Divorce – An Overview

By Adam D.A. Manning LLB, LLM      

Please note the following is only for general advice. If you need further help, please see a Solicitor.

The application form to start a divorce is available from the government's website and this has to be completed and filed with the Family Court. You will need to have your spouse's full name and address and a copy of the marriage certificate as well, along with the issue fee, which at the time of writing was £550. You may be able to get help to pay the fee if you are on benefits or low income.

In England and Wales, to apply for a divorce you will need to prove that the marriage has broken down. To do this, you need to show one of five different reasons. The first is that your spouse has committed adultery, which is defined as sexual intercourse between a man and a woman. The second is unreasonable behavior, that is your spouse has behaved in a way that you cannot reasonably be expected to live with them. This might involve physical, sexual or verbal abuse, drunkenness or lack of financial or emotional support and often involves several aspects of the spouse's behavior.

Thirdly, there is desertion, which is where your spouse, without good reason, has left you for more than two years out of the last two and a half, so as to end the relationship.  Fourthly, living apart for more than two years is a reason to show the marriage has broken down, but your spouse has to agree in writing. The final basis is where you have lived apart from your spouse for more than five years, even if your spouse disagrees to the divorce.

Your spouse then has to acknowledge receipt of the form and send this back to the Court.  Once this has happened, the next stage is called Decree Nisi, which entails the person who started the divorce completing a further application to support the original applications.  Once Decree Nisi is issued by the Court, normally there is a six week waiting period before it is possible to apply for Decree Absolute, the final stage of the divorce. Once Decree Absolute is issued by the Court, the marriage is at an end.

Many people issue divorce proceedings themselves, without using a Solicitor, but those that do will have to pay their Solicitor's fees in addition to the issue fee. The amount of the fees really depends on the amount of work that is involved.

Other factors that can be involved include sorting out arrangements concerning children.  It can be helpful to take advice from a Solicitor about this and there is an emphasis on parents and caregivers trying to resolve these issues without using the Courts if at all possible, through mediation if needed.

Similarly, it may be helpful to take legal advice on the financial issues that need resolving during a divorce.  Perhaps unsurprisingly, the general principle here is one of equality and again there is much more emphasis on spouses resolving their issues, using mediation for instance, without the need to involve the Courts.

Artificial Intelligence and the Internet of Things – a Legal Scenario

By Adam D.A. Manning LLB, LLM

Artificial Intelligence (AI) already plays a surprisingly large role in our society and economy, from the way mobile phones route calls to financial software predicting or playing the stock market, and will become even more prevalent in the future.  A term used to refer to computer systems that mimic aspects of human intelligence such as taking decision or even learning, AI is here to stay.

Another related, revolutionary advance is the Internet of Things (IoT). Put simply, IoT is interconnecting all sorts of devices, including everyday objects, over the Internet so that they can exchange data.  This can include medical equipment such as pacemakers, beds in hospitals able to detect if someone is lying in them and even smart watches worn to track exercise. It can include devices monitoring infrastructure such as roads, bridges and railway tracks. It is of potentially enormous application and there are estimates of 20 to 30 billion IoT enabled devices by 2020.  One consequence is a huge increase in the amount of data available for access.

In considering the practical implications of these developments, one illustrative scenario could be that unfortunately regular occurrence, the road traffic accident.  Cars are a perfect example of “devices” that could be on the IoT and if so, this might entail a car transmitting constant data about its position, speed, orientation and even whether it has a fault or is damaged and in need of repair.

Imagine also that the roads themselves have sensors embedded in them that can detect similar information about the vehicles travelling on them, such as their position and heading. This might be linked to a CCTV system through fixed position cameras or even drones. Data from the transport infrastructure system might also include information about the conditions of the road, such as whether it is dry or not, and the general prevailing conditions (time of day, bright sunshine, visibility, fog, cloud, wind and so forth).

