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Flight from the courts due to fee increases

Court fees in personal injury and clinical negligence litigation have increased dramatically in recent times. Section 180 of the Anti-Social Behaviour, Crime and Policing Act 2014 empowered the Lord Chancellor to set “enhanced” court fees. It states that “A fee prescribed…must be used to finance an efficient and effective system of courts and tribunals”. However, the act does not further define what is meant by “efficient and effective”. Is the money to be used to provide more staff, or newer buildings, or more costs budgeting training for judges, or better biros?

Enhanced fees in personal injury and clinical negligence claims

The opportunity was rapidly taken to set enhanced fees in personal injury and clinical negligence litigation, via the Civil Proceedings and Family Proceedings Fees (Amendment) Order 2015. Under the new regime, effective from 9 March 2015, a personal injury litigant must pay 5% of the estimated value of a claim where the sum sought exceeds £10,000, simply in order to start proceedings, with a cap of £10,000. So, in order to bring a claim for £200,000, a court fee of £10,000 is payable. It is hard to see how this fits with the desire to address the perceived problems about (lack of) proportionality of costs, which led to Jackson LJ’s review and the reforms brought in on 1 April 2013.

Further fee increases

But barely had the personal injury/clinical negligence fee increases been implemented, than already a consultation on enhanced fees for possession claims and general applications in civil proceedings was underway. The MoJ has confirmed that it will increase the fees for:

  • Issuing a possession claim in the County Court, from £280 to £355 (26%).
  • Making general applications in civil proceedings (with certain exceptions):
    • from £50 to £100 (100%), for an application by consent;
    • from £155 to £255 (64%), for a contested application made on notice.

In addition, the Ministry of Justice has launched another consultation on proposals for yet further increases to court fees. These include an increase in the maximum fee for money claims (including counterclaims) from £10,000 to at least £20,000 (with personal injury and clinical negligence claims excluded from this higher cap, at least for the moment), and an uplift of 10% for all remaining fees charged in the civil court system. This proposal would include the fees for assessment of costs.

Impact of Employment Tribunal fees

We already know what happened to Employment Tribunal claims when fees were introduced in July 2013. The MoJ’s own figures in June 2015 showed that there were 16,456 single claims received in 2014/15, a decrease of 52% in comparison with 2013/14. Of course the actual effect on MoJ revenue was that it declined. In its June figures, the MoJ stated that the fall in receipts for Employment Tribunals seen from October to December 2013 coincided with the introduction of Employment Tribunal fees.

Consultation on fixed recoverable costs in lower value clinical negligence claims

The increase in personal injury/clinical negligence court fees came not long after the abolition, with effect from 1 April 2013, of the right to recover success fees and ATE premiums from the losing party. If a solicitor or counsel is to charge a success fee at all, it must come out of the client’s damages.

Meanwhile, the Department of Health is beginning a consultation on the introduction of a regime of fixed recoverable costs in lower value clinical negligence claims, with likely implementation in October 2016. A pre-consultation phase has been launched, which will last until the end of August 2015. A formal consultation will be published in November 2015, and will close in December 2015. We know that, as presently envisaged, this would involve not just a fixed recoverable costs scheme, but also a revision of the current Pre-Action Protocol for the Resolution of Clinical Disputes and an amendment to the CPR. The Law Society Gazette reported last week that clinical negligence claims of up to £250,000 may be pulled into the fixed fee regime, rather than just those of up to £100,000, as is presently envisaged.

Diminution in service

What, then, of “efficient and effective”? In parallel with the changes above goes the diminution in service as the courts are increasingly stretched through lack of funding. We know that the added burden of costs budgeting led to long delays in listing in the Queen’s Bench Division Masters’ Corridor (with a moratorium on costs management from 1 October 2015 for three months to try and alleviate the problem). There are reports of one major County Court being three weeks behind in answering its post. To add to all of this, in July 2015, the MoJ/HMCTS began consultations about proposals to close 91 courts across England and Wales, including 19 County Courts. The proposals for London alone are to close Bow, Hammersmith and Woolwich County Courts.

Move towards arbitration and alternative dispute resolution?

And so there are signs of a potential move away from personal injury litigation altogether. There is a new Personal Injury Claims Arbitration Service, and a number of chambers are offering dedicated arbitration/mediation services. In allied litigation, in March 2015, the Association of Costs Lawyers launched a costs ADR facility, and June 2015 saw the launch of Costs Alternative Dispute Resolution (CADR).

Failing to engage in mediation/ADR has itself been penalised in several recent cases. In Lynn v Borneos LLP t/a Linnels, one ground for a reduction of 40% to the costs awarded in favour of the winner was unreasonably refusing to engage in mediation. In Laporte v The Commissioner of Police for the Metropolis, failure to engage in ADR which had a reasonable prospect of success resulted in costs reduced being by a third. In Garritt-Critchley v Ronnan and Solarpower, the defendant was ordered to pay indemnity rather than standard costs where it had failed to engage in mediation or ADR. In the present climate, it is hard to see why a move to ADR/mediation should not gather speed.

39 Essex Chambers Judith Ayling

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