RTA Post Jackson How to deal with them 3 months on what have we learned?
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- Bathsheba Shepherd
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1 Administration: Equity House Blackbrook Park Avenue Taunton Somerset TA1 2PX DX: Taunton Blackbrook T: F: RTA Post Jackson How to deal with them 3 months on what have we learned? Andrew Mckie, Barrister Clerksroom July Referral Fees They are now Banned! (LASPO),Sections 56, 57 and 59 of the Act are in relation to the prohibition of the payment and receipt of referral fees in personal injury cases commenced on 1 April A significant number of businesses involved in the personal injury market have been acting in breach of the referral fee ban since it came in on 1 April, the chief executive of the Solicitors Regulation Authority (SRA) warned yesterday. Speaking at the Legal Futures Conference in London, sponsored by NatWest, Antony Townsend said the authority was concerned to ensure that the operation of the market should be balanced against the preservation of the professional principles including putting clients interests first. He acknowledged that quite a number of arrangements investigated by the SRA in the nine weeks since the ban came into force had been on the wrong side of the line. But he warned: We do have an enforcement strategy. The fact we haven t yet had any cases going to the Solicitors Disciplinary Tribunal doesn t mean that there won t be any. It would seem that a number of firms are continuing to act in breach of LASPO, it must only be time before the SRA makes an example of a firm in breach of the ban. To ensure you are compliant, it is advisable to ensure sure you have a LASPO checklist in place, a clear policy and guidance on what it and what is not LASPO complaint for staff and fee earners involved in the acceptance of cases. The SRA s own LASPO checklist can be found here: src=s&source=web&cd=1&ved=0cc0qfjaa&url=http%3a%2f%2fwww.sra.org.uk%2fdocume nts%2fsra%2fconsultations%2freferral-flowchart.pdf&ei=e6h2uy7nmsvxhqfwsihgca&usg= AFQjCNFFxjgk8HS-v4QJjq-ic1ZUO4vU6w&bvm=bv ,d.ZG4&cad=rja
2 2. The CPR Just Got a Whole Lot Tougher! Relief from sanctions (1) On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need (a) for litigation to be conducted efficiently and at proportionate cost; and (b) to enforce compliance with rules, practice directions and orders. (2) An application for relief must be supported by evidence. Lord Justice Jackson in Mannion v Ginty [2012] EWCA Civ 1667 at [18] referred to a culture of toleration of delay and non-compliance with court orders in the civil justice system. The Judiciary post April 2013, seem to be towing this line. Application under CPR 3.9, which would have almost certainly succeeded before, are now being refused. It is almost certain that application for relief from sanction will now be very difficult to obtain. To avoid the pitfalls ensure:- A) The case is ready for Trial before you issue! Ensure you have all special damages documents, a signed statement from all witnesses, the medical evidence is finalised and all liability documents, sketch plans, locus reports, engineering evidence etc. B) Have a robust system in place to avoid issuing shortly before limitation. C) Ensure the firm has a system of regular file reviews and supervision in place, to ensure cases are progressed. Checklists and case management systems work well. D) If the client goes AWOL, apply to come off the Court record in good time. E) If the client cannot meet a rule or practice direction, seek an extension of time and if not agreed, make an application to extend time, before the rules are breached. Applications must be supported by evidence and a good explanation. The fee earner being on holiday or the client forgot is not a good explanation. F) If the breach is the faulty of the firm, make the application quickly with a detailed statement in support explaining the reasons for the breach, and steps taken to rectify it. G) If the breach of the client s error, you must have a statement from your client, explain how the breach happened and what steps have been take to comply. H) On a CPR 3.9 application, anything less than this is likely to result in a failed application.