For the time being, ignore the issue of driverless cars to keep things simpler. Now, on this road of the future, imagine that there has been a nasty accident involving several motor vehicles, in which sadly some of the occupants have been injured.

The data from vehicles and the road network could be transferred to the police force’s computer to determine whether the emergency services were needed to attend at the scene and, if so, in what number. As this is a serious incident, a substantial contingent might be appropriate. As a result, the emergency services might be alerted sooner than any of the humans at the scene or observing might have been able to contact them. 

Once the emergency personnel arrive, their data would be added to the set of information already available from the vehicle and road sensors, including an assessment of the injuries suffered by victims at the scene and more details about the damage to the vehicles, including photo and video imagery. Witness evidence from people at the scene (or later taken at the police station or a victim’s home) would add further data.

The AI system used by the police would then analyse all of this data and consider issues concerning criminal liability. This might involve, in part, the use of an expert system, which takes data and applies decision making processes to it. Expert systems are an established field of AI with a long history and do not represent a radical new advance, apart from perhaps the huge amount of data that a true IoT would provide. 

Whether anyone involved was driving over the speed limit might be a relatively straightforward issue for the system to analyse. The software might also analyse whether any of the drivers were driving in such a way that might be considered dangerous or caused the incident. This analysis might evolve over time as the software begins to recognise features of a situation that to a police officer suggest dangerous driving; true machine learning might be required.

The data set could then be further analysed by the police force’s AI to determine if any of the drivers had breached the criminal law and warranted prosecution as a result. This would involve analysing the witness evidence for weaknesses such as contradictions with the objective data obtained from the vehicles and road sensors. Part of this system would entail natural language comprehension on the part of the AI; that is the system would have to “understand” the text of the witness evidence.

If the police force’s AI determined that the case might warrant prosecution, a recommendation could be made for the case to be forwarded to the Crown Prosecution Service (CPS) for a CPS lawyer to review, possibly with the assistance of the CPS’ AI system. The CPS’s AI could analyse the data relevant to this incident and compare it to its library of similar incidents, reviewing their outcomes and predicting what could happen concerning this particular incident. The conclusion of this analysis would be a recommendation regarding prosecution and the possible offence involved.

With regard to the civil law aspects of the situation, the data would be transferred to the AI system for the insurers for those involved in the incident. The insurer’s AI would analyse all of this data to determine if any of the parties involved had a personal injury or motor vehicle damage claim against any of the others.

This would, as the case progressed, include data from the hospitals, GPs and other medical practitioners involved concerning the nature and extent of the injuries suffered.  At an appropriate point in time, when prognoses were as clear as they could be, the insurers’ AI systems could recommend offers to make to settle the claims and even negotiate settlements based on precedents for the amount of compensation involved.

Data from garages, employers, physiotherapists and others could be included in the claim to ensure full compensation was recovered, including loss of earnings. Insurance companies already use software such as Colossus to value claims; this just takes the process to its ultimate conclusion.

Of course, in reality this system might have regular human supervision to ensure it wasn’t making aberrant decisions, but in principle this could operate quite independently of human intervention. Lawyers, that is human lawyers, might only be involved in very difficult cases where the data, even in this amount, was unclear as to whether there was any issue of liability.

The widespread use of driverless vehicles in the future implies that a lot of the data about the vehicle’s position, speed and heading will be available in any event as it will be needed by the driverless navigation system.  In the event of an incident, the issue of who, if anyone, is prosecuted or liable in a civil sense becomes rather more abstract and it may be that the appropriate tort is one of product liability rather than negligence.

This thought experiment illustrates an example of how an even more data driven digital society might function. It relies on an Internet of Things generating the huge amount of data necessary, the internet as a medium for the exchange of this data and AI systems within our institutions and companies processing it and taking sometimes very serious decisions as a result. 

