By Sean Linley, Senior Costs Draftsman 
 
The Government’s long awaited report into Fixed Recoverable Costs for Clinical Negligence claims with a value of up to £25,000.00 has finally been published. The report spans 100 pages.  
 
We seek to summarise the key issues which arise and what it means for Clinical Negligence practitioners. 
 
The government’s response is put forward on the basis of only 98 responses to the original consultation. Serious questions have to be asked as to the scope of reforms based on such limited data sets. Broadly Claimant respondents were not in favour whilst the majority of Defendant respondents agreed with the proposals. 
 
To reiterate the transitional provisions will see these fixed costs apply to all clinical negligence claims (save for the specified exemptions) which settle between £1,501.00 to £25,000.00 and where no notification of the claim has been given pre the implementation date. This is currently set to be 6 April 2024. Notification is said to be a protocol compliant Letter of Notification or Letter of Claim. This is potentially significant as if implementation is 6 April 2024 then it could have the potential to apply to live claims. 
 
There is also a disbursement consultation which is open until 27 October. The same is detailed in the article but the proposals are the most restrictive disbursement regime we have seen in the context of fixed recoverable costs. It includes no allowance for Counsel fees pre-issue (save for approval advice and approval hearings). The only recoverable disbursements otherwise will be expert reports, the recoverable element of the ATE premium, court fees where limitation is in issue only or where they relate to approval proceedings. No other disbursements will be recoverable. More detail is in the section about disbursements below. 
 
Speed-Read 
 
For those wanting a speed read the key points are as follows: 
 
1. Fixed Costs for Clinical Negligence claims with a value of up to £25,000.00 (i.e. Fast Track) is set to be implemented on 6 April 2024. This includes fatal accident claims (save for still birth or neonatal death claims). 
 
2. They will apply to claims with a settlement or judgment value of £1,501.00 to £25,000.00 (inclusive). Note the deliberate wording. Application is not tied to the claim value. The onus is on Claimants to not overvalue a claim. 
 
3. It will apply to all applicable claims where the date of notification of the claim falls on or after the date when the new rules come into force (currently 6 April 2024). This should be a PAP compliant Letter of Notification or Letter of Claim. 
 
4. It will only apply pre-issue. Post-issue the relevant costs regime will apply depending upon allocation and, if applicable, assignment. If a clinical negligence claim settles between £1,501 to £25,000 then the pre-issue LVCD fixed costs will apply unless it is an exempted case. If the claim settles above the upper limit the costs to be applied will be the relevant track (i.e. Intermediate or Multi-Track). 
 
5. Where Defendant does not reply to a Letter of Claim within six months then the claim falls out of the LVCD portal and the costs relevant to the applicable track apply throughout. 
 
6. Claimants will be required to make an initial offer of settlement at the same time of the Letter of Claim. 
 
7. Disclosure of core medical records, up to two witness statements and expert evidence all required with the Letter of Claim. 
 
8. Mandatory stocktake will be required before issue of proceedings. The parties are also encouraged to undertaken Neutral (non-binding) Evaluation. The Defendant will be responsible for the cost of the evaluator in full. 
 
9. Where Claimant proceeds to trial after Neutral Evaluation, it must obtain a judgment which is 20% greater than the recommended settlement amount or the fixed recoverable costs will be reduced by 50%. 
 
10. Within the Fast Track, the reforms will introduce a light and standard track. Fixed costs will vary depending upon the sub-track. 
 
11. Only claims where there is an admission of breach of duty, and an admission that the breach caused loss, including injury are suitable for the light track within 8 weeks of receipt of the Letter of Claim are suitable for the light track. If there is a partial admission the claim would transfer to the standard track. 
 
12. Where a claim moves from the light track to standard track there will be no abortive costs for the Claimant, save for 5% of light track stage one costs only where Defendant does not respond to the Letter of Claim within 8 weeks of receipt. 
 
13. A standard track claim can be transferred to the light track where Defendant provides an admission of breach of duty and that the breach caused loss, including injury within 8 weeks of receipt of the Letter of Claim. Costs will be restricted to light track throughout. 
 
14. On the light track, Defendants will have to make an interim payment of light track stage one costs within 28 days of receipt of the light track Letter of Response. 
 