3 3. Proportionality, Proportionality, Proportionality! The overriding objective (1) These Rules are a new procedural code with the overriding objective of enabling the court to deal with cases justly and at proportionate cost. (2) Dealing with a case justly and at proportionate cost includes, so far as is practicable (a) ensuring that the parties are on an equal footing; (b) saving expense; (c) dealing with the case in ways which are proportionate Some matters to consider: A) The Court will apply the new test when considering to allocate to track, expert evidence, number of witnesses etc. B) If are seeking a forensic engineer and damages are limited to 5,000, consider whether it is proportionate. Could you put Part 35 questions instead? C) Some Courts are now reluctant to allow Defendant medical evidence in LVI case, even where D has complied with Casey. Again, consider asking the Defendant to put Part 35 questions first. I have seen such an application refused by the Court, where Casey was fully complied with. D) When considering proportionality, consider not only the value of the case, but the importance of the litigation to the parties. If fraud is alleged by the Defendant, then surely allocation to the M/T is justified, to allow expert evidence and cross examination of experts, given the likely consequences for C if fraud is alleged and potentially found.
4 4. Track All now to the Fast Track? Allocation (1) The court will allocate the claim to a track (a) when all parties have filed their directions questionnaires; or (b) when giving directions pursuant to rule 26.3(8), unless it has stayed the proceedings under rule ) If the court has stayed(gl) the proceedings under rule 26.4, it will allocate the claim to a track at the end of the period of the stay. (3) Before deciding the track to which to allocate proceedings or deciding whether to give directions for an allocation hearing to be fixed, the court may order a party to provide further information about his case. (4) The court may hold an allocation hearing if it thinks it is necessary. Matters relevant to allocation to a track (1) When deciding the track for a claim, the matters to which the court shall have regard include (a) the financial value, if any, of the claim; (b) the nature of the remedy sought; (c) the likely complexity of the facts, law or evidence; (d) the number of parties or likely parties; (e) the value of any counterclaim or other Part 20 claim and the complexity of any matters relating to it; (f) the amount of oral evidence which may be required; (g) the importance of the claim to persons who are not parties to the proceedings; (h) the views expressed by the parties; and (i) the circumstances of the parties. Matters to Consider;- There seems to be a move towards allocating claims to the fast track, rather than the multi-track, even where fraud is alleged or insinuated by the Defendant. Some Courts are saying the case is still fast track, and using this new magical word of proportionality;- How to Deal with it? A) Do not let the Court allocate on paper, as there may be a presumption for the matter to go to the fast track. B) Ask for an allocation hearing, if you need one, to get into the M/T for expert evidence, allegations of fraud. Some Courts are still not allocating to the M/T, even where both parties agree, C) Ant cases over 1 day, i.e more than 4-5 witnesses between the parties, if you need to call the experts, medical experts, or forensic engineer s the case should be in the M/T.
5 D) Make sure the letter asking the Court for an AQ hearing deals with all the matters in CPR Allocation should consider more than just the financial value of the claim. E) Remember, under the new fixed cost if the case is in the fast track, fixed costs will apply, but not for multi track claims. 5. Portal Costs Portal Costs The new fixed costs rules can now be found at CPR for Portal costs and are as follows (effective from 1 April 2013) -:- TABLE 6 Fixed costs in relation to the RTA Protocol Stage 1 Fixed Costs Stage 2 Fixed Costs Stage 3 Type A Fixed Costs Type B Fixed Costs Type C Fixed Costs Portal Costs Claims that Exit the Portal after 31 July 2013 A summary of the 31 July 2013 with all the new Portal documents can be found at :- a) Please note the amendments to Parts 36 and 45 apply only to claims started under the Pre- Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents where the Claim Notification Form (CNF) is sent in accordance with that Protocol on or after 31 July The Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents which was in force before 31 July 2013 shall continue to have effect in respect of any claim where the Claim Notification Form was sent before that date. A summary of the post July 31st July Portal costs can be found here (new CPR Part 45):