The Law Society's President at St Mary's Stadium

Hampshire Incorporated Law Society (HILS) held its Annual General Meeting last night at the hallowed grounds of Southampton Football Club at St Mary's Stadium and I was delighted to be invited to attend.  As someone who is Southampton born and raised and a Saints fan, albeit in  completely armchair and ignorant fashion, it was a thrill to be there.

One of the guests at the meeting was Andrew Caplen and I remembered Andrew from a previous AGM for the Hampshire local law society I had attended in 2000 when he had been elected as their President.  Time of course has moved on and earlier this year, Andrew was elected as President of the national law society.  At HILS, we are naturally very proud that a Hampshire solicitor is the head of the Law Society and so it was a rather special meeting as a result.

Inside St Mary's stadium

It was fascinating to hear the very varied range of events and activities Andrew has been involved with already during his term as President. He explained that one of the first points he had dealt with was the controversy concerning the loan company Wonga. It had been reported that Wonga had been writing to some customers using the guise of entirely bogus legal firms and the Law Society had stepped in and requested that the Metropolitan Police investigate this activity.  Almost before he had a chance to sit down in his new role, Andrew appeared on Newsnight being interviewed by none other than Jeremy Paxman on the debacle. Fortunately, Paxman was rather on Andrew's side in the discussion.

Andrew recalled he had been questioned about the European Arrest Warrant particularly when it became clear that Judges, as is often the case, were not very keen to be interviewed personally about such pressing matters.  He had also been involved in discussions about sovereign debt restructuring which, he commented, was thankfully less intimidating than it might sound.

One of Andrew's themes in his discussion was looking forward to 2015 and the celebrations of the 800th anniversary of the sealing of Magna Carta.  In particular he will be a guest at the Global Law Summit and Andrew explained that one of the main points of discussion will be the importance of the rule of law.  Of course with all the current international instability it is perhaps unsurprising that this is the case.  Andrew's particular interest in the concept was how it related to access to justice, that is to say the rule of law could only be effective if citizens actually have access to justice and can exercise legal rights in a court of law.

The role of President of the Law Society clearly involved a lot of travel, both within the UK and abroad.  Rather movingly, Andrew told us how he had attended at an event in Japan and had been amazed to find himself one of a small group of people selected to meet the Emperor and Empress of Japan.  As well as making contact at this level he had also sought out a visit to a unit dedicated to tackling domestic violence in Japan to learn more about how different countries deal with this.

Throughout the evening, Andrew noted that the one person he couldn't seem to meet was the Lord Chancellor, Chris Grayling.  He had met him prior to becoming President and told an amusing story about correcting a speech that was connected to this yet he had not, despite trying, been able to see him after becoming elected as President.

Again and again Andrew returned to the problems facing legal aid and criminal law practitioners.  Despite extraordinary efforts, despite numerous presentations and proposals it seems the government are simply not listening.  Even more depressingly, Andrew suggested it seems that even if there were a change of government at the next election, it was unlikely that this would change greatly.

It had been an enjoyable evening, assisted with a delicious meal at St Mary's, and some very thought provoking talks were given.  Andrew Caplen is clearly enjoying being President, and quite rightly so, but this flows from his natural energy and passion for what he is achieving in the role. We at HILS continue to be very proud of our Hampshire President.

St. Mary's at night

An Overriding Amendment

Notes from a seminar with Professor Dominc Regan

Your hard working correspondent attended a dynamic presentation by Professor Dominic Regan in the grand setting of the Grange City Hotel in London earlier today and came away with a vivid insight into the up to the minute state of the Jackson reforms. 

For those living in Plato’s cave for the last demi-decade, the Jackson reforms have been a maelstrom of change for civil litigation lawyers, especially in the personal injury arena.   Thankfully with guiding lights such as the wise Professor, those of us hammering away at the coal face of justice have someone showing the way in all this turbulence.

