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This afternoon's news on the long awaited portal rules

The claimant lobby had been complaining recently about the fact that the MoJ had not published the changes to the rules, practice directions and protocols for the important portal changes happening to RTA, EL and PL claims as at the end of July 2013. What they wanted to see was at last published late this afternoon, just before the weekend.

Portal changes

You may have heard that the claimant lobby had been complaining recently about the fact that the MoJ had not published the changes to the rules, practice directions and protocols for the important portal changes happening to RTA, EL and PL claims as at the end of this month, 31 July. What they wanted to see was at last published late this afternoon, just before the weekend. Links to the material are at the end of this message.

There are some additional details now available as to how the changes to the portals and the Fixed Recoverable Costs (FRC) regime will apply.

We were waiting to see how transitional RTA portal claims in the existing £1-10k portal would be dealt with as far as FRC were concerned. We now have an answer - the FRC outside the portal will only apply following a claim dropping out of the portal where the CNF was submitted on or after 31 July, so that any claims where the CNF has been lodged prior to 31 July will not be subject to the new FRC regime outside the portal if they drop out, but only to the current costs systems including the use of predictive costs pre litigation, and hourly rate costs post litigation. This decision means that claimant lawyers will not have a particular reason to take cases out of the portal before 31 July, as whenever cases lodged before 31 July do drop out, the new tougher FRC will not apply.

We also now have details of the new Part 36 rules and their interrelationship with the new FRC. In summary:

  • Where a claimant accepts a defendant's Part 36 offer in time he gets FRC for the stage the claim was at as at the date of acceptance, the four stages being issue of proceedings, allocation, listing for trial, and trial.
  • Where a claimant accepts a Part 36 but out of time, the claimant gets FRC to a date 21 days after the offer, and the defendant then gets costs from that date to the date of acceptance. To work out how much the defendant gets for costs you start by looking at the FRC that the claimant would have got as at the date of the late acceptance, and deduct the FRC in fact payable to the claimant, and then the defendant will be allowed some costs by the court which are up to but do not exceed the difference. So if the case has not moved between the four stages, the defendants gets no Part 36 costs!
  • Where a claimant is awarded more by the court than his own Part 36 offer which the defendant did not accept, the claimant is free from FRC and gets hourly rate costs on the indemnity basis, plus the usual extra interest as well as the new penalty equivalent to 10% of damages in most cases up to a cap of £75k. So plenty of reason now for claimant lawyers to want to avoid FRC by making a Part 36 offer in claims inside and dropping out of the portal, as if defendants reject the offer but the court awards more, not only is there the extra 10% on damages for the claimant, but there is also now hourly rate costs and not FRC for the lawyers.

The new rules also cover the position where the defendant recovers costs from the claimant. The position varies as to whether or not the claimant has QOCS protection. As a reminder, all claimants going onto retainers with their lawyers after 1 April will have QOCS protection, while the vast majority of pre 1 April retainers will not involve claimants having QOCS protection. Where a defendant wins against a claimant who does have QOCS protection but an exception to the protection applies for example because the claim is found to be fundamentally dishonest, then the defendant will recover ordinary (non FRC) costs. But where the claimant does not have QOCS protection as the case is a transitional one involving a pre 1 April retainer, then the costs that the defendant will recover will be assessed by reference to and cannot exceed the costs that the claimant would have recovered if he had won based on the quantum of the claim as presented. This would seem to leave open an argument from the claimant that the defendant should in fact be awarded less than that amount. The rules have gone for a compromise solution on this point.

To identify the quantum of the claim as presented to work out the level of defence FRC, you exclude any vehicle related damage from any RTA portal claim. It would seem though that when looking at the quantum of a settlement to work out the level of FRC payable to a claimant outside of the portal, it is the full level of the damages recovered including vehicle damage in a personal injury RTA claim that is taken into account. In the portal however, vehicle damage is specifically disregarded when ascertaining the value of the claim to decide whether it falls within the portal, and the level of FRC inside the portal.

As to the costs of interim hearings in issued cases which are subject to FRC, these are payable whoever wins at £125 plus VAT and court fees. Not a lot of money and no real incentive here for claimants to issue interim applications.

Also today came further news on the Enterprise and Regulatory Reform Act that will come into force for all new causes of action which happen on or after 1 October this year and which removes civil liability for breaches, meaning claimants in new claims will have to rely on allegations of negligence. We were waiting for confirmation as to what existing Regulations the Government would exclude from the effect of the new law so as still to give rise to civil liability. We now have the answer with the publication of the Health and Safety at Work etc. Act 1974 (Civil Liability) (Exceptions) Regulations 2013 which confirms that only protection given to pregnant workers will retain protection, and all other regulations will no longer attract civil liability.

For further information contact Simon Denyer, Partner on 0161 604 1551 or email simon.denyer@dwf.co.uk

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.