BREXIT and the Impact to the Legal Industry

 

A number of proposed reforms which would have a major impact on the legal industry, particularly the areas of personal injury and clinical negligence, are currently on the agenda awaiting further review and consultation.  These are summarised below.

However, the referendum vote to leave the EU will, undoubtedly, be the main political focus for the foreseeable future together with prime minister/leadership elections for both main political parties and the threat of a further referendum over Scottish independence.

Against this back drop, it is difficult for me to see how any other reform can be carefully and meticulously considered.  It is my hope that no rash decisions will be made and any reforms, which would greatly affect a large proportion of the legal industry, will be left for a time when they can be properly deliberated.

I suspect that the potential reform over the small claims limit and minor whiplash claims, which has been driven by the insurance sector, will be left in abeyance.  Given that many insurers have European/overseas bases those insurers will inevitably have to deal with the impact of the BREXIT vote and get their own houses in order before they continue their longstanding lobbying for changes to the small claims limit and minor whiplash claims.

Likewise, proposed changes to the Bill of Costs are not essential.  We have a well-established Bill of Costs that will take us all through the testing years whilst the UK divorces from the EU.  Clearly Lord Justice Jackson has a vision for reforming the Bill of Costs that he wishes to pursue and push through but I suspect his voice may be a lonely one given the enormity of the referendum decision.

The areas I am most concerned about are the proposed changes to Clinical Negligence Fixed Fees and Court and Tribunal Fees.  My worry is that, if the UK (and beyond) goes into a further recession and if austerity measures are increased, these areas could be seen as a way for the Government to save and make money.  Consequently, badly drafted and wide reaching reforms may be rapidly rushed through.  Such reforms are likely to have the greatest impact on access to justice and the greatest impact to the livelihoods of the legal profession.  Whilst the latter may not be afforded much public sympathy, a UK without lawyers fighting for justice or where the public simply cannot afford to pursue their rights would be devastating.

My hope is that there will be no rushing and no hastily and badly drawn reforms so that we can all take a measured and carefully considered approach to any future changes.

Proposed changes:

Clinical Negligence Fixed Fees

Originally the Department of Health’s intention was to introduce fixed recoverable costs from 01 October 2016 but recently the Government conceded it could not meet its timetable having been expected to consult on the plan since last autumn.

A spokesperson for the Department of Health reportedly told the Law Gazette that the consultation would be published ‘later this year’.  A time table has not yet been set.

 

Small Claims Limit and Minor Whiplash Claims

The Government published a briefing paper on 03 May 2016, found at: http://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN04141

Following previous consultation in 2013, the Government is now proposing to increase the small claims track limit for personal injury claims to £5,000.00 and remove the right to general damages for minor soft tissue injuries.  “The Government is concerned about the number of whiplash claims and the impact of the legal costs on motor insurance premiums”.

The briefing paper confirms that there will be a “consultation on the detailed reforms, including safeguards, in due course, accompanied by an impact assessment”. 

Again, the time table for this is unknown.

 

Court and Tribunal Fees

The Justice Committee report published on 16 June 2015 found at:

http://www.publications.parliament.uk/pa/cm201617/cmselect/cmjust/167/16702.htm

The report confirms that “the Government has not ruled out returning to its previous proposal of increasing the cap on fees for money claims from £10,000.00 to £20,000.00” and states “it would be unsatisfactory if it were to bring forward this proposal again before undertaking an analysis of the impact of the increase which has already taken place, to 5% of the value of a claim up to a cap of £10,000.00”.

The committee also appeared to favour a “system in which there is graduated or sequential schedule of fee payments whenever there are substantial fees payable in total in respect of a case in the civil or family courts or tribunals, allied with a requirement for the respondent to pay a fee” but conceded that there was insufficient evidence to be able to recommend adoption of such a system; instead recommending a pilot scheme.

 

The New Form Bill of Costs

Lord Justice Jackson provided a keynote address to the Law Society’s Civil Litigation Conference on 21 April 2016 addressing the reform of the Bill of Costs.

The original plan was that the voluntary pilot set out in Practice Direction 51L would end in April 2016 and a mandatory pilot would then start.  However the CPRC decided to extend the lifespan of the voluntary pilot until December 2016.  However, Lord Justice Jackson conceded “there is now a state of deadlock.  We need practical proposals to break the deadlock and advance the discussion”.  

Lord Justice Jackson then put forward a proposal which can be found at:

https://www.judiciary.gov.uk/wp-content/uploads/2016/04/speech-lj-jackson-bill-of-costs.pdf

Lord Justice Jackson stated that, if the proposal finds favour, a date should be set for when the CPRC will decide whether to implement the new bill of costs and that interested parties should be invited to send representations on the new bill to a CPRC sub-committee which can then report back at that meeting.  Lord Justice Jackson also recommended the voluntary pilot be extended until such time as the new form bill of costs becomes mandatory.

 

By Jenny Garbutt - Solicitor

Jenny Garbutt