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Fixed costs for litigation – a step too far

James Mansell asks whether the new fixed costs regime could make it harder for defendants to detect and challenge fraudulent and exaggerated claims.

20 August 2013

Litigation is by nature contentious and often hostile. No two cases are the same and where the parties are disputing liability, causation and quantum can become complex. The post-Jackson rule changes are designed to control a growing compensation culture and, in the case of motor claims, ultimately make insurance premiums more affordable. Ensuring lawyers keep to court deadlines, curtailing relief from sanctions, and promoting proportionality have been sensible steps to reducing costs.

The new SI, Civil Procedure (Amendment No.6) Rules 2013 has introduced a fixed costs regime for all cases where letters of claim / claim notification forms are served after 31 July 2013 for cases with a value up to £25,000.

At first glance the rules favour the insurers but it is likely they will soon become an annoyance to defendants. First, claimants will have an interest in valuing their claims above £25,000. This will encourage inflated claims, including every imaginable...

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