On 31 July 2017 Lord Justice Jackson published his not insubstantial ‘Review Of Civil Litigation Costs: Supplemental Report Fixed Recoverable Costs' (copy here).

LJ Jackson has returned to finish what he started in 2009, namely the imposition of a strict fixed cost regime throughout civil litigation.  While his report is simply at this stage a series of recommendations it should be noted that his previous recommendations were adopted almost entirely by the government in the Legal Aid, Sentencing and Punishment of Offenders Act (2013).  However given the extent of the reforms and the current government's legislative regime we can expect that any implementation will not take place until late 2018.

BLM recently held a Q and A on the implications of the reforms generally, which can be viewed here. A table has been created to help you navigate the proposed costs regimes a copy of which is here. Bear in mind that the costs regime is not currently proposed for mesothelioma claims as these claims are managed in accordance with the procedure in the Mesothelioma Practice Direction. The category for disease claims under fast track band 4 is referred to as Employer’s Liability Disease (“ELD”).

At chapter 5 of his report Jackson has returned to his bête noire, the fast track and the costs thereof.  Section 4 of that chapter is devoted to disease claims with a focus on Noise Induced Hearing Loss claims (“NIHL”). 

Noise Induced Hearing Loss Claims

At Section 4.1 of his report Jackson refers to an appended the mediated agreement from claimant and defendant representative from the CJC working group, which sets out a prescriptive process for dealing with NIHL claims along with a grid of fixed recoverable costs the mediated agreement.  At table 5.1 Jackson sets out the proposed recoverable costs for both claimant and defendant in NIHL claims, despite noting from his extensive reviews of Precedent H submissions the disparity between costs claimed by claimant’s and defendants in personal injury litigation.

The proposed fee structure is as follows:

 
 

 Stage:

 NIHL claims with value less than £25,000

 Pre-issue

 £4,000 + £500 per extra defendant (reduced by £1,000 if there is   an early admission of liability or by £500 if settled before   proceedings drafted)

 Post-issue, pre-allocation

 £5,650 + £830 uplift per extra defendant

 Post-allocation, pre-listing

 £7,306 + £1,161 uplift per extra defendant

 Post-listing, pre-trial

 £9,187 + £1,537 uplift per extra defendant

 Trial advocacy fee

 Not agreed

In addition to the above, a fee of £1,280 is recoverable for the restoration of a company to the register.

Proposals on NIHL claim costs pre litigation

Where there is only one defendant cases will fall under the ‘new NIHL normal case process’ unless defendants elected to join a register for all of their cases to commence within the portal, all insurers of that defendant will need to agree to this.

  • Any single defendant cases begin within the EL/PL portal but fallout will be outside the new capital NIHL process and costs will be paid on the standard basis.

  • Military claims and claims worth more than pounds 25,000 will fall outside of the process and cost regime.

  • The new process and fixed cost regime will only apply to pre-lit claims with up to three defendants. If any of the three defendants raises the following:

    • de minimis

    • a 2nd audiogram

    • defendant's own medical evidence

    • the matter being treated as a test case

This will remove the entire case from the process and fixed costs.

  • When the response has been agreed (it appears that no copy has been attached to the report) a matrix of costing has been provided which looks as follows.

 
 

 Stage: 

 Requirement

 1 Defendant

 2A

 Liability admitted: Settles before claimant’s solicitor has prepared   papers to issue proceedings

 £2,500         

 2B

 Liability admitted: Settles after Csol has prepared papers to issue   proceedings

 £3,000

 3A

 Liability denied:  Settles before Csol has prepared papers to issue   proceedings

 £3,500

 3B

 Settles after Csol has prepared papers to issue proceedings

 £4,000

 

  • Up to three defendants the fee structure adds £500 increase per defendant between stage A and B.

  • All figures above are exclusive of VAT and disbursements.

  • In line with the Third Party (Rights Against Insurers) Act 1930 restoration is envisaged and a fee is permissible per restored defendant of £1,280 exclusive of VAT and disbursements and Counsel's fee where reasonably incurred.

At post litigation

  • Fixed cost regime applies to claims up to three defendants and less. Again, If any of the three defendants raises the following:

    • de minimis

    • 2nd audiogram

    • own medical evidence

    • or a test case

      This will remove the entire case from the process and fixed costs.

  • Military claims and claims allocated to multitrack and claims valued at more than £25,000 are excluded from the NIHL process.

  • Claims which were part of the NIHL process pre-litigation but fall out will attract the fixed cost regime for the pre-litigation portion of proceedings and will then be costs on the standard basis for the litigation costs. 

 
 

Post litigation costs for one defendant claims will be as follows:

 Issued to allocation 

 Post allocation to listing 

 Listing to trial 

 £1,650

 £1,656

 £1,881

  • Each additional defendant successfully pursued applies a 20% uplift per defendant at each stage.  The above figures are exclusive of VAT and reasonable disbursements.

  • Each of the fees above are paid once the matter moves into any of the above stages.

The remainder of Jackson’s proposals relating to noise claims are contained in his appendix 11, copy available here.

Other disease claims

At section 5.1 of chapter 5, a matrix of FRC and paradigm cases is set out. Jackson proposes that all fast track cases be placed into four bands of complexity, Band 1 being the least complex and Band 4 being the most complex. The paradigm cases for each band are:

  • Band 1: RTA non-personal injury claims (popularly known as ‘bent metal’ claims) and defended debt cases; 

  • Band 2: RTA personal injury claims within Protocol), holiday sickness claims; 

  • Band 3: ELA and PL accident claims including RTA personal injury (outside Protocol), ELA, PL, tracked possession claims, housing disrepair, other money claims; 

  • Band 4: ELD claims (other than NIHL), any particularly complex tracked possession claims or housing disrepair claims, property disputes, professional negligence claims and other claims at the top end of the fast track.

Limitation

Despite express guidance from the Court of Appeal (in K R v. Bryn Alyn) that limitation when raised must be dealt with as a preliminary issue, Jackson has strongly discouraged the ordering of preliminary issue trials in the fast track. He noted that in some parts of the country, it is the practice to try limitation as a preliminary issue in ELD claims.

Jackson is of the view this is generally unwise for four reasons: 

“(i) There is much overlap of evidence between limitation and liability;

(ii) The litigation will get hopelessly bogged down if the limitation decision goes on appeal;

(iii) To have two trials of a fast track case drives up costs and is disproportionate;

(iv) If the claimant wins on limitation and then loses on liability, the first trial has been a waste of time”

Nothing is said of the fact that the majority of matters which go to limitation hearing do so because there are no other defences and that where limitation is determined, that generally resolves the case.

There is dispute over whether preliminary trial limitation should form part of the fixed fee regime. Between defendant and claimant lawyers, agreed wording has been proposed and will be put to the rules committee on the issue.

Jackson suggests that if preliminary issue trials are to be allowed (contrary to his view) the same fees as for post litigation costs (as set out above) should be applied.

What this means for you

Until the government publishes a white paper on the proposals it intends to take forward, it is not clear how much of this report will be adopted. In any event it appears that the flavour of the age is further fixed costs, despite the likely impact on the legal profession and the services it provides.