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The continued development of fixed fees in Personal Injury claims

Posted by
22 May 2015
Do any Claimant Personal Injury (PI) practitioners out there recall the golden age pre-dating fixed fees? High but easily achievable cost targets and linked performance bonuses? I remember one year more than doubling my annual salary! Sadly, good things seldom last forever….

First came the introduction of fixed recoverable costs on pre litigated Road Traffic Accident (RTA) cases. Then came the Ministry of Justice (MOJ) portal for RTA cases and all the associated fixed fees. Since then Claimant lawyers have had to withstand a reduction to the portal fees on RTA cases, the creation of a portal regime on EL/PL with all the associated fixed costs AND the long-feared introduction of post litigation fixed fees. 

Naturally all these changes have had a number of negative impacts on the Claimant market: staff redundancies, closure of PI departments within practices, a number of practices even going under and so on. Not since Rocky Balboa in the Ivan Drago fight has anyone been able to withstand so many heavy blows, so great credit is warranted to those practitioners who have stood up to the challenge, embraced the changes and continue to turn a tidy profit.

A number of Claimant firms have, quite sensibly, turned their efforts to those few areas of the PI market which have remained untouched - the likes of catastrophic injury, clinical negligence and non-portal disease work. Sadly, it seems further challenges are in the offing.  I read recently that the Association of British Insurers (ABI) has called for urgent reform to the system of industrial deafness claims.

Statistically the number of claims has increased from circa 1,000 in March 2012 to some 3,500 in March 2014, with claims allegedly taking on average 17 months to settle. Of course as deafness claims commonly involve multiple Defendants they are not suitable for use in the present MOJ Portal system and therefore do not attract fixed fees. All of which has led to significantly spiralling costs for insurers. Doesn't it just make your heart bleed?

Not content with being resoundingly victorious on most other PI fronts, the ABI has now suggested an extension of the current portal, or the creation of a bespoke deafness portal, is required in order to reduce costs and settlement times. I guess it was only a matter of time! One suspects the debate will rumble on for some time between the ABI and the Association of Personal Injury Lawyers (APIL) before ultimately settling in the insurers' favour. I for one will watch on with interest.

I also read that the NHS Litigation Authority (NHSLA) has drafted proposals for a fixed costs pilot scheme for clinical negligence cases where liability is admitted, as a result of which solicitors could find themselves receiving as little as £500 for running cases worth up to £25,000 in damages.

The intention, according to the NHSLA, is to ensure that claims against healthcare providers are resolved "fairly and promptly, and at a proportionate cost”. While entry to the scheme would be voluntary, the indication is that there may be cost consequences if an eligible claim is not pursued via this scheme. At present I understand, though I am happy to be corrected, the suggested fee is £500 for early admission with no negotiation, rising to £2,000 where expert advice is needed and the case has gone to arbitration? It does make you worry.

Fortunately it seems the proposal is still in its infancy and APIL has said that negotiations are "nowhere near a conclusion”. Just something else to keep an eye on for now then I guess!

Don't get me wrong, I am all for striking a balance where insurers and particularly where the NHS are concerned. However, as a long-time Claimant PI Lawyer I just hope that the powers do not take too much of the profit out of the industry. PI practice is a difficult trade and one which warrants good rewards for those who succeed in it - when all is said and done they are providing a specialist service which is in high demand. As more and more practicing PI departments continue to disappear, access to justice will only become increasingly difficult for the consumer to find. 

Irrespective of whether you sit on the Claimant or Defendant side of the fence, I would be delighted to hear from you with any views you might have on this and what you feel the future might hold as fixed costs continue to spread throughout the PI industry. Please add any comments below….

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