6 What does this mean for my practice? 1. It will be more important than ever to have the correct fee earner dealing with the correct case. 2. An efficient case management system is crucial. 3. Claimant law firms will want to exit as many claims from the portal as possible (please see my note on exit points) but beware, the Court will penalise parties in cost who exit the portal for costs purposes. Please see CPR 45.24; (1) This rule applies where the claimant (a) does not comply with the process set out in the RTA Protocol; or (b) elects not to continue with that process, and starts proceedings under Part 7. (2) Where a judgment is given in favour of the claimant but (a) the court determines that the defendant did not proceed with the process set out in the RTA Protocol because the claimant provided insufficient information on the Claim Notification Form; (b) the court considers that the claimant acted unreasonably (i) by discontinuing the process set out in the RTA Protocol and starting proceedings under Part 7; (ii) by valuing the claim at more than 10,000, so that the claimant did not need to comply with the RTA Protocol; or (iii) except for paragraph (2)(a), in any other way that caused the process in the RTA Protocol to be discontinued; or (c) the claimant did not comply with the RTA Protocol at all despite the claim falling within the scope of the RTA Protocol, the court may order the defendant to pay no more than the fixed costs in rule together with the disbursements allowed in accordance with rule
7 6. Part 45 and PD45 Fixed Costs The End of Standard Costs? New fixed cost apply to RTA claims entering the portal and then exiting the portal on or after 31 July 2013:- The Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents which was in force before 31 July 2013 shall continue to have effect in respect of any claim where the Claim Notification Form was sent before that date. A new Section IIIA, set out in the Schedule to this instrument, is also inserted into Part 45. New Section IIIA provides for a fixed costs regime in respect of those claims which exit the RTA and EL/PL Protocols and which are subsequently settled or proceed to judgment. Again the costs which might be recovered are prescribed in the rules, the amount depending upon the nature of the claim, the stage the proceedings have reached and the damages which might be agreed or awarded. The new costs matrixes can be found at :- Also to be added into CPR Part 45 as follows:- Application of fixed costs and disbursements RTA Protocol45.29B. Subject to rules 45.29F, 45.29G, 45.29H and 45.29J, if, in a claim started under the RTA Protocol, the Claim Notification Form is submitted on or after 31st July 2013, the only costs allowed are (a)the fixed costs in rule 45.29C; (b)disbursements in accordance with rule 45.29I. Amount of fixed costs RTA Protocol45.29C. (1) Subject to paragraph (2), the amount of fixed costs is set out in Table 6B. (2) Where the claimant (a) lives or works in an area set out in Practice Direction 45; and (b) instructs a legal representative who practises in that area, the fixed costs will include, in addition to the costs set out in Table 6B, an amount equal to 12.5% of the costs allowable under paragraph (1) and set out in Table 6B. (3) Where appropriate, VAT may be recovered in addition to the amount of fixed recoverable costs and any reference in this Section to fixed costs is a reference to those costs net of VAT. (4) In Table 6B (a) in Part B, on or after means the period beginning on the date on which the court respectively (i) issues the claim; (ii) allocates the claim under Part 26; or (iii) lists the claim for trial; and (b) unless stated otherwise, a reference to damages means agreed damages; and (c) a reference to trial is a reference to the final contested hearing
8 Disbursements 45.29I. (1) The court (a) may allow a claim for a disbursement of a type mentioned in paragraphs (2) or (3); but (b) will not allow a claim for any other type of disbursement. (2) In a claim started under either the RTA Protocol or the EL/PL Protocol, the disbursements referred to in paragraph (1) are (a)the cost of obtaining medical records and expert medical reports as provided for in the relevant Protocol; (b) the cost of any non-medical expert reports as provided for in the relevant Protocol; (c) the cost of any advice from a specialist solicitor or counsel as provided for in the relevant Protocol; (d) court fees; (e) any expert s fee for attending the trial where the court has given permission for the expert to attend; (f) expenses which a party or witness has reasonably incurred in travelling to and from a hearing or in staying away from home for the purposes of attending a hearing; (g) a sum not exceeding the amount specified in Practice Direction 45 for any loss of earnings or loss of leave by a party or witness due to attending a hearing or to staying away from home for the purpose of attending a hearing; and (h) any other disbursement reasonably incurred due to a particular feature of the dispute. (3) In a claim started under the RTA Protocol only, the disbursements referred to in paragraph (1) are also the cost of (a) an engineer s report; and (b) a search of the records of the (i) Driver Vehicle Licensing Authority; and (ii) Motor Insurance Database. What does this mean in practice? A) Given that QOCS will apply to most of these claims, and there will be no CFA uplifts, the incentive for Defendants to settle cases has gone (save for Part 36 see later section). B) Most Defendants will run cases to Trial, economic offers as settle will be few and far between. C) It will be more important than ever to assess prospects of success on liability, causation and quantum early with advice from Counsel and/ or a conference. D) It will no longer economical to run cases with less than 51% prospects to Trial. The Defendant is more likely to run 50/50 cases to Trial, as long as they stay in fixed costs.
