Monthly Archives: April 2009

Retirement of Tony Girling

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The majority of those in the costs industry will be more than familiar with Tony Girling, at least by reputation.

Tony is former President of the Law Society, sat for many years as a High Court Costs Assessor and was a founder member of the Supreme Court Costs Office Practitioners Group.

He is current probably best known for his regular costs conferences through CLT and for his unrivalled knowledge of developments in the field of legal costs. He has been a giant in a costs world of pygmies.

It is therefore with no small element of regret to report his retirement from all things legal with CLT’s Assessing and Recovering Costs in 2009 Conference being his last "public appearance".

GWS wish him a happy retirement and all the best for the future.
 

New claims process facing problems

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Another quick update on an issue I have being covering in previous blogs. This is the problem over drafting the rules to cover the new claims process for low value RTAs. The recent edition of Litigation Funding reports: “We understand that talks between all the stakeholders to define the process are not going well (they were meant to have been concluded by Christmas), and that the Civil Justice Council has been drafted in to run a mediation over the next three months. The planned implementation date of 1 October 2009 is starting to look more than a little optimistic, and the thought arises afresh as to whether it is really worth the bother”.

APIL complains about excessive costs of litigation

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Whether excessive legal costs are really a problem depends, in part, from what perspective you are considering matters. Defendants have little difficulty appreciating how problematic this issue is. However, claimant representatives have been far slower to join in the criticisms. How strange then that the Association of Personal Injury Lawyers (APIL) should now join in and what a strange area they have decided to highlight.

Responding to the Ministry of Justice consultation on increasing civil court fees, APIL said “injured people could be left high and dry as the increases will effectively price them out of the courts”. APIL president Amanda Stevens said the changes would mean fees could rise, on average, by around 55 per cent, and more than 4,000 per cent in some areas. “Increases on this scale are staggering and will undoubtedly make it more difficult for injured, vulnerable people to receive assistance from the courts if a claim cannot be settled any other way,” she said.

In a previous blog I commented on one of the proposed fee increases. So what increases does APIL believe will prevent injured people receiving proper compensation? The only increases that APIL felt able to comment on are those in relation to detailed assessment proceedings. Other than the truly eye watering increase for LSC funded cases, the other increases raise, for example, the fee for a request for a default costs certificate from £45 to £60 and the fee for appealing a decision made in detailed assessment proceedings from £105 to £200.

Now, I may be somewhat naive here, but do any lawyers really believe that the court fees for certain aspects of detailed assessment are going to be a factor that discourages litigation? The average litigant will not have the slightest idea as to the potential costs of general litigation, let alone the costs of the costs. I would be fascinated to see a firm of solicitors that provides costs estimates to their clients that are so carefully calculated that these increases are going to be factored-in or, indeed, that any solicitors actually even consider the potential costs of detailed assessment proceedings when starting a claim and advising their client.

When the Guideline Hourly Rates were increased at the beginning of the year from, for example, £203 per hour for a Grade A fee earner in Band One to £213 per hour I must have missed the APIL press release complaining as to how this would price injured people out of the courts. Those increases will have a far larger impact on a far larger number of litigants than the proposed fee increases for detailed assessment proceedings. Of course, this is one area of legal costs that APIL has no interest in controlling.

Court fees represent a tiny proportion of the costs of personal injury litigation. The idea that these proposed fee increases will have any impact on the willingness or ability of potential claimants to bring claims is ludicrous. More interestingly, the fact that APIL has never expressed any concerns about ever increasing hourly rates highlights the real problem in the system. The combination of fee shifting, CFAs, trade union funding and BTE means most claimants in personal injury cases no longer have any interest whatsoever in the legal fees that their lawyers are incurring. It will be interesting to see whether the Jackson review is able to produce any solution to this problem and introduce some form of market control to the system.

Legal costs uncertainty continues for costs draftsmen and lawyers

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In previous posts I have been commenting on the proposed new claims process and the problems that arise as to what the relationship will be between the proposed new staged fixed fees under the new claims process and the existing fixed predictable costs (CPR 45.7-45.14).