Hard working lawyer left, glamorous Professor right

I won’t go into the detail of the Professor’s news and views; if you want that, go to one of his energising lectures. Instead some of his broader themes are worth mentioning.  One of the most profound reforms was the modification of the overriding objective of Rule 1 of the Civil Procedure Rules.  Like constitutional lawyers, we have long enjoyed righteously reminding Courts that cases must be decided justly, as if justice might proceed in any other way.  As a trainee solicitor long ago in the summer of 1999 I proudly heard myself make this very point to a patient District Judge who kindly and gently assured me that Courts had always striven to make decisions justly long before the implementation of the Civil Procedure Rules. 

But the reforms implemented on 1^st April 2013 have now added a slightly sinister sounding refinement to this golden axiom.  From then on, cases must not only be decided justly but also “at proportionate cost” and these words have influenced judicial decision making even rather more markedly than expected since their enactment.  This has been working in tandem with the new stricter approach to relief from sanction under CPR 3.9. Providing stark reminders of just what can go wrong, Professor Regan highlighted how serious the adherence to deadlines is now. Parties cannot seek to buy their way out of trouble by offering to pay adverse costs as they once might have done. This may be a shock to some firms and the way they operate their case loads.

As a consequence there is a focus on a newer concept of proportionality as the measure of costs. Yet this new measure has yet to be given any specifics of scale or measurement and it is feared much case law will have to be developed to arrive at the right meter.  The simple logic that if costs were reasonable and necessarily incurred they were therefore proportionate is the language of an earlier age. (Footnote: fear not too much, Home Office v Lownds still, according to Dominic, applies if a case is issued prior to 1^st April 2013 throughout the life of the case).

Other startling pointers were the suggestion of fixed costs on the multi-track. As well as a flight to clinical negligence work, catastrophic claims are also considered something of a refuge for claimant lawyers as they are currently free of the shackles of fixed costs. It will be interesting to see how multi-track fixed costs would compare to current costs levels, just as it is illuminating to compare the new fixed recoverable costs on the fast track to those costs claimant lawyers have been seeking to recover.  The use of costs budgets for the big commercial cases, even the heady heights of two million pound and up which currently avoid them, was mooted as well.

There is as yet no more news on the consultation on the discount rate from the Ministry of Justice and any possible changes to this important point are still awaited.

There is much more that could be said. Professor Regan is a natural orator and, in the eyes of this fan, a Cicero of our world of civil litigation. See and hear him and learn much.  He has a blog at http://profdominicregan.blogspot.co.uk/ which should be subscribed to. Not only are their legal insights but also much wisdom on wine and champagne.

The new lower RTA portal costs

This article is a discussion of developments in the law as it relates to personal injury claims and in particular how lawyers are paid for dealing with them. Nothing on this blog should be taken as legal advice for anyone pursuing a claim and if you need legal advice you should contact a solicitor. This article concerns costs for typical RTA cases that make up a significant proportion of all the personal injury claims that are pursued.

On 30th April 2013, the new lower costs came into existence for road traffic accidents with a value under £10,000 that are pursued through the RTA portal.  At Stage 1 the fees are now £200 plus VAT and at Stage 2 they are £300 plus VAT for a total of £500 plus VAT. That's right, £500 plus VAT for dealing with a case that could be anywhere up to £10,000 in value.

This change applies to all cases entered onto the RTA portal on or after 30th April 2013 regardless of the date of the actual accident. The potentially retrospective nature of this alteration is of course unfair and has been dubbed the "portal portcullis" by well known personal injury lawyer David Bott as a result.

Prior to this change, the fixed fee for this category was in total £1,200. The lower fee is a reduction of approximately 58% of the amount lawyers charge the defendant (or rather their insurance company) for dealing with a case of this type.  A huge drop.  How would doctors, teachers or accountants respond if the government decreed that the income from a sizeable proportion of their work was going to be cut down in this way?

