Fixed costs and more: a fix that doesn’t fix what needs fixing – part 2

Posted by Matthew Best, senior underwriting manager at Legal Futures Associate Temple Legal Protection

Best: Non-fault should be a non-starter

I wrote the first part of this blog back in June. There is still no word from the government as to if, why and how fixed recoverable costs (FRC) are going to happen. The October deadline for implementation was scrapped and we are now looking at April 2023.

In a recent survey we conducted amongst claimant and defendant representatives, over 40% said that FRC can work. Interestingly, 25% of those were from a claimant background. When asked for the reasons for their answer, it simply came down to cost. If the figures are set reasonably, there is no reason it cannot work.

When asked whether the participant’s law firm would still run FRC cases, around half said no, with 35% of those already stopping marketing for such claims. That percentage, although foreseeable, really does show that the door to justice is being forced shut. Where will clients with legitimate cases go to get answers?

One article published recently suggested that law firms might be forced to deduct 50% from damages to survive the FRC extension.

Whether that was aimed at personal injury or clinical negligence matters is, to me, irrelevant. The reasoning must be the same. Someone has to cover the solicitors’ shortfall in respect of unrecovered profit costs and the irrecoverable success fee – don’t they?

Deducting more still from claimant damages will be even more of a minefield than it is currently. It could lead to further disputes and arguments of the kind that have repeatedly appeared in the courts during recent months.

Clients can also try to claim back deductions – on the basis they did not consent to such a large amount being taken by their advisers.

Mediation in clinical negligence cases

Only 25% of participants said that a defendant engages with mediation. Temple actively encourages mediation by building incentives into our after-the-event insurance cover as standard.

Interestingly, 40% of you knew that we covered mediation costs. This has helped to build constructive dialogues to keep the duration of cases down and, with that, costs – as long as there is engagement from the defendants.

There is a simple observation to make here – more defendants need to engage more with mediation.

Non-fault systems – change is needed, but not this

This non-thought-through idea really should be a non-starter. At the same time, in the survey, nearly 45% said the current system needed an overhaul.

This is quite a worrying statistic at first sight, but respondents gave the same blueprint for reform – engagement and abiding by the ethos of early admissions and rehabilitation with claimant/defendant collaboration.

All we can do is sit tight and wait for whatever ‘shady’ system is implemented. But please remember that, here at Temple, we remain fully committed to keeping costs down.


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