15. If a claim is exempt then Claimants must explain why in both the Letter of Claim and Particulars of Claim. 
 
16. Claimants will be expected to obtain and disclose condition & prognosis evidence with the Letter of Claim. 
 
17. Where limitation is raised then the claim will exit the LVCD protocol. 
 
18. Claims involving children or protected parties will include a bolt on amount of £1,800.00. Notably claims under the MoJ reforms exempt Protected Parties. 
 
19. Where protective proceedings are issued for limitation purposes, only the court fee will be recoverable. No costs relating to issuing or seeking an order to stay the claim will be allowed. 
 
20. On the standard track, if the Defendant fails to respond to the Letter of Claim within 6 months, it will fall out of the LVCD protocol. 
 
21. The report implies that the Intermediate Track can only apply to clinical negligence cases where there are full admissions of breach of duty & causation and only quantum is in dispute. This remains not clarified in October’s Fixed Costs reforms. 
 
22. Where Defendant fails to meet a deadline then the Claimant’s damages will be uplifted by 50%. If a Claimant misses a deadline the recoverable fixed costs will be reduced by 50%. 
 
23. There is an open admission that small firms will be disproportionately impacted by these reforms. 
 
24. There will be a further consultation focusing on the specific issue of disbursements under the proposed LDFRC scheme. 
 
In addition, the following claims are exempt: 
 
- Claims where allegations of negligence require breach of duty & causation evidence from more than 3 medical experts (an increase on the consultation of 2 experts). 
- Claims against 2 or more defendants, where the allegations of negligence against each defendant are materially different 
- Claims which arise from still birth or neonatal death, including claims made by secondary victims. 
- Claims where limitation is raised by the Defendant as an issue. 
- Litigants in Person are exempt. 
 
On Disbursements, the Consulation proposes as follows: 
 
The headlines: 
 
- Expert Report fees will remain recoverable but subject to reasonableness and proportionality. 
 
- Recoverable elements of ATE premium to remain recoverable. 
 
- No recoverability of Counsel fees pre-issue. 
 
- Court fees recoverable where limitation in issue only. 
 
- Counsel fees and court fees recoverable for claims involving Protected Parties and children. 
 
- No other Disbursements will be allowed on basis that fixed costs proposed "in the full consultation response are sufficient to cover such costs". So no allowance for medical record pagination, medical records etc. 
 
Why do we need fixed costs for lower damages Clinical Negligence? 
 
The government state that the need for fixed costs in these cases is ensure NHS resources are used in the best possible way. They state that money spent on clinical negligence claims could be used to support improvements in quality and safety. 
 
The government do not hold back. They state that “claimant legal costs have risen more […] than other claims and are often disproportionate to the value of those claims”. Firstly, this ignores that Defendant legal spend has increased. Secondly it ignores that there are other factors relevant to proportionality than value. There is a lot of nuance and the government’s statement lacks it. 
 
The government echoes Sir Rupert Jackson’s comments that they want to deliver “access to justice at proportionate cost”. Clearly this is a complex issue as there is still a cost and if that cost is not reached then it puts access to justice at risk. 
 
In short the determination for fixed costs in these claims is “to control rising clinical negligence costs for the NHS”. Some would say that patient safety would be a better way to control this. The Court expects that 75% of applicable claims will settle under the protocol. 
 
How will it work and what will it apply to? 
 
It is proposed to create a new Pre-Action Protocol for the Resolution of (low value) Clinical Disputes” (LVCD Protocol). It will apply to clinical negligence claims with a value at settlement or judgment from £1,501 to £25,000.00 (inclusive). Claims with a settlement or judgment value of £1,500.00 or less will, in principle, be subject to the Small Claims Track. There is deliberate wording here to refer to the end value as opposed to the claim value. 
 
Significantly the intended transitional provision will see it apply to all applicable claims where the date of notification of the claim falls on or after the date the rules come into force. This is proposed to be 6 April 2024. Theoretically this could capture some live cases now. The government response states that notification should be in the form of a Pre-Action Protocol compliant Letter of Notification or Letter of Claim. 
 
It will only apply pre-issue, where a claim goes on to be litigated then the claim may transfer to a different fixed costs scheme (as per October’s reforms) or even potentially come out of fixed costs completely if there was a Multi-Track allocation. 
 