A lot of these claims are pursued under a Conditional Fee Agreement and so a success fee may also apply. If the CFA was entered into prior to 1st April 2013 a success fee could be claimed from the Defendant.  In an RTA claim that was settled prior to trial, the normal percentage applied was 12.5%. So, on a fee of £1,200 plus VAT the additional amount was £150 plus VAT for a grand total of £1,350 plus VAT.

From 1st April 2013 success fees are no longer claimable from the Defendant.  Instead many lawyers are getting used to the previous practise of charging clients a success fee in accordance with the earlier, original incarnation of the Conditional Fee Agreement.

If the previous model of a 12.5% success fee is used and this is simply based on recoverable costs, under the new lower costs this amounts to £62.50 plus VAT. In total then the new costs here would be £500 plus £62.50 or £562.50 plus of course VAT on top.  This would still be a reduction of 58%.

Some lawyers are taking the approach of charging a 100% success fee (the maximum the rules allow) and basing this not on the fixed recoverable costs in the portal but on the solicitor-client costs calculated in accordance with an hourly chargeable rate.

Personal injury lawyers may need reminding of course that recoverable costs (or as I still like to say inter-partes costs) are not the same as solicitor-client costs, something that to most other civil litigators will be entirely obvious.  The days of guaranteeing the client 100% recoverability have perhaps obscured this for accident lawyers.  Indeed one of the rites of passage when initially advising clients on a piece of civil litigation is to point out that it is likely the total bill for the work done is unlikely to be recoverable and that there will be a shortfall.

The maximum deduction that can be made from compensation under the rules for the success fee is 25% of damages (not including future losses and any deductions for CRU purposes).  A typical RTA case through the portal might be worth £2,000 in damages but let's be optimistic and consider a case worth £3,000. After all, cases where a success fee or ATEI is not recoverable from the Defendant are entitled to a 10% uplift on general damages.

Where damages are £3,000 and assuming there is no element that is future losses or CRU, the maximum success fee chargeable to the client is £750.  This will include VAT and so the profit costs element is £625 plus VAT. Using this example the costs recovered by the lawyer is £500 plus £625 being in total £1,125 plus of course VAT on top.  This assumes of course that the solicitor-client costs incurred in pursuing the claim is at least £625.

This amount of £1,125 is still a 17% reduction of the previous fees on a CFA and requires the client to accept a 25% deduction to their compensation.

Of course, claims will still exit the portal and some will go onto be issued and potentially even go to trial.  Until 31st July 2013 when the new fixed recoverable costs system comes into effect, such cases will be dealt with under the predictive costs regime and, if issued, normally a chargeable hourly basis.  But these figures give an idea of the implications of the new lower portal costs.

In light of the recent government consultation on increasing the small claims personal injury limit to £5,000 its interesting to speculate that the change to the fees and the possible charging of the success fee to clients is part of a broader strategy to move the whole system away from recoverable costs completely.  The ultimate destination would be a contingency fee system where the only fees lawyers recover would be by way of deductions from client's compensation.  Please see my previous article entitled The new portal fees - the warm up to increasing the small claims limit?

Yet the government's announcement about the reduction in fees does not help support this theory.  It says quite specifically that the lower lawyer fees will make no difference to the amount of compensation for genuine claimants.  The whole tenor of this press release bespeaks the government's attitude to personal injury lawyers as a profession.  Helen Grant MP's view is that any decision about an increase in the small claims personal injury limit will not be made until the autumn - a long time to wait for a decision that may have huge implications for lawyers and their clients.

The Road to no more Recoverable Costs

Please note the purpose of this article is to explore and discuss the changes in personal injury law that have been suggested in recent times. This is not legal advice and must not be taken as such by anyone. If you require legal advice please contact a solicitor.  It is an exploration of a particular point that may be of the greatest importance to personal injury lawyers and the way they operate.  Personal injury lawyers are by and large passionate about working in the interests of justice  and the pursuit of their client's cases.  This article seeks to examine how some changes may directly impact on the way claimant lawyer's are paid for doing their work. I welcome wholeheartedly any comments or corrections as part of this ongoing discussion and exploration.

