Firstly, Happy New Year to all our connections. Here’s to a busy and productive 2020.
So what lies in store for costs lawyers as we look ahead?
The one topic that will dominate the year is the reforms introduced in the Civil Liabilities Act 2018. The main provisions of the Act which relate to RTA claims and whiplash will probably come into force during the year. The MOJ is still insisting that the changes will happen in April –
Most commentators still expect them to happen in October at the earliest, but the recent election has effectively removed any real opposition. The biggest change for lawyers is not in the Act itself but in the increase in the Small Claims limit to £5000 in most RTA cases and £2000 in other PI cases. This will see a huge increase in the number of small claims, especially when the Act introduces a tariff for whiplash damages which will see awards for a 24-month whiplash injury reduced from £6600 to a fixed £3275. It will be a rare event for a whiplash claim to avoid the Small Claims Track. The upshot of that, is no recoverable costs. How will lawyers respond? Many cases will cease to be viable and the courts will be swamped with unrepresented parties. The MOJ are working on a portal which will make the process more user friendly for non-lawyers. Everyone agrees that the changes cannot take effect until this is up and running, and available to the public.
In the meantime, we expect that some solicitors will take on cases under a Damages Based Agreement or DBA. The lawyers will agree to be paid by way of a percentage deduction from the award of damages. These agreements have never really taken off in this country mainly due the limits on costs that can be recovered from the other side. But once such recovery is ruled out in many cases, they will become more attractive. We can assist firms in relation to the drafting of DBAs and associated documentation.
We expect firms to face continuing challenges in relation to sums deducted from damages. Last year’s case of Herbert v Hampson Hughes highlighted the need for carefully drafted retainers and risk assessments in all cases where a client might ultimately have to pay some or all the costs. There are firms who are actively advertising for clients to pursue such disputes. It is more important than ever to be confident in your client retainer documents. Cook Legal Ltd can help here by checking or redrafting these for you.
One highlight of 2018 was our successful case of Higgins and Co v Evans which clarified the Law Society’s Standard CFA and what happens when a client dies. This whole area can be a minefield for lawyers and is one in which we have particular interest and expertise.
2020 could see the arrival of fixed costs in Clinical Negligence cases. There has been a working party of claimant and defendant layers looking at this subject following a recommendation by Jackson LJ in 2017. No agreement has yet been reached and any change will not be imminent. Fixed costs might also be pushed in Housing Disrepair Cases, which have become attractive to firms because they can recover costs on the standard basis if the cost of repairs exceeds £1000. The sudden growth in this work, particularly alongside the whiplash ‘reforms’ could see pressure to restrict what is recoverable.
We will be watching all these changes and provide updates when known.
In the meantime, we will continue with our usual work in drafting bills and negotiating costs across all areas of litigation. We are happy to discuss any costs issues that you may have.