9 7. Interim Application More Fixed Costs for Cases that Drop out after 31 July 2013? Interim applications H (1) Where the court makes an order for costs of an interim application to be paid by one party in a case to which this Section applies, the order shall be for a sum equivalent to one half of the applicable Type A and Type B costs in Table 6 or 6A. (2) Where the party in whose favour the order for costs is made (a) lives, works or carries on business in an area set out in Practice Direction 45; and (b) instructs a legal representative who practises in that area, the costs will include, in addition to the costs allowable under paragraph (1), an amount equal to 12.5% of those costs. (3) if an order for costs is made pursuant to this rule, the party in whose favour the order is made is entitled to disbursements in accordance with rule 45.29I; and (4) Where appropriate, VAT may be recovered in addition to the amount of any costs allowable under this rule. 8. Counterclaims Yet More Fixed Costs Counterclaims under the RTA Protocol45.29G. (1) If in any case to which this Section applies (a)the defendant brings a counterclaim which includes a claim for personal injuries to which the RTA Protocol applies; (b)the counterclaim succeeds; and (c)the court makes an order for the costs of the counterclaim, rules 45.29B, 45.29C, 45.29I, 45.29J, 45.29K and 45.29L shall apply. (2) Where a successful counterclaim does not include a claim for personal injuries (a)the order for costs of the counterclaim shall be for a sum equivalent to one half of the applicable Type A and Type B costs in Table 6; (b) where the defendant (i) lives, works, or carries on business in an area set out in Practice Direction 45; and (ii) instructs a legal representative who practises in that area, the costs will include, in addition to the costs allowable under paragraph (a), an amount equal to 12.5% of those costs; (c) if an order for costs is made pursuant to this rule, the defendant is entitled to disbursements in accordance with rule 45.29I; and (d) where appropriate, VAT may be recovered in addition to the amount of any costs allowable under this rule.
10 9. Defendant Fixed Costs Can they recover anything? Defendants costs 45.29F. (1) In this rule (a) paragraphs (8) and (9) apply to assessments of defendants costs under Part 36; (b) paragraph (10) applies to assessments to which the exclusions from qualified one way costs shifting in rules and apply; and (c) paragraphs (2) to (7) apply to all other cases under this Section in which a defendant s costs are assessed. (2) If, in any case to which this Section applies, the court makes an order for costs in favour of the defendant (a) the court will have regard to; and (b) the amount of costs order to be paid shall not exceed, the amount which would have been payable by the defendant if an order for costs had been made in favour of the claimant at the same stage of the proceedings. (3) For the purpose of assessing the costs payable to the defendant by reference to the fixed costs in Table 6, Table 6A, Table 6B, Table 6C and Table 6D, value of the claim for damages and damages shall be treated as references to the value of the claim. (4) For the purposes of paragraph (3), the value of the claim is (a) the amount specified in the claim form, excluding (i) any amount not in dispute; (ii)in a claim started under the RTA Protocol, any claim for vehicle related damages; (iii)interest; (iv)costs; and (v)any contributory negligence; (b)if no amount is specified in the claim form, the maximum amount which the claimant reasonably expected to recover according to the statement of value included in the claim form under rule 16.3; or (c) 25,000, if the claim form states that the claimant cannot reasonably say how much is likely to be recovered. (5) Where the defendant (a) lives, works or carries on business in an area set out in Practice Direction 45; and (b) instructs a legal representative who practises in that area, the costs will include, in addition to the costs allowable under paragraph (2), an amount equal to 12.5% of those costs. (6) Where an order for costs is made pursuant to this rule, the defendant is entitled to disbursements in accordance with rule 45.29I (7) Where appropriate, VAT may be recovered in addition to the amount of any costs allowable under this rule. (8) Where, in a case to which this Section applies, a Part 36 offer is accepted, rule 36.10A will apply instead of this rule. (9) Where, in a case to which this Section applies, upon judgment being entered, the claimant fails to obtain a judgment more advantageous than the claimant s Part 36 offer, rule 36.14A will apply instead of this rule. (10) Where, in a case to which this Section applies, any of the exceptions to qualified one way costs shifting in rules and is established, the court will assess the defendant s costs without reference to this rule.
