Looking at the changing world of legal practice. Disclaimer: Please note this does not constitute the giving of legal advice and is only meant as a discussion concerning various legal points. For advice please consult a solicitor. Follow me on twitter @BiscoesDR or find me on LinkedIn https://www.linkedin.com/in/adammanninguk/
Tuesday, 20 November 2012
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.
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
RTA claim resolved for £24,000 “in the portal” after oral Stage 3 hearing
EL claim resolved for £18,000 “in the portal” after paper Stage 3 hearing
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
EL claim settled for £4,000 after exiting the portal but before issue
RTA claim settled for £1,500 after listing but pre-trial
PL claim settled for £3,000 after issuing and allocation but pre listing
RTA claim settled for £18,000 after exiting portal but pre-issue
EL claim settled for £24,000 after issue before allocation
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.