Litigation focus | New rules, new behaviour

With costs regularly exceeding damages in lower value personal injury cases and often being the second largest head of claim in catastrophic injury claims, something needed to happen. Together the Legal Services Act and LASPO have created conditions which will change personal injury litigation for everyone as never before.

Market consolidation among law firms which has been happening for defendant firms for more than ten years will strike rapidly for claimant firms, in as little as ?two years, such is the scale of change we're now seeing.

The much-debated ban on referral fees ?has been a sideshow. Claims had become ?a tradeable commodity and simply changing the currency in which they were traded has not diminished their value. The introduction of fixed fees for claims up to £25,000 inside and outside the portal, at much lower levels, will make the real difference, driving efficiencies not needed under the old regime and in turn accelerating claimant firm consolidation.

Price worth paying

Abolition of the defendant paying the claimant's success fee and ATE premium will save the insurance industry considerable sums. The increase in general damages by 10 per cent and additional penalties imposed by Part 36 for failure to beat a claimant's offer, together with qualified one-way costs shifting (QOCS) are seen by most as a price worth paying.

Those outside the industry would say that restoring the claimant's financial interest in their litigation is sensible. Cases now have to be dealt with proportionately. It is impossible, currently, to tell how this will be developed by the courts and what effect it will have on the new Form H.

Despite early teething problems, costs budgeting has been a good move. Clients want it (whether claimant or defendant). It enables both sides to know more precisely the likely level of legal costs payable at different stages in proceedings, giving a more complete picture when trying to settle a claim. My fear, though, is that the new regime encourages front-loading by claimant solicitors.

Courts will not be able to deal with work carried out before the issue of proceedings during costs management hearings, although they may reflect this in the work to be allowed thereafter. A disproportionate amount of time could be spent dealing with the issues of costs - costs budgeting at the beginning and then assessment of work done before the issue of proceedings at the end. I was relieved to hear the Honourable Mr Justice Ramsey state his awareness of this potential issue. It must be addressed.

Tactical weapon

Front-loading may become a tactical weapon of the claimant's team because of CPR 3.9. This rule has had the most immediate impact on litigation since 1 April. While the case law may be, to an extent, difficult to reconcile, the overall message is clear:

Rule 1: obey the rules.

Rule 2: see Rule 1 above.

Rule 3: if you are brave enough to ignore Rules 1 and 2, apply to the court before you break them, not afterwards.

Given the difficulties that can be encountered in tracing witnesses and obtaining witness statements, obtaining medical reports within a sensible timescale and getting disclosure, particularly in employer's liability and public liability actions, why wouldn't you do all this upfront if you acted for the claimant to put significant pressure on the defendant later on?

Invariably advantageous

I have been disappointed by the effect of the role of experts in serious/catastrophic claims following the Woolf Reforms. The days of hired guns may have passed but why is it that invariably the claimant's medical experts are more advantageous to the claimant's case but vice versa for the defendant's experts?

The system of having experts for each side naturally allows this to occur. In the catastrophic injury claims in which I specialise, we know there are separate lists for claimant's and defendant's experts. It is extremely rare for experts to be instructed by the other camp. The new rules help.

The draft directions order obliges us to supply a costs estimate for instructing our chosen expert and state the issues upon which they are to be instructed. The courts must now actively case-manage this to ensure experts address key issues at significantly reduced costs.

It will be another year yet before we really see how behaviour is going to change, if we see any change at all, and how the judiciary enforces the rules.

And there's more to come. We have the introduction of increased limits and inclusion of EL and PL to the portal on 31 July, the MoJ response to the discount rate consultation and the small claims track limit and investigation of the hourly rate by the Civil Justice Council costs committee. These developments should keep us busy for a few years yet.