Rise in public liability claims

Commenting on the shock 57% jump in public liability claims in 2012/13 an APIL press release says:

“This is the final proof, if ever proof were needed, that the compensation culture is out of control. It is inconceivable that the number of genuine claims would increase by such a staggering amount in such a short period. We urge the Ministry of Justice to clamp down on these bogus claims and all those associated with them.”

Actually, APIL said no such thing.

They did recently make a big song and dance about the modest reduction in whiplash claims. To be fair, this is in the context of the ongoing debate as to how to control rising RTA insurance with the finger being pointed as the compensation culture. Although, to put this in context, the number of RTA claims for 2012/13 is still 44% higher than in 2006/07.

So what else do the 2012/13 DWP figures show:

Clinical negligence claims – 18% increase on last year (87% increase on 2006/07)
Employers’ liability claims – 4% increase on last year (8% decrease on 2006/07)
Public liability – 57% increase on last year (107% increase on 2006/07)
RTA – 10% decrease on last year (44% increase on 2006/07)
Other – 610% increase on last year (595% increase on 2006/07)
Total – 1% increase on last year (47% increase on 2006/07)

So, even with a large drop in RTA claims, by far the largest category, the overall number of claims has still managed to increase.

But, unless I’ve missed it, I’ve seen no mention or commentary in the legal press or elsewhere as to the massive one year jump from 104,863 to 164,973 in PL claims. I can understand that APIL may not want to be highlighting these figures in the context of the compensation culture debate but surely there is a story here for someone.

Inflated legal costs claims

At the recent Association of Costs Lawyers’ Annual Conference a survey was undertaken of delegates. This included a question as to how many members had experienced unqualified costs draftsmen inflating their bills. There was no corresponding question as to how many had experienced qualified, and regulated, Costs Lawyers inflating their bills, nor, for that matter, how many had experienced qualified and regulated solicitors inflating their bills.


Detailed assessment offers

A recent email update from Costs Law Reports covered some of the recent changes to the Civil Procedure Rules. This included the following comment:

“Parties who wish to make offers to settle the costs can no longer do so by making an offer ‘without prejudice save as to the costs of assessment’. On 1 April 2013, CPR 47.19 was revoked and instead the provisions of Part 36 apply, so a paying party who wishes to protect himself against having to pay the costs of assessment must now make an offer under Part 36 (see CPR 47.20).”

If this is meant to represent a statement of the law, it is wrong (even ignoring the transitional provisions concerning cases where detailed assessment proceedings were commenced before 1 April 2013).

The new PD 8.3 to CPR 47.9 states:

“The paying party must state in an open letter accompanying the points of dispute what sum, if any, that party offers to pay in settlement of the total costs claimed. The paying party may also make an offer under Part 36”

Although it remains something of a mystery exactly what purpose the open offer is intended to fulfil, it is difficult to envisage a situation where a paying party “wins” on their open offer but is then not awarded their costs of the detailed assessment proceedings.

Further, in so far as “provisions of Part 36 apply to the costs of detailed assessment proceedings” that also includes CPR 36.1(2):

“Nothing in this Section prevents a party making an offer to settle in whatever way he chooses, but if the offer is not made in accordance with rule 36.2, it will not have the consequences specified in rules 36.10, 36.11 and 36.14.”

The right to make a “Calderbank offer” in costs proceedings (ie one “without prejudice save as to the costs of assessment”) remains.

Further, PD 14.3(d) to CPR 47.15 states that the following must be filed with the court when requesting a provisional assessment:

“the offers made (those marked ‘without prejudice save as to costs’ or made under Part 36 must be contained in a sealed envelope, marked ‘Part 36 or similar offers’, but not indicating which party or parties have made them)”

It is therefore clear that the rules envisage offers other than Part 36 ones being relevant to the costs of assessment; although it is perhaps rather alarming that those who drafted the new rules do not appear to appreciate the distinction between an offer that is “without prejudice save as to the costs of assessment” and one made “without prejudice save as to costs”.

Costs budgeting

Job advertisement in Costs Lawyer magazine:

“specialist Law Cost Practice is looking to recruit an experienced law costs specialist who can deal with bill drafting, PODs and costs budgeting. The ideal candidate will have a minimum of 2 years experience dealing with all areas of Law Costs”

Given the limited costs management pilots, I doubt many, if any, costs draftsmen with only two years’ experience will have any costs budgeting experience, much less had the opportunity to discover whether 2-3 years later those budgets have proved to be even remotely realistic.

