Litigation costs give rise to fixed fees alternative

Insurance lawyers have been making the case for fixed fees to deal with the out of control costs of litigation, in anticipation of this week's Civil Justice Council (CJC) costs forum.
“Insurers have moved from suspicion to a deep and unhappy conviction that fees have been going up and have been going up very considerably, and there's been some hardening of attitudes there,” claimed Tim Wallis, president of the Forum of Insurance Lawyers (Foil) and senior partner at Crutes. The group is arguing that fixed fees are “the way ahead” and called on personal injury (PI) lawyers “to consider and actively seek a workable solution”.
The CJC is also meeting this week to consider the contentious subject of rising costs. At the end of last year, the CJC, which has a statutory brief to monitor the civil justice system, held its first costs forum, where it was agreed by a majority that some attempt to fix costs was worth exploring. Professor John Peysner of Nottingham Law School was charged with putting forward proposals for a fixed costs regime and to report back to the council within a year.
According to Wallis, the CJC terminology has now changed from fixed costs to 'predictable costs'. “They've taken the view that it's a red rag to a bull, given that the claimant solicitors and trade union solicitors have some problems with fixed costs,” he said. “I think it's a change in form rather than substance.”
Foil is arguing that the recent spate of case law since last year's meeting – such as Callery v Gray, Sarwar v Alam, the Claims Direct test cases and Tilby v Perfect Pizza – have made it even more urgent to look at fixed costs. “They highlight that the debate has become all about the costs of costs rather than anything else,” commented Jason Rowley, Foil vice-president and partner at Vizards Wyeth. “That's why there's the political will to come up with something better.”
The group is keen to dispel some myths and deal with claimant lawyers' concerns that, for example, insurers will abuse any new system by stringing out cases.
“You could escape from a fixed regime and you should be able to escape if any party is behaving in an uncooperative way; and it should be possible to take that before the court and complain,” explained Wallis. He also said that such a scheme should not cover complex or important cases.
However, it is clear that those lawyers on the other side of the PI fence will need some persuading. At the Association of Personal Injury Lawyers' spring conference, only 15 per cent of the 675 respondents to a consultation welcomed the prospect of a scheme determined on a scale according to values of claims.