11 10. Claimant s Part 36 offers, a saving grace? If the claimant obtains a judgment at least as advantageous as their own Part 36 offer then, unless the court considers it unjust, they will be entitled to: Their costs up to the end of the relevant period, presumably in accordance with the relevant fixed costs tables Costs on the indemnity basis from the end of the relevant period Interest on damages at up to 10% above base for some or all of the period starting with the date on which the relevant period ended. Interest on the indemnity costs at up to 10% above base. An additional amount calculated as 10% of the amount (damages) awarded From a practical point of view in this regard, once a claim has exited the portal, therefore, it will be wise for claimants to consider reasonable early Part 36 offers to encourage defendants to settle. 11. Claimant Accepts Defendant s Part 36 offer within relevant period A. (1) This rule applies where a claim no longer continues under the RTA or EL/PL Protocol pursuant to rule 45.29A(1). (2) Where a Part 36 offer is accepted within the relevant period, the claimant will be entitled to the fixed costs in Table 6B, Table 6C or Table 6D in Section IIIA of Part 45 for the stage applicable at the date on which notice of acceptance was served on the offeror. (3) Where (a) a defendant s Part 36 offer relates to part only of the claim; and (b) at the time of serving notice of acceptance within the relevant period the claimant abandons the balance of the claim, the claimant will be entitled to the fixed costs in paragraph (2).
12 11. Claimant Accepts Defendant s Part 36 offer within relevant period A. (1) This rule applies where a claim no longer continues under the RTA or EL/PL Protocol pursuant to rule 45.29A(1). (2) Where a Part 36 offer is accepted within the relevant period, the claimant will be entitled to the fixed costs in Table 6B, Table 6C or Table 6D in Section IIIA of Part 45 for the stage applicable at the date on which notice of acceptance was served on the offeror. (3) Where (a) a defendant s Part 36 offer relates to part only of the claim; and (b) at the time of serving notice of acceptance within the relevant period the claimant abandons the balance of the claim, the claimant will be entitled to the fixed costs in paragraph (2). 12. Claimant Accepts Defendant s Part 36 out of time. (4) Subject to paragraph (5), where a defendant s Part 36 offer is accepted after the relevant period (a) the claimant will be entitled to the fixed costs in Table 6B, Table 6C or Table 6D in Section IIIA of Part 45 for the stage applicable at the date on which the relevant period expired; and (b) the claimant will be liable for the defendant s costs for the period from the date of expiry of the relevant period to the date of acceptance. (5) Where the claimant accepts the defendant s Protocol offer after the date on which the claim leaves the Protocol (a) the claimant will be entitled to the applicable Stage 1 and Stage 2 fixed costs in Table 6 or Table 6A in Section III of Part 45; and (b)the claimant will be liable for the defendant s costs from the date on which the Protocol offer is deemed to be made to the date of acceptance. But note (8) Fixed costs shall be calculated by reference to the amount of the offer which is accepted. (9) Where the parties do not agree the liability for costs, the court will make an order as to costs.