The speculation about a possible increase in the small claims limit for personal injury has not ceased.  The government’s consultation on the subject has closed and we await the Ministry Of Justice’s announcement which is expected in May or June.  Of course, the small claims limit for financial claims has already increased rather drastically from £5,000 to £10,000 on 1st April 2013.  To most private individuals and most businesses, a sum of between £5,000 to £10,000 is far from small and with a sizeable proportion of the population being one month’s pay away from homelessness the importance of such a claim is clear.

This applies to many personal injury claims of around this size as well.  An injury claim valued at around £5,000 will typically involve a serious and potentially long lasting injury with a prolonged period of pain and discomfort.  Claims with injuries valued at between £1,000 and £5,000 can involve serious consequences for victims of accidents including loss of earnings.

The government’s consultation on increasing the small claims personal injury limit looked at three scenarios all involving an increase from £1,000 to £5,000. The most general was an increase for all personal injury claims, the second was an increase just for road traffic accidents and the final one was restricted to just road traffic accidents involving whiplash claims.

The majority of personal injury claims are valued at below £5,000 and in addition a sizeable proportion of personal injury claims arise from road traffic accidents.  The consequences of these sorts of changes for personal injury lawyers is of course that if a claim lies in the small claims track of the County Court, normal legal costs (beyond certain types of disbursements) are not recoverable from the opponent (see Civil Procedure Rule 27).  As a result increasing the small claims personal injury limit to say £5,000 would be very serious for lawyers dealing with these sorts of cases.

The Lord Chancellor and Secretary of State for Justice, Mr Christopher Grayling, has also been reported as suggesting this limit could be increased to as much as £15,000.  Such an increase would include a very large proportion of injury claims.  For the purposes of the great majority of cases there would be no more recoverable costs.

Let us assume that the small claims personal injury limit is to be increased to say £5,000 and that this change will come into effect on 1^st October 2013.  The most likely way this will be achieved is to say that all cases issued on or after that date where general damages are less than or equal to £5,000 are to be, with all the usual exceptions, allocated to the small claims track. This will be effectively retrospective as you may have been dealing with a claim for a while before 1^st October 2013 in the belief that it was a fast track claim and therefore recoverable costs would apply but the change will  mean that, unless you settle prior to the 1^st October 2013, this will not be the case.  Rather unfair to claimants and their lawyers admittedly but this is the way similar changes have been enacted previously.

In this situation, if you deal with a claim where general damages are less than £5,000 you will not recover costs from the Defendant and must therefore look to the client to pay your fees (unless you are prepared to act for free).  In this scenario the currently much maligned Damage Based Agreements may come into play. 

As matters stand, the maximum percentage you will be able to deduct will be 25% of client’s damages, to include VAT and disbursements.  So let us say your case is worth £3,500 for general damages plus £500 for special damages. Total is £4,000 so the amount you can deduct under the DBA is 25%, that being £1,000 leaving your client with £3,000.  Fortunately you will be entitled to recover the medical report fees from the Defendant  and rather neatly the allowable recoverable fee for a medical report was recently increased under CPR 27 from £200 to £750. This is an amount that equates to a respectable total for a single medical report (perhaps even from an orthopaedic expert rather than GP).

Under the Ontario model any amounts you recover from the Defendant (including for disbursements) has to be repaid to the client. So let us say your medical report was £500 which are you are entitled to recover from the Defendant.  So in addition to £3,000 you have to give credit for the £500 to the client so in the end the client has £3,500.

You end up with the balance of £500 deducted from damages plus the £500 you recovered from the Defendant leaving you with £1,000.  You still have to pay for the medical report so after deducting the fee of £500 you are left with £500 for costs.  If VAT is 20% this means profit costs are £416.67.  For a case valued in total at £4,000. 

