Claimants call for review of stagnant fixed costs

Claimant representatives have called on civil justice rule-makers to refresh fixed costs that have been unchanged for almost 10 years.

The Association of Consumer Support Organisations, a trade body for claimant companies, said fixed costs for certain services are in need of immediate review.

Costs for running personal injury cases have not been revised since July 2013 and there is presently no mechanism to ensure their review. Figures calculated by ACSO show that fixed costs for RTAs settling at more than £10,000 were set at £800 in 2013. To keep pace with inflation, that should now be £1,020.

For an initial medical report in a similar injury case, fixed costs were set at £180 in 2014. Including inflation at RPI, producing the report should incur costs of just under £225 now.

ACSO director Matthew Maxwell Scott said the result is that law firms are being squeezed and forced to abandon personal injury work because their outgoing costs are rising higher than the costs they can recover. He added: ‘There is an elephant in the room when it comes to inflation and the FRC regime. While PI costs have remained static for almost a decade, elsewhere ministers have committed to a review of the discount rate every five years. 

‘The freezing of rates for so long means dramatic real-terms cuts for claimants, their representatives and for medical experts and there has been no explanation for this.’

ACSO points out other areas of inconsistency where reforms have been made to damages and guideline hourly rates while fixed costs have stayed the same. Before May 2021, RTA claims valued over £1,000 were classed as fast-track cases and the legal representative was entitled to fixed costs. Now, many of those claims under £5,000 are in the small-claims track and are not subject to recoverable legal costs. Similarly, the EL/PL small-claims limit was shifted from £1,000 to £1,500 in April 2022.

Guideline hourly rates (GHR), meanwhile, were adjusted last year when the Civil Justice Council recommended that inflation ought to be applied to the fees solicitors could receive.

The group said the effect of an increase in GHR was an acknowledgement that costs across the sector are increasing because of economic forces. It added that the current cost-of-living crisis will be a factor in considerations during the ongoing re-review of GHR being undertaken by the CJC.

‘Fixed costs are prescribed by law and are thus not open to challenge by the paying party, making their regular review all the more important in the context of safeguarding access to justice,’ added Maxwell Scott. ‘The government has already slashed the fees paid to lawyers representing injured people; added to this a failure to review FRC in a sensible manner risks many law firms beginning to refuse cases because they are uneconomic or even leaving the market altogether.’

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