Justice secretary sets dates & confirms cuts
Fixed costs for road traffic accident (RTA) portal cases are to be reduced at the end of April, while the expansions to the portal scheme will take place in July, Justice Secretary Chris Grayling has confirmed.
As well as reducing fixed costs, the reforms include expanding the RTA portal scheme to claims for up to £25,000, and extending it to employers’ liability and public liability claims.
Fixed costs for claims below £10,000 will be cut from between £400–£1,200 to between £200–£500.
Claimant solicitors will be able to recover fixed costs of £200-£800 for claims valued at between £10,000–£25,000, £300–£900 for employers’ and public liability claims up to £10,000, and £300–£1,600 for employers’ and public liability claims up to £25,000.
Last week, the High Court rejected an attempt by the Association of Personal Injury Lawyers (APIL) and the Motor Accident Solicitors Society (MASS) to bring a judicial review against the decision to cut fixed costs.
APIL and MASS argued the decision was unfair because the government consulted insurers but not claimant lawyers and those representing victims when it reached its decision.
However, Lord Justice Elias said it was not the government’s duty to give equal weight to both sides.
“If people deem it to be unfair that is a matter for the ballot box not the court,” he said.
Rod Evans, president of the Forum of Insurance Lawyers, said: “It is pleasing to have a decision that ends the hiatus which has gripped the industry.”
However, MASS and APIL said in a joint statement: “This is a dark day for people who are injured through no fault of their own.”
They warned that injury victims may now find it “impossible to obtain independent legal representation” as a result of the judgment, and that negotiations would “inevitably be biased in favour of insurers”.
According to a Ministry of Justice impact assessment published last week, claimant personal injury lawyers will lose £200m per year when reductions to fixed recoverable costs for RTA portal claims up to £10,000 are introduced.
It stated that if caseloads remained at existing levels then claimant solicitors would lose about £200m in income, as well as “possible” loss of income from lower conditional fee agreement fees. It said the savings to insurers could be passed on to consumers through lower premiums.
About 750,000 claims valued at £10,000 or less were made last year, accounting for 90% of RTA claims.