For clarity, the LVCD protocol costs will apply up to the point the claim form is issued or where a stay of proceedings is lifted by the court where proceedings were issued protectively because of limitation. This is going to have the potential to lead to some very complex calculations and permutations between the different fixed costs schemes. 
 
It should be stressed that a claim with a value of up to £25,000.00 could be allocated to the Intermediate Track (different fixed costs scheme) or the Multi-Track depending upon the applicable Part 26 factors. A Multi-Track allocation would bring a claim out of fixed costs. 
 
Some Clinical Negligence claims with a value of £25,001.00 to £100,000.00 will be captured under the separate Ministry of Justice reforms, specifically those where there are admissions of breach of duty & causation and they are allocated to the Intermediate Track. 
 
There are issues still to be clarified around when the Intermediate Track kicks in, namely is it full or partial admissions of breach of duty and causation. The government’s response to the lower damages cases may hint at an answer. They refer to Sir Rupert Jackson’s FRC report and state for cases between £25,001-£100,000 these would be subject to fixed costs where “breach of duty of care and causation and only quantum of damages issues remained”. This implies that only fully admitted clinical negligence cases will be suitable for the Intermediate Track. 
 
What are the fixed recoverable costs? 
 
The Fixed Recoverable costs are as follows: 
In addition there will be a bolt on of £1,800.00 for cases involving Protected Parties or Children. 
 
So the maximum recoverable amount for a non-Protected Party/children standard track case would be £14,500.00. 
 
For a light track case the maximum amount would be £8,375.00. What can be gleamed is that the difference between light and standard track costs can be sizeable.  
 
Notably absent from the report is whether the fixed costs sums are inclusive or exclusive of VAT. The other fixed costs regimes are exclusive of VAT so it is anticipated these sums will be also but without confirmation it’s impossible to say for certain. 
 
Scenarios 
 
Where a claim exits the LVCD portal because the Defendant has not responded to the Letter of Claim within 6 months then the applicable costs are those which apply to the applicable track. If this happened and the claim settled pre-issue and the court held the case was suitable for the Fast Track then the maximum a Claimant can recover on fast track is £6,350.00. This could be lower than the costs on the LVCD scheme. This cannot possibly be right yet the government’s report sets out this scenario. 
 
The other interesting scenario is where the claim is an Intermediate Track claim. The staging here applies from the outset up to the service of the Defence. The reforms envisage where cases are issued that the applicable fixed costs apply for the appropriate track. So what costs does a party get post-issue where the Intermediate Track is the applicable track? Do they get the LCVD costs plus full S1 costs or are the S1 costs to be apportioned? The government state they will seek to address this issue pre-implementation but there are no answers yet. 
 
And again even Intermediate Track throws up another spanner. For a claim settling at the LCVD upper limit of £25,000.00 on the Intermediate Track for pre-action you’d get £2,350.00 on Complexity Band 1, on Complexity Band 2 you’d get £6,500.00, on Complexity Band 3 you’d get £7,900.00 whilst on Complexity Band 4 you’ll get £11,300.00. Bearing in mind these figures cover work up to the date of service of the Defence, under the LCVD protocol you’d get up to £8,375.00 on light track and £14,500.00 on the standard track for the equivalent claim.  
 
So to go back to how you deal with the IT post-issue costs, will the government allow anything at all if the costs are lower on all of the Intermediate Track complexity bands? The arithmetic makes no sense. 
 
 
Tied to settlement or judgment value and NOT claim value 
 
The government is pressing ahead with plans so that all Clinical Negligence claims that settle or have a judgment value of between £1,501 to £25,000.00, irrespective of the claim valuation will be subject to the fixed costs under the LDFRC scheme. 
 
This is significant. The government state that ”if a claim is overvalued at the outset but subsequently settles in the £1,501-£25,000 range it will be subject to costs under the LDFRC scheme, whether or not the process set out in the LVCD pre-action protocol has been followed for that claim.” 
 
This will inevitably lead to satellite litigation around whether or not a claim was reasonably valued and puts significant pressure on Claimant representatives to be able to accurately value a claim at the outset. Make no bones about it, the onus is on Claimants to value a claim accurately. 
 
