Litigation claims in cases of professional negligence and breaches of contract are among the areas set to be governed by the new fixed recoverable costs regime which is set to come into effect from October 1^st this year.

The new changes to the Civil Procedure Rules mean people pursuing civil claims could be left out of pocket or even find it difficult altogether to bring their case to court as claims of up to £100,000 are less commercially attractive for legal firms to pursue.

Each case will be judged on its complexity, with the more complex cases coming with higher costs and in turn having a significant impact on both recoverable and payable costs.

So even if they are successful the client could still be left with little or no money.

Proceedings issued before October 1^st will not be affected by the changes.

Legal firms will look at whether cases are even worth taking on.

Fixed costs have been in existence for a long time but are creeping into more areas of the law.

After these changes legal teams will have to look at the complexity of each case, and how far into the proceedings any dispute is settled, which will then calculate how much a claimant is entitled to recover for their legal costs.

Some firms may only take on a cast iron case – although you could argue nothing in litigation is ever cast iron – but if there is a good case, they could take it on as a no win no fee and they would then take a percentage of the money awarded. However, most firms, we imagine, will continue to charge clients on a time spent basis as usual, which will mean the clients are out of pocket on costs on conclusion, even if they’re successful. Proportionality is key.

Litigation is highly risky. It can depend on the judge on the day, and how well your client performs whilst giving evidence. . You could produce a brilliant witness statement but then your client simply does not perform well on the stand on cross-examination under pressure. These are risk factors which prevents any law firm from giving a cast iron guarantee on winning a legal case and reduces the number of solicitors who are willing to take on cases on a no win no fee basis.

With a steep rise in the number of civil disputes reaching a court room over the past five years, we reiterate the importance of the parties being able to demonstrate their efforts in attempting to resolve their differences before issuing proceedings.

People have become far more litigious, especially in the last five years, and this is not looked upon favourably by a judge. We would always advise people with a dispute to speak to the other party with a view to resolving their differences, or at least coming to some arrangement, before issuing civil proceedings, which could include mediation.

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The small claims limit has increased from £1,000.00 to £5,000.00 in all road traffic accident cases from 31^st May 2021.  This means save for a very notional fixed sum and court fee, even if successful Claimant’s are unable to recover legal costs.

As a result, many Claimants Solicitors firms simply can no longer offer ‘no win, no fee’ arrangements.

This means that claimants will often be forced to represent themselves.  The process may seems daunting so sadly many will decide  ‘not to bother’ which in our view, seems entirely unfair.  Claimant’s Solicitors did lobby against this, sadly unsuccessfully, in our view depriving thousands of having the means to claim compensation.

There are however a number of exceptions such as:

• The claimant was a child or protected party or a “vulnerable road user”, which means, motor cyclists, cyclists, pedestrians, horse riders and those using mobility scooters;
• The claimant is a personal representative of a deceased person;
• The defendant’s vehicle was registered outside the United Kingdom.

Whilst the changes were intended to reduce the number of fraudulent claims, it sadly will leave those who otherwise would have sought compensation having suffered an injury through no fault of their own, deciding not to.

Alongside the changes to the small claims limits, the Civil Liability Act 2018 has also now received Royal Assent where the Lord Chancellor will have the power to set limits on what damages a claimant would receive for a whiplash injury. This is likely to see significantly lower awards being made than those available at present.

In addition, The Government has confirmed that it intends to increase the small claims track limit for personal injury arising out of employers’ and public liability claims from £1,000 to £1,500 from April 2022.  Whilst this is likely not to see such an significant effect on claimants as the reforms on road traffic claims, it is concerning in our view that claimants are being deterred access to justice.

Need legal advice? Contact us at enquiries@bttj.com

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