Saturday, 23 February 2013

The Final Countdown...

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 (while there are still some left!)

Today it is five weeks and two days until J-Day, 1st April 2013. That is the day on which a whole raft of new rules reforming the civil litigation process will come into effect.  In particular they will change the way personal injury claims are dealt with especially in the way lawyers are paid for dealing with a claim for an injured person.

The new rules to implement these changes have been released and re-released and in recent weeks a new statutory instrument amending the Civil Procedure Rules has been enacted (the Civil Procedure (Amendment) Rules 2013).  These amendments will apparently be subject to amendment themselves fairly shortly.  In addition two protocols, one dealing with road traffic accident claims and one dealing with employment liability and public liability claims, have been published although these are themselves only in draft form and have yet to be finalized.

With less than six weeks to go before implementation the fluid nature of such changes is frankly appalling if not to say apocalyptic.

The overriding objective at CPR 1, so beloved of lawyers who like to quote it as an axiomatic truth despite its inability generally to help push an argument one way or another, is itself being amended.  From now on it is not enough that cases are decided “justly” which, in a justice system, would appear to be logical if not to say somewhat unnecessary.  Instead not only must cases be decided justly but they must also be decided “at proportionate cost”. Immediately justice then has to have a price and becomes a product like any other.

One of the striking points about the amendments to the CPR is the new rule at CPR 3.1(7) which states that the Court may write to the parties from time to time to monitor their compliance with directions and the parties must respond promptly to such enquiries. This is completely laughable in my view in an age when Court resources are being seriously curtailed with shorter opening hours and less staff.  This might happen in large commercial claims and strengthens the view that the whole civil system is being geared towards big, lengthy commercial cases at the expense of justice for the poor, unfortunate claimant who happens to be merely a normal citizen.

Much has been said about costs management and budgets and after some fraught worries about having to file a budget within seven days of a defence, the rules have been relaxed slightly so that these have to be filed at least seven days prior to a case management conference. The sanction, as before, is that if this is not done costs will be limited to purely the applicable court fees. A frightening thought.

As of the 1st April 2013 there will be four effective regimes for the recovery of costs from the opposing party (or rather more neatly in Oldspeak, inter partes costs).  The first is dear old hourly chargeable costs.  The second is the predictive regime under CPR 45 for road traffic accident cases, the third the regime for portal cases prior to 1st April 2013 and finally portal cases after 1st April 2013 (including the fixed recoverable costs).  Never mind having to think about liability and quantum!

The system for qualified one way costs shifting has been altered and a study of the wording leaves one with the disquieting feeling it doesn’t provide quite the comprehensive protection it should. Of important note is the change to the exception for claimants who are, on the balance of probabilities it must be remembered, fundamentally dishonest rather than fraudulent.  The concept of fraud in tort law is rather well examined and the change of wording does suggest an attempt to side step all the relevant issues in case law.  The qualifications are more qualified.

The new protocols look ahead to a time when the online portal has been made to work to include EL, PL and RTA claims under £25,000.  It is important to be clear about the deadlines under the new RTA protocol and the importance of the date of 1st April 2013.  RTA cases more than £10,000 but less than £25,000 where the accident occurs between 30th April 2010 and 1st April 2013 will not be dealt with through the portal and neither will the CPR 45 predictive costs regime apply.

If an RTA with a claim less than £10,000 in value takes place before 1st April 2013 and it is entered onto the portal prior to 1st April 2013 then clearly the existing portal regime will apply.  Where an RTA is entered onto the portal on or after 1st April 2013 than the new portal protocol (and the lower costs regime) will apply even if the accident took place prior to 1st April 2013 and as indicated above this applies to RTAs less than £10,000 in value.  As indicated in this excellent article by David Bott in which he calls this the "Portal Portcullis", the injustice of this arbitrary cut off date is clear.

A lot of speculation has arisen with how, exactly, EL and PL claims can efficiently be pursued through an online portal in the absence of a MIDIS style database linking potential Defendants to insurers.

There is of course the Employers Liability Tracing Office (ELTO) in place that provides a similar function and we can expect their use to literally explode after 1st April 2013.  Indeed the protocol states that if the Defendant’s insurers are not known, the Claimant must make a reasonable attempt to identify the insurer and in an EL claim MUST have carried out a database search through ELTO.

If it is impossible to initially launch the claim through the portal in these circumstances than a paper CNF may be sent to the Defendant.  So it seems likely that for a long, long time claimant lawyers will be sending CNFs to potential Defendants who no doubt will be largely receiving them with a certain amount of incomprehension.  Will this lead to greater efficiency?  The use of this paper portal (as it were) is also likely for some time as the construction of the online portal for EL and PL claims and the higher value RTA claims between £10,000 and £25,000 has not been concluded and so has been delayed to a date that the Ministry of Justice has yet to set.

With EL claims, the Defendant or insurer has thirty days to respond.  In a PL claims the time period is forty days.

Lawyers, who after all are in business, are keenly interested in how the new costs regime will work and what precisely will the amounts be. For new RTA, EL and PL claims under £25,000, gone (and long gone in some cases) are the days of charging proper hourly rates for claims.  The Ministry of Justice has provided details of new, much reduced fees for cases concluded in the online portal and new fixed recoverable costs (FRC) for fast track cases of this sort that come out of the portal.

Estimates of how much lower these new fees will be compared to the rates lawyers recover are varied, from 30% to 35% some say to 60% from other authorities.  It is clear the new regime will have drastic implications and it is going to be much more serious than simply not recovering success fees as was originally imagined in long ago, innocent days of thinking the Jackson reforms as a blot on the horizon.

Bravely, two lawyerly organizations, MASS and APIL, are taking on the government and demanding that the way they calculated all this be reconsidered.  The Ministry of Justice, in an arrogant and authoritarian manner, has declined the Law Society’s request for more information on how it calculated the setting of these new fees.  No public interest can be strengthened by restricting this information. No nuclear secrets, no precious foreign or terrorist intelligence is as stake. Yet the Ministry of Justice, with the insurance industry it's complicit ally, seeks to prevent anyone knowing its thinking.

The judicial review commenced by MASS and APIL is due to take place shortly and then, so it is believed, we will have the final figures for the new portal fees and the FRC.

With J-Day coming at us full speed, lawyers must gear up for the changes despite the omnishambolic way they have been presented by the government. We may now thank Lord Woolf for the Zen like mastery of the implementation of his reforms back in that happy time of the late nineties.  These changes are not seeing such an easy or well thought out birth.  Nevertheless, people will still sadly be hurt and need our help after 1st April and we need to be ready to help them.  

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