The government wrongly state that this approaches follows other FRC schemes. This is incorrect. Where a claim is reasonably valued over the applicable upper limits on existing FRC schemes then the costs fall outside of fixed costs, irrespective of the claim or settlement value. 
 
There is also notably, no clarification as to what happens where there is contributory negligence. Is the settlement or judgment value the net or gross amount? Clearly this is important. The October reforms do not address this issue at all so will the LDFRC? 
 
Theoretically an issued claim that was valued over £25,000.00 could see pre-issue costs restricted to LDFRC instead of the applicable fixed costs. More satellite litigation. 
 
Exclusions 
 
There are exclusions to the LDFRC scheme. Where a claim is excluded then they will not follow the LVCD protocol. Instead they will follow the existing Pre-Action Protocol. Claimants will be required to set out why a claim is exempt in both their Letter of Claim and in the Particulars of Claim. 
 
The exclusions are as follows: 
 
- Claims where allegations of negligence require breach of duty & causation evidence from more than 3 medical experts. 
- Claims against 2 or more defendants, where the allegations of negligence against each defendant are materially different 
- Claims which arise from still birth or neonatal death, including claims made by secondary victims. 
- Claims where limitation is raised by the Defendant as an issue. 
- Litigants in Person are exempt. 
 
What is notable is that the expert exemption relates to liability only and actually sees the number of experts increased from the consultation which was previously 2 experts. 
 
The multiple defendant exemption is much stricter than the October reforms. 
 
There are no exemptions for fatal claims. Protected parties and children are also not exempt. 
 
Children and Protected Parties 
 
Children and Protected Parties are not exempt, instead a bolt-on of £1,800.00 will be allowed in addition to the fixed costs. 
 
This does not sit with the MoJ’s October reforms which exempt Protected Parties completely from fixed costs. 
 
So under these rules a Protected Party could be restricted to fixed costs in the pre-issue stage but cannot be subject to fixed costs post-issue. 
 
There will be real concerns over the impact on access to justice to claims involving children and Protected Parties. 
 
The government is going to consult on the mechanism for recovering disbursements in addition to the bolt-on. Presently it’s unclear if additional essential disbursements would be allowed. Patently in light of the Court of Appeal decision in Santiago provision must be allowed to ensure access to justice. 
 
If this is not sufficiently altered then expect these provisions to be challenged. 
 
The LVCD Protocol 
 
The new protocol will begin with a Letter of Claim. It will end when 28 days have passed following neutral evaluation, the claim has settled, the claim has been discontinued, the parties agree not to proceed with a neutral evaluation or the Defendant does not agree to neutral evaluation. 
 
If limitation is raised or the Defendant fails to respond to the standard track Letter of Claim within 6-months then the claim exits the LVCD. 
 
Standard & Light Tracks 
 
The reforms will see the introduction of standard and light tracks (though the wording may be changed). This carries through from the original consultation. The applicable fixed costs will vary depending upon the track. Given this is a pre-issue procedure then it could well give rise to satellite litigation where the parties disagree as to the appropriate track. 
 
It is for Claimants to determine which is the most appropriate track. The government believe it will apply to around 25% of applicable claims. 
 
The light track will apply if: 
 
- Parties agree no liability expert evidence is required. 
- There is a binding admission of breach of duty and it is accepted the breach resulted in loss, including injury. 
- There is a ‘never event’. 
- There is a Serious Incident Report which identifies care below a reasonable standard. 
- The facts indicate that loss, including injury, could not have been caused by any other reason other than negligence. 
- There has been an inquest and the Coroner has determined either that care amount to neglect or that death would not have occurred but for the identified neglect. 
 
Claims will be confirmed on the light track at the point liability is admitted by the Defendant. This admission must be made within 8 weeks of receipt of the Letter of Claim. 
 
Partial admissions would mean a claim went on the standard track 
 
Where a claim moves from the light track to standard track there will be no abortive costs for the Claimant. This will occur where a Defendant responds to the Letter of Claim within 8 weeks but then does not provide an admission of breach of duty, and an admission that the breach caused loss. The government state that the higher recoverable costs on the standard track will compensate Claimants. The only exception is where the Defendant fails to respond within 8 weeks. In these scenarios the Claimant will get 5% of light track stage one costs on top of standard track costs. 
 
For clarity, where a claim starts on the Light Track and falls out of it, it will then restart on the standard track. 
 
