The Civil Justice Council (CJC), the body responsible for overseeing and co-ordinating the modernisation of the civil justice system has issued its final report on fixed costs in noise-induced hearing loss claims.

The report recommends to government that a stream-lined procedure is introduced for the handling of fast-track, noise-induced hearing loss (NIHL) claims, together with a fixed costs regime.

The CJC recommended that the fixed costs regime should be complementary, but not identical, to the more general fixed costs system brought in under what have become known as the Jackson Reforms in April 2013.

The CJC acknowledged that NIHL claims present with special characteristics and complexity. However, the vast-majority of NIHL claims fall within the fast-track financial values and the CJC’s Working Party reckons that even after excluding non-standard cases that a significant majority of NIHL cases would be covered by the proposals.

At present NIHL claims can be dealt with under the pre-action claims Portal and its associated fixed costs regime. However, claims can only proceed in the Portal where there is a single defendant. The majority of NIHL cases involve two or more defendants.

The CJC’s belief is that early evidence of the claimant’s hearing loss in the form of an audiogram provides reasonably objective evidence as to the validity of a claim. The report states:

‘The production of such an audiogram from a reputable source, with the letter of claim together with greater relevant information about the claimant’s working history, including a schedule from the HMRC will significantly assist the defendants in forming an early view of whether the claim is likely to succeed.’

The ideas put forward by the CJC include:

  • Precedents for more detailed letters of claim and response
  • Discouraging re-medical report offers
  • Stricter adherence by defendants and more insurers signing up to the Association of British Insurers’ guidelines on interaction between insurers
  • A restriction on expert evidence with defendants being encouraged to put questions to the claimant’s expert; where a defendant requires its own medical expert, this would take the case outside the fixed cost regime
  • A system of accreditation/approval for audiologists

One area of disagreement on the working party was whether a preliminary issue trial on limitation would take the claim outside the fixed costs regime.

The fixed costs that have been proposed are:

Stage 1 – Up to and including the letter of claim. It was agreed that, in practice, these costs should be subsumed into the agreed costs for cases which settle at either Stage 2 or Stage 3 – see the table below. Obviously, if the claims do not progress to settlement at either stage 2 or stage 3 it is because the claim is not proceeding

Stage 2 – Cases where liability is admitted

Stage 3 – Liability not admitted Stage 2A/3A Cases where papers have not been prepared to issue proceedings Stage 2B/3B – An additional allowance for the cost of preparing papers to issue

L1 - covers proceedings from issue to allocation

L2 – covers post-allocation to listing

L3 – covers listing to trial

All the figures quoted are exclusive of VAT and disbursements.

The pre-litigation fees that become payable would take into account the involvement of counsel at an early stage. The CJC saw this as ‘of benefit to both parties.’

Counsel’s involvement post-litigation would give rise to a disbursement claim in addition to the fixed costs, subject to that disbursement expense being reasonably incurred.

NIHL claims frequently involve the restoration of dissolved companies to the Register of Companies. The CJC agreed figures for separate fixed costs, to be paid in addition to the above fees, per restored defendant successfully pursued. These will be £1,280 inclusive of counsel's fees, plus reasonably incurred disbursements.

The cost of trial would not form part of the fixed costs. At present fast-track advocacy fees are fixed. There was broad agreement that currently these do not reflect the complexity of the cases but the CJC’s Working party could not agree on where they should be set. Lord Justice Jackson in his report on fixed recoverable costs referred to the CJC report and the lack of agreement on counsel’s fees and commented that he thought that for NIHL they should be the same as he proposed for 'Band 4' cases: £1,380.

The proposals are likely to be welcomed by insurers as removing the great uncertainty of claimant’s costs claims, for low value, albeit complex, NIHL claims. Criticism of the proposals include the failure to address the limitation issue that frequently arises in NIHL cases and which could easily be resolved by a requirement for early disclosure of the claimant’s medical records, or at the very least a requirement for a review of the records by the claimant’s expert in their report, although whether this would satisfy defendants with concerns about how thoroughly claimant experts interrogate medical records is a moot point.

The Ministry of Justice has advised that a consultation process on the report’s proposals will take place but so far has not given any dates for this.