This problem is beginning to look more acute as time goes on. At the recent Legal & Medical conference, Amanda Stevens, President of APIL, raised concern over the level of consultation yet needed to deliver a tight and clarified costs process by the expected reform start date of October 2009.

There will be a continuing period of uncertainty for insurers, lawyers and law costs draftsmen.

Don’t be surprised if the whole concept is scrapped and they go right back to the drawing board. You heard it here first.

Evidence of the compensation culture?

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I’ve recently come across the following video. The message itself is somewhat confused in that it starts by commenting on an attack that was launched on a defendant lawyer and then somehow uses this to support arguments concerning there being a “compensation culture”. Nevertheless, I present it here as it at least gives something of the public perception of lawyers:

A more detailed review of the original story appeared in an article in The Telegraph (link to external site). Whatever one’s view of the pleural plaques litigation, an attack on a solicitor involved in the test cases from MPs and fellow solicitors is extraordinary.

The law as it currently stands in relation to pleural plaques litigation has led to a reduction in the amount of work that my firm would otherwise handle. We deal with a significant amount of asbestos litigation for defendants and pleural plaques work previously represented a sizeable proportion of that work. Nevertheless, for what it’s worth, I think the House of Lords was correct to find that pleural plaques was not an injury for which compensation should be awarded. However, I am never able to get out of my mind the suspicion that those claimant lawyers who campaign for a change in the law in this area, and argue that a terrible injustice has been done, are actually primarily concerned with the potential fees they have lost rather than the “injured”.

Hourly Rates and the RPI

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The constant refrain from claimant representatives whenever a paying party seeks to question the accuracy of a bill of costs is that one should not seek to go behind the signature to the bill unless there is a “genuine issue” as to whether the bill is accurate, and the case of Bailey v IBC Vehicles Ltd [1998] EWCACiv 566 is cited in support. I’ll save for another day a full scale rant as to how misplaced the Bailey approach is.

However, one simple example of how naive the Bailey decision is can been seen on a daily basis following the routine disclosure of CFAs. I’m not now talking about whether the solicitor really has managed to comply with the onerous requirements of the now revoked CFA Regulations 2000. The issue I have in mind is the rather more straightforward one of the hourly rates claimed. A CFA will usually set out the hourly rates that are to be charged. However, the rates claimed in the corresponding bill often bear no relationship to the rates allowed for in the CFA itself. At its most basic, this is often an example of bills being signed without the slightest concern for accuracy or the indemnity principle. I don’t trust signatures on bills due to years of experience in the costs world.

A more subtle issue arises in relation to increases in the hourly rate. A common clause in many CFAs, and this follows one version of the Law Society’s Model CFA wording, is: “We will not increase the rate by more than the rise in the Retail Prices Index”. Despite this clear and unambiguous wording, bills are routinely presented where the hourly rates increases year-on-year by more than the RPI increase. When challenged, the response from some claimants is that they wrote to the client informing them of the purported increase and because the client did not challenge the RPI busting increase it is therefore binding on the client and can be recovered from the paying party. Not so said the Senior Costs Judge in Findley v Jones and MIB [2009] EWHC 90130 (Costs) (reaching the same conclusion as the judge in Puksis v Brumby [2008] EWHC 90095 (Costs)). Any increase allowable is limited to the rise in the RPI given the clear terms of such CFAs.

And this brings us on to a very topical issue. In recent years the increases in the Guideline Hourly Rates have been based on the Average Earnings Index for private sector service industries. This has tended to have a higher annual increase than the RPI, hence the problem created by the RPI clause. But now for the latest news. It has just been reported that that the RPI fell to 0% in February. If the RPI remains at this level, or even dips into negative territory, those firms who have the RPI clause will be unable to increase the hourly rates on any of their cases, regardless of whether the Guideline Hourly Rates increase. The only consolation to claimant lawyers is that these are not “tracker” clauses, otherwise firms would potentially be finding themselves having to reduce their rates in coming months. Defendant lawyers have been used to this prospect for years but this would come as something of a shock to the system for claimant lawyers.