In addition, where a claim starts on the standard track, if the Defendant makes admissions of breach of duty, and an admission that the breach caused loss within 8 weeks of receipt of the Letter of Claim then the claim will be transferred to the light track and only light track costs will be recoverable. 
 
On the Light Track Claimants will be entitled to an interim payment within 28 days of receipt of the light track Letter of Response equivalent to the light track stage one costs. 
 
Also on the Light Track where expert evidence is needed then where possible, the evidence should be limited to a single report by an expert jointly instructed. 
 
Standard Track Process 
 
The standard track process is as follows: 
 
1. FRC letter of claim and evidence bundle to be sent by the Claimant to the Defendant. An initial offer of settlement to be sent at the same time. 
 
2. Defendant response within 6 months (if within 8 weeks liability is admitted claim transfers to light track, if defendant fails to respond within 6 months it drops of the LDFRC scheme). 
 
3. Claimant has 6 weeks to reply (or can proceed to mandatory stocktake, or accept defendant’s offer). 
 
4. Mandatory stocktake and discussion must take place if the claim cannot be settled after Defendant response or Claimant reply. If there is no Claimant reply, stocktake should be within 4 weeks. 
 
5. A neutral (but not binding) evaluation must be held (if agreed between the parties) within 4 weeks if the claim is not settled at the mandatory stocktake. 
 
6. Post-evaluation offer period: a period of 28 days from the neutral evaluation outcome where parties are encouraged to make further offers of settlement. 
 
New template Letter of Claims will be included in the protocol but their use will not be mandatory. 
 
The standard track letter of claim must include a detailed breakdown of the value of the claim setting out general damages and details of any pecuniary losses supported by a statement of truth. The Letter of Claim must be accompanied by an index of the Claimant’s medical records with a copy of the core records which are to be collated, sorted and paginated by the claimant. Any breach of duty and condition & prognosis expert evidence, up to 2 witness statements and an offer to settle the claim. 
 
There is no formal restriction on the length of expert reports or witness statements but their length and detail should be proportionate to the claim. 
 
Light Track Process 
 
The Light Track process is set out as follows: 
 
1. FRC letter of claim sent with initial offer made on same date. 
 
2. Defendant must respond within 8 weeks admitting liability. If liability is not admitted claim restarts in the standard track. If no response in 8 weeks, claim transfers to standard track and additional 5% of light track stage one costs are recoverable. 
 
3. Mandatory stocktake to take place within 4 weeks. If further evidence is required then points 4-6 apply. 
 
4. Within 2 weeks of the stocktake, expert should be instructed. 
 
5. If no claimant assessment is required, joint expert should provide report within 8 weeks of instruction. If assessment is required then report should be provided within 12 weeks. 
 
6. A further evidence stocktake should be held within 12 weeks (no claimant assessment) or maximum 16 weeks (where assessment required). 
 
7. A neutral (non-binding) neutral evaluation will be held (if agreed between the parties) within 4 weeks of point 3 If no expert evidence or within 4 weeks of point 6 if expert evidence is required. 
 
8. The outcome of the neutral evaluation is to be issued no later than 4 weeks from the start of the evaluation. 
 
9. There will be a post-evaluation offer period of 28 days from the neutral evaluation outcome where parties are encouraged to make offers to settle the claim. 
 
The requirements for the Letter of Claim are the same as on the standard track save that it should include an explanation as to why the claim is suitable for the light track. 
 
As above their will be a template Letter of Claim in the protocol which is not mandatory. Moreover, expert and witness evidence will not have any restrictions but should their length and detail is expected to be proportionate to the claim. 
 
Sanctions 
 
The reforms include costs penalties and sanctions. These are as follows: 
 
