – many of which they allege are bogus – is threatening their businesses. 

Claims management companies and law firms working with them are accused of touting for business, especially around the resorts of the Costa del Sol in Spain. Incidents have been reported of claims managers luring British holidaymakers by telling them that it is simple to make a claim for gastric illness, which will be covered by insurers of package holiday companies and resorts. Holidaymakers are also told that relatively small value claims are generally not queried by the British courts.

Holiday companies also argue that the practice is exacerbated by the lack of a limit on legal costs that lawyers can recover when acting for holidaymakers. Currently, personal injury claims relating to incidents that occur abroad are exempt from a recent tightening on lower value domestic cases in the UK.

However, Lord Justice Jackson called for overseas travel sickness claims to be treated under the same regime as domestic road traffic accident whiplash claims, which ministers have recently reformed. 

The report cited evidence of legal costs that dwarf damages awarded to claimants in cases of holiday sickness. In one case where the claimants alleged a short period of gastric illness while holidaying abroad, the damages were assessed at £3,400 but the legal costs claimed were nearly £9,700. Even after negotiation in that case the costs were finally agreed at £6,000. In an even lower value claim that involved damages of £1,050, the lawyers submitted costs of nearly £6,000 and finally settled for slightly more than £3,100.

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