Some example scenarios with the new costs regime proposed by the MOJ

As a further exploration of the new costs regime proposed by the Ministry of Justice here are various claims and the expected costs calculated using the figures provided by Helen Grant MP.  The costs figure is the amount recoverable from the Defendant on a successful claim.

Please see the letter from Helen Grant MP sent out on 19th November for details of the way these figures are calculated. If I have made any errors please advise.  The figures for costs are without VAT and disbursements.

PORTAL

RTA claim settled whilst in the portal for £3,000 at the end of Stage 2

Costs: £500 (compared to £1,200 now)

RTA claim settled whilst in the portal for £20,000 at the end of Stage 2

Costs: £800 

RTA claim resolved for £24,000 “in the portal” after oral Stage 3 hearing

Costs: £1,300

EL claim resolved for £18,000 “in the portal” after paper Stage 3 hearing

Costs: £1,600

EX-PORTAL

RTA claim settled for £3,000 after exiting the portal but before issue

Costs: £700 (compared to £1,400 now under predictive costs)

RTA claim settled for £9,000 after exiting the portal but before issue

Costs: £1,700 (compared to £2,400 now under predictive costs)

RTA claim settled for £3,000 after issuing but before allocation

Costs: £1,760

EL claim settled for £4,000 after exiting the portal but before issue

Costs: £1,650

RTA claim settled for £1,500 after listing but pre-trial

Costs: £2,955

PL claim settled for £3,000 after issuing and allocation but pre listing

Costs: £3,740

RTA claim settled for £18,000 after exiting portal but pre-issue

Costs: £2,730

EL claim settled for £24,000 after issue before allocation

Costs: £7,430

PL claim awarded £9,000 at trial

Costs: £6,265 plus £690 for advocacy fee.

As can be seen, cases of low value that settle early have very low costs.  Higher value cases, over £15,000 let’s say, that approach trial yield much higher costs.  If a lawyer’s case load was nicely varied over the whole range up to £25,000 this might not be a problem.

Instead, many claimant lawyers will have a case load of lots of fast track cases of low value, say under £5,000, with a sprinkling of higher value cases of say £5,000 to £15,000 and a few between £15,000 to £25,000.  This is perhaps where the theory of how these figures are calculated breaks down.

The problem with these figures to my mind is that at some point core work on a claim doesn’t really vary that much between low value and high value claims.  Taking on a client’s case, establishing liability and obtaining a medical report always take a certain amount of work no matter the size of claim.  That sort of work cannot be for free. Or maybe it can and that is the whole point.