legal watch - what's on the horizon - april 2014
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Plexus Law / Greenwoods NewsletterTRANSCRIPT
Legal WatchWhat’s on the horizonApril 2014
Events
Plexus and Greenwoods hold a series of events which are open to interested clients. See below for those being held in the next months:
MBIG Seminar | 22.05.14 | London
In This Issue:
• Cost budgeting and case management by the courts
• Fixed costs
• Hourly rates
• Damages-based agreements
• Discount rate
• Whiplash
• Insurance Contracts Bill
• Third Party (Rights against Insurers) Act 2010
• Court fees
• Law reform (fraud)
The horizon in dispute resolution is hazy but we bring you a
summary of what we see as the key developments that we
can look forward to in the near future.
Introduction
Cost budgeting and case management by the courtsComment: There has been great concern in both claimant
and defendant camps that the reforms of April 2013 have
seen justice between the parties and common sense take
second and third place to an over-prescriptive application
by the courts of the procedural rules. Practitioners have
been operating in a climate of fear in which even sensible
agreement between the parties has not been permitted. This
was causing a front-loading of costs, an excess of court
applications and, in some cases, an unexpected windfall to
a party where the other side fell foul of the court and had all
or part of its claim struck out.
We now hear that a degree of common sense has prevailed
and the rules are to be amended to permit parties to
agree time extensions of up to 28 days for serving certain
documents, without needing to make an application to the
court.
Few judges have shown any appetite for dealing with costs
budgeting in any detail. It is recognised that there has been
no consistency in the way this subject has been approached
by the courts. A number of judges have, however, adopted
a broad-brush approach to proportionality to reduce costs
budgets and effectively cap them. This has probably worked
to the benefit of defendants more than claimants.
With effect from 22 April, costs budgeting is to be extended
to virtually all multi-track cases with a value of up to £10m
and CPR3.15(1) will be amended so that we are likely to see
more costs management orders.
Fixed costsComment: Another indication from the government is that,
in due course, there will be a substantial increase in the
value of claims subject to fixed cost regimes, perhaps even
as high as £250,000.
Hourly ratesComment: The consultation on guideline hourly rates closed
in December 2013 and the Civil Justice Costs Committee
was due to report to the Master of the Rolls (as head of the
solicitors’ profession) by 31 March. The indications are that
it will be some time yet before we know the outcome.
Damages-based agreementsComment: These were legalised as part of the package of
reforms intended to replace CFAs where the defendant was
liable for the success fee. There has been little appetite
for DBAs but it seems likely that in the future there will be
reforms to permit hybrid agreements combining DBAs and
CFAs, which may be more popular.
Discount rateComment: It is official: there is no news on if, or when, any
change will occur.
WhiplashComment: The government is pressing ahead with its
reforms with a further announcement due before the
summer recess. The most recent suggestion is that the
cost of medical reports will be fixed. There is concern that
the proposed medical panels are open to abuse but the
government is insistent that they will be properly established
and policed.
Insurance Contracts BillComment: This bill is the commercial equivalent of the
Consumer Insurance (Disclosure and Representations) Act
2012. Consultation on the final wording of the Bill has been
limited and there are widespread concerns that the unless
some of the text is clarified there could be uncertainty and
thus disputes as to how the resulting legislation is to be
interpreted.
The information and opinions contained in this document are not intended to be a comprehensive study, nor to provide legal advice, and should not be relied on or treated as a substitute for specific advice concerning individual situations. This document speaks as of its date and does not reflect any changes in law or practice after that date. Plexus Law and Greenwoods Solicitors are trading names of Parabis Law LLP, a Limited Liability Partnership incorporated in England & Wales. Reg No: OC315763. Registered office: 8 Bedford Park, Croydon, Surrey CR0 2AP. Parabis Law LLP is authorised and regulated by the SRA.
www.plexuslaw.co.ukwww.greenwoods-solicitors.co.uk
Contact UsFor more information please contact:
Geoff Owen
Director of Learning & Development
T: 01908 298 216
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Third Party (Rights against Insurers) Act 2010Comment: Four years after this legislation received royal
assent it has still to be implemented. The delay results from
a need to amend the act principally to extend its scope to
insured companies entering into administration without a
court order. These amendments will be made as soon as
parliamentary time permits, which does not appear to be
any time soon.
Court feesComment: For some years, it has been the government’s
policy to set court fees on the basis of full cost recovery.
However, it seems that until now the courts have been
operating at less than full cost recovery, a situation that it
proposes to remedy. It is seen as critical that the courts are
properly funded if they are to continue to provide access to
justice whilst contributing to what is viewed as the ongoing
development of a more efficient, modernised court service.
The parties to litigation can therefore look forward to even
steeper court fees. Insurers may wish to take this into
account when considering offers to settle claims before
they are issued by claimants.
Law reform (fraud)Comment: The Law Commission is considering whether or
not to address the issue of fraud in personal injury cases
(the alternative is to continue to leave this to the courts).
It is to be hoped that the commission will grasp the nettle
and recommend legislation to deprive fraudsters of even
the ‘legitimate’ element of any claim they may have, as
already applies in first party insurance claims. No doubt the
concern will be whether such a step would be in breach of
the claimant’s human rights.
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