Let’s assume, to be generous to ourselves, that we have not bothered getting medical notes to provide to the expert and let’s also assume that in a world of Qualified One Way Costs Shifting we have not concerned ourselves with purchasing After the Event Insurance. With these sorts of cases, some law firms have a policy of obtaining medical notes and some don’t. I’m assuming we’re not to try and be as positive about this scenario as possible especially as on the small claims track you can't normally recover fees for medical notes. If notes are obtained, clearly the amount left for profit costs will be correspondingly lower. Also, £350 is fairly modest for a medical report on average particularly when a medical agency adds their fee on top of the expert’s charges. GP reports can be cheaper but, dare I say it, if they are there is then a corresponding reduction in quality. Again a more expensive report would reduce the amount available to the claimant lawyer as costs.
As it's a DBA then the £1,000 deductible costs would reduce the damages from £4,000 to £3,000. As we recovered the figure of £200 for the contribution to the medical report we have to give credit to the client for this so the claimant walks away with £3,200 in damages. The £200 credit is due to the particular model of contingency fee agreements the government has chosen for DBAs based on the model used in Ontario where the client has to be credited for costs recovered from the Defendant.
We are then left with the balance of £800 from the DBA once we have given credit to the claimant under the Ontario model plus £200 recovered from the Defendant for the fixed costs payable under CPR 27, giving a total of £1,000. We still have to pay the medical report of £350, leaving a balance of £650. Assuming VAT of 20% this leaves the claimant lawyer with a profit costs figure of £541.67.
My conclusion is that with most RTA, EL and PL claims less than £5,000 for general damages, both claimants and their lawyers end up with less under a DBA where the small claim limit is increased to £5,000 than they would with the new portal fees if the small claim limit is not increased. Such a move is not in injured people's interests or their lawyers. So whose interests is it in? Guess.
As further confirmation of my point consider a claim for £2,500, that is half way up to what will be the top limit for general damages on the small claims track. With a DBA at 25% the amount for costs is £625. If we assume that by then all the costs of the medical report will be absorbed by the fixed costs on the small claims track (by for example either the amount recoverable under CPR 27 being increased or, more likely, the costs of the report being fixed by an AMRO-style agreement to £200) then the claimant lawyer's fees are £520.83 once VAT is taken into account at 20%. This effective parity between the legal costs in the median case under a post-small claims limit increase regime and the RTA portal fees for a case of similar size now strongly recommends to me that the portal fees have been set as a vehicle to move the claimant legal world into this regime.
The implication of that of course is that let us say liability is denied on your £3,000 EL claim or you have a £1,500 Low Velocity Impact RTA case the Defendant seems keen to fight all the way. You can issue if you want and you should recover the court fees under the small claims track rules. But you won't recover any more actual profit costs for doing so. Your costs will be just the amount claimed from your client under the DBA, not even the restricted costs the Ministry of Justice is proposing under the FRC.
There has been discussion by the Ministry of Justice about the use of independent medical panels and when you read about this you can't help thinking that one of the main factors is simply to reduce fees payable for medical reports, presumably to bring them more into line with the fixed costs of £200 for reports recoverable under CPR 27.