Government announces reduction in RTA fees will go ahead in April

Litigation Futures have today published the following article:

The government is to press ahead with the new RTA portal in April with basic fees unchanged from the level it consulted on – £500.

There will be a 30-day delay, with the revised portal taking effect from the end of April, while extension to cases worth £25,000, and to employer’s and public liability cases will happen at the end of July at the fee levels previously proposed.

The new fixed recoverable costs (FRCs) regime for cases falling out of the extended protocols will also commence in tandem from the end of July.

In its long-awaited decision, the government said it is “reasonable and proportionate to consider referral fees as relevant to the costs and to propose adjustment to FRCs in the light of the forthcoming referral fee ban in April 2013”.

This is one of the arguments that will be tested in the Association of Personal Injury Lawyers and Motor Accident Solicitors Society’s judicial review of the proposals, which is due to be heard on Friday.

The government rejected the view of claimants that the changes will “result in limiting access to justice and bring about other undesirable behavioural changes, since lawyers will still be willing to take cases on for these costs”.

There were some nuances, however. The government accepted that for cases above £10,000, the cost of obtaining an opinion on quantum from counsel or a specialist solicitor should be recoverable as a fixed cost where it can be justified. The “greater complexity” of EL/PL cases and the fact that it is a new regime “merits higher FRCs for these than for RTA cases”, it added.

The proposed FRC for fast-track cases were considered to be a “sound basis on which to proceed” given the absence of “solid evidence to the contrary”. The only exception is employment law disease claims, which should fall out into the current guideline hourly rate system pending further work by the Civil Procedure Rule Committee.

While acknowledging more broadly the difficulty in obtaining “comprehensive and representative data”, the government said it is prepared to “review and assess the effectiveness of the scheme should evidence be provided to demonstrate that this is necessary” – but would not commit to a formal review in a year’s time.

It continued: “For similar reasons the government is not convinced by the argument set out by some respondents, including the Civil Justice Council, that the government should wait to see how the range of civil justice reforms currently underway have bedded in, or until further analysis has been completed before proceeding with any reduction in FRCs or extension of the RTA scheme.

“The government is not clear what further data or evidence would be available in the near future which would make a sufficiently material difference to the current proposals to justify delaying their implementation.

Questions about how the new regime would interact with the separate proposals on reducing the number and cost of whiplash claims will be addressed in response to that consultation.

Justice secretary Chris Grayling said: “I want to see claims handled quickly and efficiently so accident victims with genuine cases can be compensated as soon as possible.

“That is why following consultation and careful consideration I have confirmed that changes to the digital system used for settling uncontested road accident claims will take place this year…

“These changes, along with our wider reforms, are intended to bring more balance to the system, make lawyers’ costs proportionate and in turn create an environment where insurers can pass on savings to their customers through lower premiums.”

View the article online here.

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