- Where the required information in the Letter of Claim and accompanying evidence pack is deficient, a reduction of 50% to the recoverable costs can be applied. 
- Where the Defendant does not respond within 6 months of the LVCD protocol. The claim will exit the protocol. 
- Where Claimant unreasonably refuses Neutral Evaluation then the recoverable costs can be reduced by 50%. If the Defendant unreasonably refuses the claim exits the Portal process. 
- Where the Defendant fails to meet a deadline then there will be a 50% uplift to damages agreed or awarded. 
- Where the Claimant fails to meet a deadline there will be a 50% reduction in recoverable costs. 
- Where Defendant fails to respond to the Letter of Claim on the light track, the claim will restart in the standard track and standard track costs will apply. The Defendant will also have to pay 5% of the light track stage one costs. If the Defendant responds on the light track but denies liability then the claim restarts on the standard track. The Claimant will not recover anything for the work undertaken on the light track. 
- Where the Defendant does not respond to the standard track Letter of Claim within 6-months, the claim will exit the LVCD portal and the costs which apply throughout will be those applicable to the relevant track. 
- Where a party proceeds to trial after neutral evaluation, if the Claimant does not obtain a judgment at least 20% greater than the amount recommended for settlement, a 50% reduction to the fixed recoverable costs will apply. 
 
The government say the sanctions will be considered in the first year of implementation and altered if necessary. 
 
Neutral (Non-Binding) Evaluation 
 
It will be open to any suitably experienced legal professionals including barristers, solicitors and others with sufficient impartiality to take on the role as an evaluator. Evaluators will be instructed jointly. The party proposing an evaluation will be expected to offer 3 prospective evaluators with the responder choosing one of the 3. If none can be agreed then the responder can counter proposed 3 alternative evaluators. If the choices are refused then the refusing party needs to explain the basis for its refusal. If there’s still no agreement then a Protocol Referee can assist. 
 
Initially it was proposed to split the evaluator’s fee but it has now been decided it will be fully funded by the Defendant. 
 
There will be sanctions for parties who unreasonably refuse to engage in the process. A reduction in recoverable costs of 50% may be applied. If the Defendant refuses, this ends the Protocol and the claimant may issue proceedings. 
 
If neither party believes evaluation is appropriate then it is open to the parties to engage in settlement offers or issue proceedings. 
 
It is a paper based process. If one party wishes to proceed to evaluation, evaluation should proceed. Evaluation is expected to be provided within 4 weeks and will be an opinion upon the likely outcome of liability, quantum or both aspects of the claim. 
 
Evaluation fees will be as follows: 
 
- Liability & Quantum - £2,500 
- Liability Only - £1,500 
- Quantum Only - £750 
 
Where a party proceeds to trial after neutral evaluation, if the Claimant does not obtain a judgment at least 20% greater then the amount recommended for settlement, a 50% reduction to the fixed recoverable costs will apply. 
 
Limitation & Protective Proceedings 
 
Rather shockingly, where protective proceedings are issued due to limitation, only the issue fee will be recoverable. No costs will be allowed relating to issuing or seeking an order to stay the claim will be separately recoverable where the LVCD protocol process in either track has not been completed. 
Parties can agree to extend limitation but if the Defendant will not do so then the only cost consequence it faces is the issue fee. This cannot possibly be right or fair. 
 
Initial offer must be made with the Letter of Claim 
 
In a potentially significant culture shift for many Claimant practitioners, the LVCD protocol will require Claimants to make an initial offer of settlement at the same time as the Letter of Claim. There is a clear drive to keep these claims out of the courts. 
 
Human Rights Act Claims 
 
Clinical negligence claims which includes grounds under the Human Rights Act 1998 will be subject to the LVCD protocol and the applicable fixed costs. 
 
Defendant costs 
 
Where a Defendant can recover costs (i.e. post issue) then the Defendant costs will be calculated by reference to the agreed damages at settlement or following judgment. If QOCs is disapplied and there are no damages then it will be calculated by reference to the amount of damages specified in the Letter of Claim. 
 
London Weighting 
 
Where a Claimant lives, works or carries on business in London and instructs a legal representative who practises in London then there will be a 12.5% uplift to be applied to the applicable fixed costs. 
 
Disbursements 
 
Recovery of disbursements currently remain uncertain. There is a consultation which is open until 27 October. Details of this and how to respond are here.  
 
Only 98 responses were received to the main consultation, will more be received for this? 
 
The headlines: 
 
- Expert Report fees will remain recoverable but subject to reasonableness and proportionality. 
 
- Recoverable elements of ATE premium to remain recoverable. 
 
- No recoverability of Counsel fees pre-issue. 
 
- Court fees recoverable where limitation in issue only. 
 
- Counsel fees and court fees recoverable for claims involving Protected Parties and children. 
 
