Friday, 29 January 2016

The Jackson Proposals on Fixed Costs for the Multi-Track

Lord Justice Jackson gave the IPA Annual Lecture on 28 January 2016: "Fixed Costs - The Time Has Come". His proposals provide a serious threat to the independent clinical negligence bar.

He argues, as he has done previously, for the introduction of an extensive regime of fixed costs for civil litigation. There should be no "Balkanisation" of costs regimes, but rather a one size fits all "grid" of fixed costs for multi-track claims up to £250,000 - what he calls the "lower reaches" of the multi-track.

The grid can be found at page 13 of his lecture.  By way of example, the fixed costs for a clinical negligence claim for £100,000 damages which settles on acceptance of a Part 36 Offer after exchange of expert evidence would be £17,250 plus disbursements and VAT.

These fixed costs include Counsel.

If work needs to be done in London, add 15% to the costs. For work that needs to be done in Manchester, add nothing.

The problem which these proposals seek to address is that "high litigation costs inhibit access to justice ... If people cannot afford to use the courts they may go elsewhere with possibly dubious results..."

The problem with the high level of costs caused by clinical negligence is not that it prevents access to justice, but that it costs the taxpayer too much money. That is why it is the Department of Health that is already leading the introduction of fixed costs for clinical negligence litigation - it wants to reduce the cost to the taxpayer. The Dept of Health does not want to encourage more claimants to have access to the courts! Saving money may be a laudable aim in itself but introducing fixed costs for clinical negligence would not improve access to justice.

And now to my special pleading on behalf of the Bar. For a clinical negligence barrister up to say 12 years call, most, perhaps all, of their cases will be claims for under £250,000. Realistically a barrister cannot take on a clinical negligence claim under direct public access - they always rely on being a instructed by a solicitor. If solicitors themselves rely on a fixed fee for a case, they will be reluctant to share that out by instructing a barrister. They will want to keep as much of the work as possible in-house.

You can forget the trial fees: as I tell my clinical negligence clients, over 95% of claims never get to trial. It follows that, under the Jackson proposals, fixed costs will only very rarely include the largest element: the trial fee. In all but a few cases the fixed fees will be limited to stages prior to the PTR.

There are substantial differences between these proposals and the fixed fees for PI fast track claims. There are very few multi-track clinical negligence trials each year. The fixed trial fees proposed include solicitor and barrister doing the preparation for trial and all work at and around the trial. In a multi-track clinical negligence claim that can involve a lot of work beyond the advocacy. In contrast there are many fast track PI trials and there is a fixed fee specifically for the trial advocate.

In the vast majority of cases where claimants succeed and their lawyers are actually paid, the fixed costs proposed are at a level that would strongly discourage use of the independent Bar. Suppose Mr and Mrs Smith instruct solicitors because they are concerned that negligent obstetric care caused their baby to suffer brain damage and later die in the neonatal unit. Damages scrape over £25,000. The solicitor has to obtain and examine the medical records, explain the process of investigation and litigation to the clients, obtain evidence from them, instruct relevant experts (at least two), ask relevant questions of the experts to ensure that there is a valid claim and then advise on the prospects of success and write a letter of claim and consider the reasoned response. They have to keep the clients informed at all stages. Where, out of the fixed fee of £3250 would the solicitor find the money to pay Counsel to become involved pre-action?

It would be bad enough if these were the fees for each case handled by lawyers. Under the CFA system a lawyer will only receive fees in a proportion of the cases on which they work.

Of course fixed fees provide an incentive for the unscrupulous legal service providers to do less work for the same money: to process claims with minimum effort. Better to under-investigate and under-settle than to put in more time and effort for the same legal fees. Why bother paying a barrister out of fixed costs to give an independent opinion on the merits and value of the claim? Use more para-legals and fewer, expensive qualified lawyers.

Widening access to a poor legal service is not the same as improving access to justice.

As for the 15% uplift for London work! I shall keep my counsel - which is more than these proposals would do.

1 comment:

  1. Most likely legal teams would have to take a cut of any damages to make this remotely commercially viable. This in turn would discourage many potential litigants from taking action. That's the real benefit for the NHS. No claims, NHS damages, no costs!