Fixed recoverable costs judicial review

APIL has issued judicial review (JR) proceedings against the Lord Chancellor challenging several aspects of new rules to extend fixed recoverable costs in personal injury cases.

Last month the association welcomed a Government consultation which suggests that some important aspects of the rules may be conceded, although regulations will still be introduced on 1 October as planned, even though the consultation does not close until 8 September.

There are four key grounds to the association’s challenge, all of which represent significant impediments to access to justice for injured people. The first concerns clinical negligence claims, including failure properly to consult on the new rules and a lack of clarity about when fixed costs might be applied.

The rules suggest that clinical negligence cases valued between £25,000 and £100,000 should be moved to the new intermediate track if ‘both breach of duty and causation have been admitted.’ But it is not specified at what stage of the case those admissions must be made. If they are not made until late in the proceedings, a solicitor will have had to undertake a significant amount of work on the case, only to then find that fixed costs are applied which do not cover the costs of the work undertaken.

This creates a very real risk that solicitors may not take on clinical negligence cases of this value.

APIL is also challenging provisions relating to vulnerable people, which will mean that solicitors will have to cover part of the additional costs naturally incurred when representing vulnerable people, despite the fact that these costs are now recoverable following the Court of Appeal’s decision in Santiago v MIB last month.

There is also a concern that a judge will only make a decision about a person’s vulnerability later in the case, after the additional costs will have been incurred.

APIL fears that the Government has underestimated the impact of the new rules on vulnerable people and that the provisions will interfere with their access to the courts.

A further challenge relates to the unlawful exclusion from the new regime of fixed recoverable costs for representation at inquests, and for restoring companies to the Companies Register. While the Government appears to have conceded that these rules need to change, they have not been changed or suspended from the regulations to be introduced on 1 October.

Finally the association has challenged an apparent reversal of Court of Appeal case law, without consultation, which allows parties to contract out of fixed costs when there is a dispute in settlement agreements, in favour of agreeing that costs will be subject to detailed assessment. This would be a radical infringement of freedom of contract.

The JR has been issued within three months of the date on which the rules were published, as required by limitation rules. Given that the Government later published a consultation which relates in part to APIL’s claim, the association has requested, and the Government has agreed, that the JR will be stayed until three weeks after the Government responds to the consultation. After the consultation response, APIL can apply to amend its grounds for issuing proceedings.

APIL will continue to attempt to engage with the Ministry of Justice and try to help address the serious concerns and consequences of what will happen when the new rules come into force on 1 October.