We therefore have the bizarre prospect of costs firms holding themselves out as being skilled at preparing costs budgets when they intend to give the work to those with no actual experience of the task and almost certainly far too little practical experience to make even an educated guess.

New proportionality test in detailed assessment

Costs Law Reports issues a free monthly bulletin. This month’s discusses the new proportionality test. It includes the paragraph:

“For work undertaken before 1 April 2013, CPR 44.3(7)(b) provides that CPR 44.4(2)(a) as it was on 31 March 2013 still operates. Thus, where a case was commenced before 1 April 2013, the “old” rules apply to work done before that date, but anything carried out thereafter is subject to the new proportionality rule where the standard basis applies.”

This is a misreading of the rules (although perhaps understandable given this rule has already been changed once since originally published and in a different manner to the one Richard LJ said the amendment would take).

The relevant rule, as contained in the Civil Procedure (Amendment No.2) Rules 2013 reads:

“Paragraphs (2)(a) and (5) do not apply in relation to—

(a) cases commenced before 1st April 2013; or
(b) costs incurred in respect of work done before 1st April 2013,

and in relation to such cases or costs, rule 44.4.(2)(a) as it was in force immediately before 1st April 2013 will apply instead.”

So, for the avoidance of doubt:

All work done pre-1st April 2013 - Old proportionality test applied to all work.

All work done post-1st April 2013 - New proportionality test applied to all work.

Work done pre and post-1st April 2013. Proceedings not issued - Old proportionality test applied to work done pre-1st April 2013. New proportionality test applied to work done post-1st April 2013.

Work done pre and post-1st April 2013. Proceedings issued pre-1st April 2013 - Old proportionality test applied to all work.

Work done pre and post-1st April 2013. Proceedings issued post-1st April 2013 - Old proportionality test applied to work done pre-1st April 2013. New proportionality test applied to work done post-1st April 2013.

Costs Lawyer hourly rates

At the question and answer sessions at the Association of Costs Lawyers’ Annual Conference there were a number of complaints from the floor as to the tendency of judges to limit Costs Lawyers’ hourly rates to Grade D guideline rates. This was taken as being a great insult to experienced Costs Lawyers of many years’ experience. This issue was raised in the questions to the new Council and the suggestion raised that the ACL should seek to lobby for higher rates.

New Chairman Murray Heining acknowledged that this was something that the Council could look into but suggested caution on the basis that the Association may find itself shooting itself in the foot. Murray is no fool. This chimed in with a chat I had at the conference with another experienced Costs Lawyer. One of his solicitor clients had previously been unhappy with their hourly rates being routinely reduced by the local court and decided to undertake an expense of time calculation in the hope that armed with this information they would be able to persuade the court to allow them higher rates. They undertook the calculation only to discover the rates they were already recovering were probably on the generous side. They sensibly decided to let sleeping dogs lie.

Murray is aware that many Costs Lawyers are “kitchen table” draftsmen with minimal overheads. Indeed, I rather suspect some have virtually non-existent overheads.

I have seen a number of comments on this Blog and on the ACL Forum complaining about the fact the practice directions to CPR 47 are not on the Ministry of Justice website and asking where a copy can be found. It is indeed bizarre that this is missing from the website but the short answer is that a copy can be found in White Book Civil Procedure 2013 Special Supplement that was issued free with the White Book 2013 on publication and appears again in the free updating White Book Civil Procedure 2013 Cumulative Special Supplement (and presumably Green Book equivalent). Of course, the problem for many law costs draftsmen and Costs Lawyers is that they would consider it an unnecessary and wildly extravagant step to purchase a White Book/Green Book and rely on free material on the interweb. These are the same people who turn up to detailed assessment hearings without a copy of the CPR and hope that annoying issues relating to the wording of the rules aren’t raised.

I rather suspect that some of those who complain most about the terrible injustice of having their rates reduced to Grade D are those with overheads a fraction of the “typical” Grade D fee earner.

Cincian law

While flicking through a copy of Tacitus’s The Annals of Imperial Rome (as you do) I came across a reference to the ancient Cincian law forbidding the acceptance of money or gifts for legal services.

Lord Justice Jackson clearly missed a trick when making his proposals for controlling legal costs and it seems as though the introduction of Cincian law would have been the simple solution. (The Commercial and Admiralty Courts should obviously be exempt as excessive legal costs are not a problem there.)

I’m therefore going to launch an on-line petition calling for the introduction of Cincian law. I’m sure this is something that both claimant and defendant lawyers can unite behind and show the general public we are motivated by loftier ideals than simply making money.