Fixed costs: where are we?

When Britain voted to leave the EU in June, many lawyers assumed that civil justice would immediately plummet to the bottom of the government’s to do list.

So has it?

We’ve already seen government snub the insurers and pull the emergency brake on George Osborne’s autumn statement plans to raise the personal injury small claims limit and scrap compensation for whiplash injuries.  

But it says it is still ‘committed’ to preparing potential legislation to cut the number of whiplash claims, and will set out its plans ‘in due course’.

As readers will know all too well, ‘in due course’ can often be interpreted to mean ‘we have no idea whether or not we will ever get around to doing this’. I seem to recall that the Ministry of Justice was going to address the problems with the 2013 damages-based agreements regulations ‘in due course’, for example. It still hasn’t.

What about the plan to extend fixed fees more broadly across civil litigation? There again, in a parliamentary answer this month regarding when this reform will happen, justice minister Sir Oliver Heald said the senior judiciary will be developing proposals, and the government will consult on these ‘in due course’.

From what I can gather, not much is actually happening on this front for the time being. After Lord Justice Jackson’s surprise call for a major extension of fixed costs for claims worth up to £250,000 in January this year, the Civil Justice Council moved into action fairly quickly, with a big stakeholder meeting on the issue in March.

But it has not held another one since – suggesting that momentum has slowed.

This broad fixed-costs extension is a ‘when’, not an ‘if’. But in a sense, the longer it is left, the easier it will be. As time goes on, more and more data is being captured by costs budgeting. By the time the reform comes in, all the billing information that the government needs to set the fee levels  – how much it actually costs to litigate and defend a particular type of claim - will have been served up on a Precedent H platter, garnished with a sprig of parsley.

Law firms may have been reluctant to share their billing data to allow guideline hourly rates to be updated. But costs budgeting has forced them into it – no doubt part of Jackson’s cunning plan all along.

But if broader fixed costs are not currently being worked on, does that mean all is quiet on the costs front? Not so – there has been a flurry of activity relating to clinical negligence fixed costs. The promised fixed-fee regime for claims worth up to £25,000 – with a streamlined process to go with them – is being actively worked on, and an announcement on this aspect of costs reform is very close indeed.

Next up will be a fixed-fee regime for noise-induced hearing loss claims.

And then, perhaps, the focus will shift back to the broader fixed-costs extension.

Rachel Rothwell is editor of Litigation Funding magazine

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