It's been going the claimants way for some time. Despite Lord Woolf's aim to drive down the cost of litigation, the overall cost of settlement is going up. Insurance funds are already being stretched to meet four factors:

  • Higher future loss payments – rises of up to one third in damages for catastrophic injury and the possibility of a reduced discount rate.
  • NHS charges – which may be extended throughout the market

    Higher court fees to enable the civil legal system to be self financing

  • Compensation Recovery Unit payments
  • Enhanced interest and indemnity costs

    The cost of preparation and training for the Civil Procedure Rules. There are reports that costs awards on interlocutory applications have risen since the reforms were introduced by as much as 300%, that judges are being more generous on summary assessment and that guideline rates issued by the courts are enabling claimants to recover higher hourly rates than ever before.

    From April 1 2000 success fees and insurance premiums have been recoverable from the losing party. In practice recovery of success fees could mean claimant solicitors who already recover £140 – £150 per hour can expect £300 per hour.

    There are plans to review all litigation costs rather than introduce fixed fees for fast track. A Working Party may be set up – if there are funds – and enough pressure on the LCD.

    To avoid continuing to fund expensive and inefficient practice by claimant solicitors you need to lobby the LCD now for an overhaul of costs and to ensure that any review is based on figures from across the profession.

    It has been going the claimants' way for some time. Now is the time to redress the balance.

    Conditional fees – recovery of success fee uplifts and insurance premiums

    The key points to note are:

  • No legal aid for personal injury
  • A Conditional Fee Agreement (CFA) covers claimants' own solicitors' profit costs

    Disbursements and opponents' costs can only be protected by taking out insurance.

    The success fee and insurance premium can be recovered from an unsuccessful defendant where the CFA is entered into on or after April 1 2000.

    The claimant must notify the defendant of the existence of the CFA or insurance policy within seven days of the agreement and must notify the court when proceedings are commenced. Only the fact of the CFA need be notified, not the percentage.

    When there is a dispute, the Defendant can request a copy of the reasons given in the agreement for setting the percentage uplift. At present, if there are no proceedings there is no mechanism to find out but new rules are expected to change this.

    Major changes to civil procedure rules

    Appeals procedure takes on whole new look.

    Extensive changes – which were introduced on May 2 2000 – have now been made to the Practice Directions. Most significantly there is now an entirely new Rule (52) for Appeals.

    Those who appeal must have a real intention to do so since there are a number of hurdles to jump over to get the matter on for appeal and the old view let's give it another go since it's a rehearing and may be worth a punt will not survive. The main points include:

    You will now need permission for all appeals – ideally from the lower court but if not from the appeal court.

    There are standard limits for all appeals (14 days). Time will be of the essence – the notice, skeleton argument, official copy of transcript, sealed order with judges reasons and so on must be filed within 14 days of the lower courts' order – whether you appeal or merely seek leave to appeal.

    The appeal will not take the form of a complete rehearing but will be in the nature of a review of the decision under appeal. There will be no evidence other than that which was before the lower court which makes it more important to get it right first time.

    Appeals to the Court of Appeal will require the permission of the Court of Appeal - the big difference is that you can no longer get permission from a judge and permission will only be given on good public policy grounds.

    Transitional provisions provide that an appeal from an order or judgment made before May 2 is dealt with under the pre 2 May rules so for a while the old and new systems will run alongside each other.

    Fee changes have also been introduced. These include:

  • County Courts The Allocation Fee

    The cost of small claims has gone down as the £80 allocation fee ceases to apply to claims for money only, provided that the claim does not exceed £1,000. The new exemption applies regardless of the date of issue of the claim. Where the allocation fee has already become due prior to 25 April 2000 it must be paid.

  • Fees payable on issue of proceedings

    Overall the cost of claims will rise as a result of increases in the fees payable on commencement of proceedings in County Courts, the Claim Production Centre and the Supreme Courts.

    Human Rights impact on NHS

    The Human Rights Act will have wide ranging implications for the NHS and many actions that have been considered perfectly legal may become subject to regular court challenge.

    Section 6 of the Act is the liability section. It says that it is unlawful for a public authority to act in a way which is incompatible with a convention unless the primary legislation gives the public authority no choice. A public authority is likely to encompass Health Authorities and NHS Trusts.

    It is vitally important that those in the NHS with responsibility for legal issues, risk management and clinical governance familiarise themselves with the Act and carry out a comprehensive review of their procedures, policies and practices.

    This audit process will develop an awareness of the situations in which the actions or decisions of the authority may be called to account and identify any weaknesses in the systems of work.

    Once the Act is implemented, a wave of legal challenge is anticipated and the law will undergo a rapid process of evolution. Authorities will need to monitor the case law and constantly update their systems of work to ensure that procedures and decision making processes remain balanced.

    When carrying out any audit the key question to be asked is whether the work touches on any Convention rights. If it does, then the following questions need to be addressed:

  • Is there a victim?
  • Can the convention right concerned by interfered with legitimately?
  • Have you any choice in the matter?
  • Does law prescribe your action or inaction?
  • Is what you are doing necessary in a democratic society? Does it pursue a pressing social need, is it proportionate and are there relevant and sufficient reasons for it?

    The NHS will need to raise awareness and understanding in all its operational areas.

    Common sense by court of appeal

    Double damages calls rejected

    The Court of Appeals' decision not to double payments for pain and suffering damages was heartening for the insurance industry.

    Thankfully insurers' representations did not go unheard. The Law Commission attached too much importance to the survey it commissioned which was flawed in terms of questions asked and data collected.

    The judgment has been widely reported but, on reflection, the main points are:

  • No increases for awards below £10,000.
  • Tapered increases for awards between £10,000 and £150,000 of one per cent – 331/3%.
  • Awards for catastrophic injuries to be increased by up to one third.

    The JSB guidelines should be revised as soon as possible.

    Inflationary increases should continue to be made by reference to RPI and not GDP per capita or average earnings.

    Three per cent discount rate for future loss retained

    The Court of Appeal considered Warren v Northern General Hospital (again) together with Ouderhoven v Griffin Inns when it decided to make no change to the 3% discount rate used to calculate multipliers in personal injury claims. This was another encouraging judgement.

    The are unlikely to be an further changes to the rate until the Lord Chancellor has considered responses to the consultation paper which invites comments firstly on the rate of discount to apply when awarding lump sum damages for future loss and secondly on the merits of reviewable periodic payments as an alternative to lump sum payments.

  • Weightmans is co-ordinating a response to the discussion paper on behalf of insurers. You can email your views to mailto:laura.wilkin@weightmans.com The consultation paper can be found at www.open.gov.uk/lcd

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