The Civil Justice Council (CJC) has today published its report recommending a table of fixed recoverable costs for noise-induced hearing loss (NIHL) claims. The report sets out the agreement reached by the CJC's working party, chaired by Andrew Parker of DAC Beachcroft as a member of the CJC, on the level of fixed costs, both pre- and post-issue, for routine fast- track NIHL claims involving up to three defendants – these represent the majority of all NIHL claims.

The report and a covering statement from the Master of the Rolls can be found here:

Establishing fixed costs and better procedures for noise claims

The report is being submitted by the CJC to the Ministry of Justice, with a firm recommendation that its findings should be adopted as part of the wider review of fixed costs. The Ministry of Justice has already indicated that it is likely to consult on any recommendations made and the report includes some suggested consultation questions.

Pre-action improvements

The report recommends changes to the pre-action process. These will require claimants to present more detailed letters of claim, accompanied by an audiogram from an accredited audiologist to support the NIHL diagnosis and a schedule of employment from HMRC to verify the claimant's working history.

In turn letters of response should be more specific as to the position taken by the defendants, who are encouraged to adopt the ABI's Guidelines on interaction between defendants and handling insurers, which are published as part of the report.

Further work will be needed on a suitable system of accreditation for audiologists and on drafting rules and protocols to deliver the agreed recommendations, which were beyond the scope of the report.

Fixed recoverable costs

Table 1 from the report, reproduced below, sets out the costs agreed for various stages pre- and post-litigation:

Table 1

Pre-litigation stages

Stage 1 (up to and including the letter of claim – common to all cases and included in 2 and 3)

Stage 2 (cases where liability is admitted)

Stage 3 (liability not admitted)

Stage 2A/3A represent cases where papers have not been prepared to issue proceedings

Stage 2B/3B contain an additional allowance for the cost of preparing papers to issue where incurred.

Post-litigation stages

L1 Issue to allocation

L2 Post-allocation to listing

L3 listing up to but excluding trial

Additional explanation

The figures are for profit costs excluding VAT and disbursements. The pre-litigation stages include any allowance for counsel but post-litigation, counsel's fees may be treated as a disbursement as long as the use of counsel can be "justified".

Cases which settle pre-issue receive one of the applicable stage 2/stage 3 figures according to the number of defendants successfully pursued and whether liability was admitted. Cases which litigate will receive the applicable stage 2B/3B figure and the total of the litigation stages depending on when the claim settles. Separate arrangements will be needed to deal with apportionment between defendants, especially where one or more defendants settle earlier than others.

Fast track trial advocacy fees are not included in these figures. The working party agreed that the current trial advocacy fees for claims below £10,000 in value were too low for NIHL claims but could not agree on the level of advocacy fee needed.

Certain categories of NIHL claim are excluded from the fixed recoverable costs regime: essentially these are more complex claims likely to be allocated to multi-track in any event. The main category of excluded cases of interest to defendants will be those claims where the defendant wishes to obtain their own audiogram or have the claimant medically examined: this underlines the importance of ensuring that the audiogram presented with the letter of claim is from a suitably accredited audiologist.

Restoring dissolved companies to the Register

The report sets out the agreement reached on the costs incurred in restoration proceedings. A figure of £1,280 exclusive of VAT is agreed to cover both solicitors and counsel, with other listed disbursements allowed in addition.

The report also records the working party's disappointment that the implementation of the Third Parties (Rights Against Insurers) Act 2010 last year has not solved the need to restore dissolved companies in long-tail disease claims. The problem is highlighted by the recent decision of the High Court in Redman v Zurich Insurance: [2017] EWHC 1919 (QB). The report calls for a change in the transitional provisions to the Act, to apply its provisions to all claims notified on or after 1 August 2016.

Post-litigation issues

The report recommends the adoption of standard directions in NIHL claims, designed to cover such matters as controlling the use of expert evidence.

The working party recognised that limitation is often in issue in such claims and recommended tighter controls on ordering separate trials on limitation, while recognising their value. The working party could not agree whether a case in which a separate limitation trial is ordered should remain within the fixed recoverable costs regime and the report sets out the views of the claimant group (against inclusion) and the defendant group (in favour of inclusion).

Summary

The report should be considered in conjunction with the recent supplemental report of Lord Justice Jackson on fixed recoverable costs in the fast track. Lord Justice Jackson was aware of the agreement reached by the working party and the CJC's report dovetails with his recommendations.