Legal WatchWhat’s on the horizonApril 2014

Events

Plexus and Greenwoods hold a series of events which are open to interested clients. See below for those being held in the next months:

MBIG Seminar | 22.05.14 | London

In This Issue:

• Cost budgeting and case management by the courts

• Fixed costs

• Hourly rates

• Damages-based agreements

• Discount rate

• Whiplash

• Insurance Contracts Bill

• Third Party (Rights against Insurers) Act 2010

• Court fees

• Law reform (fraud)

The horizon in dispute resolution is hazy but we bring you a

summary of what we see as the key developments that we

can look forward to in the near future.

Introduction

Cost budgeting and case management by the courtsComment: There has been great concern in both claimant

and defendant camps that the reforms of April 2013 have

seen justice between the parties and common sense take

second and third place to an over-prescriptive application

by the courts of the procedural rules. Practitioners have

been operating in a climate of fear in which even sensible

agreement between the parties has not been permitted. This

was causing a front-loading of costs, an excess of court

applications and, in some cases, an unexpected windfall to

a party where the other side fell foul of the court and had all

or part of its claim struck out.

We now hear that a degree of common sense has prevailed

and the rules are to be amended to permit parties to

agree time extensions of up to 28 days for serving certain

documents, without needing to make an application to the

court.

Few judges have shown any appetite for dealing with costs

budgeting in any detail. It is recognised that there has been

no consistency in the way this subject has been approached

by the courts. A number of judges have, however, adopted

a broad-brush approach to proportionality to reduce costs

budgets and effectively cap them. This has probably worked

to the benefit of defendants more than claimants.

With effect from 22 April, costs budgeting is to be extended

to virtually all multi-track cases with a value of up to £10m

and CPR3.15(1) will be amended so that we are likely to see

more costs management orders.

Fixed costsComment: Another indication from the government is that,

in due course, there will be a substantial increase in the

value of claims subject to fixed cost regimes, perhaps even

as high as £250,000.

Hourly ratesComment: The consultation on guideline hourly rates closed

in December 2013 and the Civil Justice Costs Committee

was due to report to the Master of the Rolls (as head of the

solicitors’ profession) by 31 March. The indications are that

it will be some time yet before we know the outcome.

Damages-based agreementsComment: These were legalised as part of the package of

reforms intended to replace CFAs where the defendant was

liable for the success fee. There has been little appetite

for DBAs but it seems likely that in the future there will be

reforms to permit hybrid agreements combining DBAs and

CFAs, which may be more popular.

Discount rateComment: It is official: there is no news on if, or when, any

change will occur.

WhiplashComment: The government is pressing ahead with its

reforms with a further announcement due before the

summer recess. The most recent suggestion is that the

cost of medical reports will be fixed. There is concern that

the proposed medical panels are open to abuse but the

government is insistent that they will be properly established

and policed.

Insurance Contracts BillComment: This bill is the commercial equivalent of the

Consumer Insurance (Disclosure and Representations) Act

2012. Consultation on the final wording of the Bill has been

limited and there are widespread concerns that the unless

some of the text is clarified there could be uncertainty and

thus disputes as to how the resulting legislation is to be

interpreted.

The information and opinions contained in this document are not intended to be a comprehensive study, nor to provide legal advice, and should not be relied on or treated as a substitute for specific advice concerning individual situations. This document speaks as of its date and does not reflect any changes in law or practice after that date. Plexus Law and Greenwoods Solicitors are trading names of Parabis Law LLP, a Limited Liability Partnership incorporated in England & Wales. Reg No: OC315763. Registered office: 8 Bedford Park, Croydon, Surrey CR0 2AP. Parabis Law LLP is authorised and regulated by the SRA.

www.plexuslaw.co.ukwww.greenwoods-solicitors.co.uk

Contact UsFor more information please contact:

Geoff Owen

Director of Learning & Development

T: 01908 298 216

E: gro@greenwoods-solicitors.com

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• Legal Watch: Professional Indemnity

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Third Party (Rights against Insurers) Act 2010Comment: Four years after this legislation received royal

assent it has still to be implemented. The delay results from

a need to amend the act principally to extend its scope to

insured companies entering into administration without a

court order. These amendments will be made as soon as

parliamentary time permits, which does not appear to be

any time soon.

Court feesComment: For some years, it has been the government’s

policy to set court fees on the basis of full cost recovery.

However, it seems that until now the courts have been

operating at less than full cost recovery, a situation that it

proposes to remedy. It is seen as critical that the courts are

properly funded if they are to continue to provide access to

justice whilst contributing to what is viewed as the ongoing

development of a more efficient, modernised court service.

The parties to litigation can therefore look forward to even

steeper court fees. Insurers may wish to take this into

account when considering offers to settle claims before

they are issued by claimants.

Law reform (fraud)Comment: The Law Commission is considering whether or

not to address the issue of fraud in personal injury cases

(the alternative is to continue to leave this to the courts).

It is to be hoped that the commission will grasp the nettle

and recommend legislation to deprive fraudsters of even

the ‘legitimate’ element of any claim they may have, as

already applies in first party insurance claims. No doubt the

concern will be whether such a step would be in breach of

the claimant’s human rights.

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