Fixed costs mean PI lawyers “need to embrace new mindset”

Wallis: Fixed costs extension will be a paradigm shift

Personal injury lawyers need to be able to switch between “adversarial and dispute resolution mindsets” to equip themselves for the future, the chair of a mediation service has argued.

Tim Wallis, chair of Trust Mediation, said the extension of fixed recoverable costs (FRCs) to claims worth up to £100,000 in October this year was a “paradigm shift” which would “create an entirely different focus for law firms’ business models”.

Mr Wallis said: “Accommodating both the adversarial and dispute resolution mindsets can indeed be intellectually demanding. I certainly found it a to be challenge when I was introduced to mediation.

“With training and experience, however, it is possible to develop the ability to effectively switch between the two mindsets.”

He went on: “Embracing both mindsets will equip you to adapt to the changing landscape of legal procedures and enable you to contribute to and critically assess the design of the various ADR [alternative dispute resolution] processes which will need to be integrated within the digital justice system.”

In his white paper ADR, ODR and digital justice: The resolution of personal injury and medical negligence claims now and in the future, Mr Wallis said it was “crucial to recognise” that adopting a dispute resolution focus did not mean abandoning the adversarial system.

Mediation “may be perceived as a less adversarial process”, but it only worked if advisers possessed the adversarial skills and experience necessary to advise clients on the potential outcomes of a trial and the pros and cons of proceeding with one.

“The power of mediation lies in the fact that a claim unresolved at mediation will inevitably head for trial.”

On the Official Injury Claims (OIC) portal, Mr Wallis said that from an ADR perspective the main problem was that it “passively” permitted the resolution of claims, and if the parties could not settle, the only dispute resolution tool was the court.

He said that a joint venture between the tech firm Nuvalaw and Trust Mediation’s sister company Trust Arbitration, launched in 2021 as a pilot scheme, showed that OIC and fast-track claims could be resolved by an “agreed, quality assured, arbitration process”, within a period of days not months.

Mr Wallis said Trust Mediation was chosen with CEDR in 2016 by what was then the NHS Litigation Authority to run its mediation scheme.

Since the scheme started the following year, medical negligence had replaced personal injury as Trust Mediation’s leading type of claim, reaching the landmark of 1,000 NHS mediations in January this year.

Mr Wallis said that, in the early days of medical negligence mediation, many claims were mediated close to trial, but there had been a “sea change” and last year over 50% of Trust Mediation mediations took place before commencement of proceedings.

This meant many claimants received damages “much earlier than would otherwise have been the case”, eliminating a great deal of risk and reducing costs.

“The settlement rate of claims which mediate before proceedings was the same as the rate for those mediated afterwards.”

On the extension of fixed recoverable costs, Mr Wallis said: “This policy change is a paradigm shift. The move away from the hourly rate will create an entirely different focus for law firms’ business models.

“The duty to secure the best result for the client does, of course, remain but profitability will depend upon lawyers’ skill and experience in resolving claims efficiently and early.”

Given the “ongoing evolution in legal procedures”, Mr Wallis predicted that the “historical reluctance” to embrace ADR in some areas was likely to give way to “a more balanced appreciation” of both adversarial and collaborative approaches.

“A preference for litigation or mediation isn’t a binary question of good or bad; it’s about choosing the most effective approach for the particular circumstances and people in each case.”

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