Costs News

17 October 2019
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No agreement on fixed costs for low-value clinical negligence cases

The Civil Justice Council (CJC) working group that has spent more than 18 months trying to agree fixed recoverable costs (FRCs) for clinical negligence claims worth up to £25,000 has been unable to do so, it admitted this week.

The group has proposed changes to the pre-issue handling of claims, however, including introducing mandatory neutral evaluation (MNE) to promote settlements.

It was commissioned jointly in February 2018 by the Ministry of Justice and the Department of Health and Social Care, and published its report this week.

Its chair, Andrew Parker, a CJC member and head of strategic litigation at defendant firm DAC Beachcroft, said: “The majority of the working group has been able to agree on some things, but not to conclude an agreement on the level of fixed recoverable costs.

“In the end, the difference between the positions of the claimant and defendant groups on the level of costs is not a large one, reflecting the efforts on both sides to come up with realistic proposals and to do their best to narrow the gap.

“It is to be hoped that this report will form a meaningful basis for further consultation by the government.”

The proposals focus on pre-issue with a standard track and a light track, the latter for claims that incur lower legal costs because liability is not in dispute.

The standard track would begin pre-issue with a letter of claim accompanied by an offer to settle. The defendant would have to send a letter of response outlining their case and responding to the offer within six months, to which the claimant would have a right to reply.

There would be sequential exchange of experts’ reports, but some claimant representatives did not agree with this, saying that having to submit expert evidence before seeing that of the defendant’s expert would put them at a significant disadvantage.

The report said: “We believe that this is addressed by the defendant only being able to defend the claim if they follow the same cards on the table discipline and within a strictly defined period.”

There would then be a mandatory ‘stocktake’ and discussion if the case could not be settled after the reply, with MNE – carried out by a barrister from an approved list – if the case has not settled after the stocktake.

The parties would not have to accept the outcome of MNE, but there may be part 36-like costs consequences for a party that presses ahead to trial and fails to better the MNE.

“An evaluation by a specialist barrister would have the advantage of providing an early and cost-effective assessment of the issues in dispute, but without necessarily determining the dispute should either party reject the assessment and decide to proceed to trial.”

On the light track, the letter of notification would contain more information on alleged liability and quantum. The defendant would have eight weeks to confirm that the claim would be settled on a full liability basis, without the need for expert evidence on breach and causation, or it would revert to the standard track.

If MNE worked as intended, it would “remove the need for changes to post-issue process”.

A fixed fee would be paid to the evaluator for an MNE, although the level was not agreed. The Bar, supported by the claimant representatives on the working group, recommended £2,000 for liability and quantum evaluations, with defendant representatives saying it should be £1,750.

The report published the FRC put forward by the claimant and defendant groups on the working party (below).

It also said some claimant lawyers on the working group suggested that FRC at the level proposed, especially those put forward by the defendants, would drive lawyers out of the market.

“This is pure speculation and is difficult to follow: the level of costs proposed by the defendant group will generate at least £7,000 costs on average and the claimant group’s figures are higher. We feel justified in saying that, with costs at this level, specialist firms are likely to stay in the market they already occupy.”

Mr Parker emphasised that the streamlining of the claims process was proportionate when the sums at stake were modest, “but should in no way be taken as a feasible option for larger-value claims”.

Standard Track

Stage Description Claimant Defendant
1 All steps up to and including stocktake £6,000 plus 40% of damages agreed £5,500 plus 20% of damages agreed
2 From stocktake up to and including neutral evaluation £2,000 in addition to stage 1 £500 in addition to stage 1

Light Track

Stage Description Claimant Defendant
1 All steps up to 21 days after letter of response is due £2,500 plus 25% of damages agreed £1,000 plus 10% of damages agreed
2a From 21 days after letter of response up to and including stocktake £1,500 plus further 5% of damages agreed, in addition to stage 1 £500 in addition to stage 1
2b From stocktake up to and including neutral evaluation £500 in addition to stages 1 and 2a £500 in addition to stages 1 and 2a

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