- No other Disbursements will be allowed on basis that fixed costs proposed "in the full consultation response are sufficient to cover such costs". So no allowance for medical record pagination, medical records etc. 
 
Notably no clarity on medical agency fees where expert fees are concerned. 
 
The proposals are shocking and will see a complete restriction on costs together with a highly restrictive disbursement regime which goes significantly beyond what we have ever seen before on fixed costs regimes. This will undoubtedly have consequences for access to justice. 
 
On the Fast & Intermediate Track disbursements are recoverable so long as they are reasonable & proportionate and not referred to specifically within the applicable rules. Why do the LVCD proposal seek to go beyond this? 
 
You would expect them to follow the process of the Court of Appeal decision in Santiago to allow disbursements which are necessary for access to justice but given some of the comments in this report, it looks like there will be no additional allowance for things such as translation and intepretation expenses. The government's initial view appears to be that the bolt-on is sufficient to cover the solicitor and any expenses.  
 
Next Steps and the Future 
 
The next steps in implementation will be for the government to submit draft rules for consideration by the CPRC. They are hoping for April implementation. Given the mess with the October reforms and the limited time for parties to consider and get to grips with the same, any implementation that swift is unlikely to be smooth as they suggest. 
 
The government have also confirmed that there will be a further consultation which will focus on disbursements and provisions for the same within the LDFRC scheme. 
 
A post implementation review will take place within 3 years of implementation. It will consider the impact of the reforms and whether the aims have been met. It will also seek to address any unintended consequences. 
 
They will look at ways to take into account inflation and will work the CPRC on this. There is no ruling out of possibly extending the upper limit in future. 
 
A shocking statistic in the report comes from the Society of Clinical Injury Lawyers with 70% of their polled members revealing they would withdraw from the market on the basis of the previously recommended proposals. The further proposals and details given are unlikely to have altered this figure leading to serious and real concerns over access to justice. 
 
The government’s view is that the new process will reduce the time spent and speed it up. They accept there will initially be additional costs, though state they believe that existing familiarity with fixed costs in other PI cases will mean such costs could be minimal. I think most would take issue with these statements. 
 
They openly admit that small firms will be less able to compete and will be disproportionately impacted by these reforms given the economies of scale of larger firms and their abilities to provide services ‘en-masse’ (i.e. Defendant firms). To see the government include in an official report an open acceptance that their reforms will inhibit the ability of representatives to undertake legal representation is damning. It is an open admission that these reforms will reduce and restrict access to justice. This is unacceptable. But concerns may be alleviated because the government “remain convinced there is a good economic case for making the proposed changes”. 
 
Looking at the 100-page report it goes significantly farther then the October reforms. To be blunt these proposals will impact access to justice for lower value clinical negligence claims. The fact that the LCVD costs will apply based on settlement values removes certainty for parties. 
 
It’s reasonable to expect that there will be significant opposition to these reforms and if Judicial Review proceedings are launched it would be an entirely expected development. 
 
There is a lot of detail to work through and we do not yet have the draft rules which will need to be worked through again. The proposals in the disbursement consultation are the most restricitve we have seen. We would encourage practitioners to respond to the consultation by 27 October. 
 
For all we know there is a lot we don’t. What this report does is to put cost above everything else. The report is brutal and again raises questions not just about access to justice but access to quality access to justice. 
 
At the end of the day these reforms will have a greater impact upon victims, they will almost certainly negatively impact access to justice and will disproportionately impact vulnerable parties and those with limited assets who simply cannot afford to bring claims. 
 
Those who can afford it won’t be inhibited at all as these are only fixed recoverable costs. A party can continue to pay what they want for legal representation. 
 
All Claimant Clinical Negligence practitioners should be look at their shelves to see what cases they have where Letters of Notification/Claim have not yet been sent and may prospectively settle at less than £25,000.00. If you have such a case make sure you provide notification before 6 April 2024 else all of the work undertaken right now could be subject to fixed costs. 
 
We are always happy to talk any aspect of costs! Should you have any queries arising from this blog or generally then please get in touch for a chat either via phone 01482 534567 or e-mail info@carterburnett.co.uk. Follow us on LinkedIn to keep up-to-date with developments. 
 
Note: This article was updated on 20/9/23 with details of the disbursement consultation. 
 
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