At this point it appears that the lawyer had been entitled to deal with the case under a proper contingency fee agreement with the client of say 25% of damages. If this had occurred, the lawyer could have recovered £1,000 for costs (inclusive of VAT) which would give the lawyer £833.33 of profit costs.  The lawyer would have recovered the £500 medical report fee from the Defendant.  As a result, a proper contingency fee agreement works better for the lawyer whilst a DBA works better for the client.

Now if liability is denied or you cannot agree quantum with the Defendant, you may seek to proceed to trial.  You issue your claim, have questionnaires and a pre-trial checklist and set down for trial. All these stages entail additional disbursements of (assuming they are not changed by the rules) of £120, £40 and £325 respectively (being £490 in total).

If you are successful you will be entitled to recover these from the Defendant. Again you have under a Damage Based Agreement to give credit to the client. If the medical report fee is still £500 this means the client walks away with £3,990 and so has almost recovered all her damages.  The lawyer ends up with the sum of £10 deducted from damages plus £990 recovered from the Defendant leaving him with the sum of £1,000. 

Remember though that the lawyer still has to account for the disbursements and so the lawyer has only £10 for costs in this scenario including VAT, leaving £8.33 for profit costs.  Effectively by taking the matter to trial all the profit costs have been swallowed up in crediting the client with disbursements recovered from the Defendant due to the Ontario model.

If legal proceedings are issued at the Court, it is not possible for a lawyer to deal with a matter under a contingency fee agreement as these are not allowed in contentious matters. Part of the definition of contentious matters is that this includes cases where proceedings have been issued at the County Court.

As a result you would have to enter into a Damage Based Agreement if you needed to issue the claim.  Doing so would be likely to seriously reduce the already low fees a lawyer ends up with for a claim of this size as we have seen.

Let’s say the small claims personal injury limit is in fact increased to £15,000.  What then? Imagine a scenario where damages are agreed at £13,000 and the DBA is 25%.  Let’s say again, perhaps less probably in this scenario, that the only disbursement is a medical report of £500 which is recoverable from the Defendant in addition to damages.  Remember that the amount you can charge the 25% does not include future special damages and is net of any deduction for CRU. We will avoid any complications for appeals.

If you settle without issuing the amount to be deducted is 25% of £13,000 or £3,250.  This leaves the client with the balance of £9,750.  You recover the sum of £500 for the medical report which has to be credited to the client.  In total the client recovers the sum of £10,250.

The lawyer’s part is £3,250 as stated.  The amount of £500 for the lawyer’s fees is therefore £2,750 after the credit to the client is accounted for and after VAT this leaves profit costs of £2,291.67. If it had been dealt with under a straight contingency fee, the client would have £500 less and the lawyer’s fees (net of VAT) would increase by £416.67.

If the claim for £13,000 had to be issued and taken to trial, the disbursements would (assuming no change in the fees) total £1,100.  Under the DBA (remembering that a straight contingency fee is not possible as it is now contentious work) these have to be credited to the client once recovered from the Defendant.  So, here the client has £9,750 plus £1,100 being in total £10,850.  The lawyer has £3,250 less £1,100 being a balance of £2,150.  After deducting VAT this leaves the lawyer with £1,791.67 for profit costs. Simply by taking a matter to trial the lawyer’s fees have been reduced despite all the increased work entailed.  In reality a claim for £13,000 might well entail more than one medical report and possibly other disbursements especially if Counsel is used for the trial and so the amount available for costs reduces further.

Increasing the small claims limit to £5,000 would in conclusion mean a lot of the work that personal injury lawyers have been doing would be simply uneconomic and this becomes only more prevalent if it is increased to say £15,000.

There is currently no definite word from the Ministry Of Justice on the date for implementation of a this increase, whether it will actually happen or if so in what way.  Quite clearly as this article shows, it would be a change of the greatest importance to the personal injury profession.