It has recently emerged that the Government has accepted all of the 26 recommendations put forward by the Insurance Fraud Taskforce in their report last January.
Jackson LJ has recently given a lecture on fixed costs and the future for civil litigation, given the Government's intentions to extend the regime.
Proportionality was one of the rules in relation to costs brought about by the 2013 reforms. In this lecture, he highlighted the existing debate surrounding the need for supplementary guidance in the form of a practice direction, despite CPR r44.3(5) already setting out five factors to take into account. Jackson LJ agreed with Lord Neuberger MR that a practice direction would not provide assistance. Instead, Jackson LJ opines that "the best way to satisfy the request for clarification is to convert the five identified factors into hard figures: in other words, to create a fixed costs regime."
He also made it clear that the figures he proposed in January were by no means final, but to trigger further discussion of the issue. Although Jackson LJ proposed fixed costs for claims up to £250,000, in a panel session following the lecture, Duncan Rutter, President of FOIL, said this figure was not a magic number and that there was no reason it could not be higher.
A draft protocol will be provided to the Department of Health for its consultation on fixed costs in clinical negligence claims, but the proposed start date of October 2016 now seems unrealistic. Senior judges have recently agreed with Jackson LJ that clinical negligence cases should not be "cherry-picked" for the extension of fixed costs, but should include the fast-track in its entirety and low-end multi-track cases. However, Professor Dominic Reagan has highlighted that it will "shed no light upon proportionality in cases worth more than the fixed costs limit."
Jackson LJ's proposals that fixed recoverable costs should be introduced in all fast-track cases (before multi-track cases are assessed) was accepted in respect of personal injury cases in 2012, excluding employers' liability disease cases. In his lecture he highlighted that "fixing recoverable costs for all remaining track cases is unfinished business." Indeed, he proposes that a fixed costs regime should be applied for lower multi-track cases, given our three years' experience with costs budgeting. Jackson LJ highlighted benefits of fixed recoverable costs including "certainty, the saving of process costs and an adverse costs risk which is always proportionate."
It will be interesting to see if fixed costs are also extended to employers' liability disease cases, given that Jackson LJ highlighted that they are "not unsuitable" for fixed costs and the reason they were not included initially in the regime was simply because the work had been suspended due to the General Election. In fact, a grid of fixed recoverable costs is currently being developed by a CJC working group.
A move to fixed costs is likely to be welcomed by insurers, as it will further limit claimant solicitors’ attempts to incur disproportionate legal costs. The Federation of Small Businesses found a majority of SMEs in favour of fixed costs for business disputes up to £500,000. The change may force more claimant firms out of market, or into further consolidation, and may lead such firms to capitalise in other areas; perhaps disease cases if fixed costs are still to be excluded.