13 (10) Where the court makes an order for costs in favour of the defendant (a) the court will have regard to; and (b) the amount of costs ordered shall not exceed, the fixed costs in Table 6B, Table 6C or Table 6D in Section IIIA of Part 45 applicable at the date of acceptance, less the fixed costs to which the claimant is entitled under paragraph (4) or (5). (11) The parties are entitled to disbursements allowed in accordance with rule 45.29I incurred in any period for which costs are payable to them. 13. Claimant Fails to Beat Defendant s Protocol offer 3) Where the claimant fails to obtain a judgment more advantageous than the defendant s Protocol offer (a)the claimant will be entitled to the applicable Stage 1 and Stage 2 fixed costs in Table 6 or Table 6A in Section III of Part 45; and (b) the claimant will be liable for the defendant s costs from the date on which the Protocol offer is deemed to be made to the date of judgment; and (c) in this rule, the amount of the judgment is less than the Protocol offer where the judgment is less than the offer once deductible amounts identified in the judgment are deducted. (4) For the purposes of this rule a defendant s Protocol offer is either ( a)defined in accordance with rules and 36.18; or (b)if the claim leaves the Protocol before the Court Proceedings Pack Form is sent to the defendant (i)the last offer made by the defendant before the claim leaves the Protocol; and (ii)deemed to be made on the first business day after the claim leaves the Protocol. (5) A reference to the Court Proceedings Pack Form is a reference to the form used in the Protocol. (6) Fixed costs shall be calculated by reference to the amount which is awarded.
14 (7) Where the court makes an order for costs in favour of the defendant (a) the court will have regard to; and (b) the amount of costs ordered shall not exceed, the fixed costs in Table 6B, 6C or 6D in Section IIIA of Part 45 applicable at the date of judgment, less the fixed costs to which the claimant is entitled under paragraph (2) or (3). (8) The parties are entitled to disbursements allowed in accordance with rule 45.29I incurred in any period for which costs are payable to them Claimant Fails to Beat Defendant s Part 36 offer If the claimant fails to obtain a judgment more advantageous than a defendant s Part 36 offer, then unless the Court considers it unjust, the claimant gets the fixed costs under the relevant table up to the stage the case had reached at the end of the relevant period, but must pay the defendant s costs from the end of the relevant period to the date of judgment. The costs will again be capped as in Fixed Costs The Great Escape? Claims for an amount of costs exceeding fixed recoverable costs 45.29J. (1) If it considers that there are exceptional circumstances making it appropriate to do so, the court will consider a claim for an amount of costs (excluding disbursements) which is greater than the fixed recoverable costs referred to in rules 45.29B to 45.29H. (2) If the court considers such a claim to be appropriate, it may (a)summarily assess the costs; or (b)make an order for the costs to be subject to detailed assessment. (3) If the court does not consider the claim to be appropriate, it will make an order (a)if the claim is made by the claimant, for the fixed recoverable costs; or (b)if the claim is made by the defendant, for a sum which has regard to, but which does not exceed the fixed recoverable costs, and any permitted disbursements only. Failure to achieve costs greater than fixed recoverable costs 45.29K. (1) This rule applies where
15 (a) costs are assessed in accordance with rule 45.29J(2); and (b) the court assesses the costs (excluding any VAT) as being an amount which is in a sum less than 20% greater than the amount of the fixed recoverable costs. (2) The court will make an order for the party who made the claim to be paid the lesser of (a) the fixed recoverable costs; and b) the assessed costs. a) In reality, the Court is likely to say that very few claims are exceptional. b) The definition of exceptional is likely to be subject to some satellite litigation. The Author Andrew Mckie, Barrister of Clerksroom Manchester, is a specialist in claimant and defendant personal injury, with a particular interest in cases involving alleged fraud and credit hire. Andrew is a former Associate Solicitor and Solicitor Advocate, and was called to the Bar in July Before qualifying, as a Barrister, Andrew has 6 years advocacy experience, as a Solicitor. Andrew has worked for a number of leading Legal 500 firms specialising in RTA fraud, including Keoghs LLP and Weightmans LLP, acting for some of the leading insurance companies in the UK. Andrew has also worked for a number of leading claimant personal injury and credit hire law firms, acting for some of the largest credit hire companies in the UK. Most recently, Andrew was the Head of Litigation and In House Solicitor Advocate at a claimant personal injury and credit hire firm, with over 50 staff, and Andrew brings this vast experience, as a Solicitor, to the Bar. Andrew is a Member of the Personal Injuries Bar Association and Association of Personal Injury Lawyers Andrew can be contacted by: andrewmckie@btinternet.com Mobile: Chambers:
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