Civil Justice Reforms Strategic Overview Paul Edwards, Head of Costs

Progress of Civil Justice Reforms Government motivation for the reforms? 43% of all legal spend on third party costs and a desire to end the “compensation culture” Sir Rupert Jackson - Enquiry Into Costs, Implementation by HHJ Ramsey LASPO – Legal Aid, Sentencing and Punishment of Offenders Bill NHSLA predict saving £1m per week on Additional Liabilities alone Proposed implementation - April – July 2013

Ready for implementation? 2 weeks away from implementation Draft CPR and Practice Directions published Amendments to new rules published BUT –Small claims track consultation outcome awaited –New EL/PL protocols not yet approved (delay till end July) Portal extension for RTA/Motor/EL postponed before Christmas but now pushed through

Portal extension to RTA, EL & PL Extension of Portal regime to EL and PL matters and increase in RTA limit All cases up to £25,000 New protocols for Portal use End of April for Motor Extension End of July for EL and PL cases

Portal extension implications Potential to reduce costs liability if cases remain within portal and reduce shelf life of claims Key is efficiency and quick, correct decision making Pick the right cases to allow to exit Motor experience prepares us for matching new requirements from a practical and technical perspective Experience in monitoring and challenging Claimants who wrongly exit

Fixed Recoverable Costs Fast Track (up to £25k) cases that escape the Portal will be subject to a new regime of Fixed Recoverable Costs (FRCs) Predictable rather than fixed – lower than currently typically claimed Escape clauses Monitoring abuse and challenging (eg delayed settlement) Will more cases be fought?

Funding reforms Ending Recoverability of Success Fees and ATE - success fee to be deducted from damages, note Meso and Clin Neg exceptions Damage Based Agreements New definition of proportionality Ending recoverability is offset with 10% increase on damages – not future losses Part 36 reform and penalties – extra 10% up to £75,000 Qualified One Way Costs Shifting

Principle in personal injury cases: If Claimant wins they get their costs BUT If Defendant wins they don’t! Application of “Qualification” –Recovery up to value of damages in lost claims –In claims that are successfully defended recovery permitted in cases where Fraud is found - other scenarios to be tested?

QOCS – risk or opportunity? Perceived risk in initial spike in spurious claims Strategic review – fighting to trial with no prospect of costs recovery? Key is good claims data and decision making at the right time and being aware of fraudulent cases. Picking the right claims to defend and those to settle commercially.

Costs and stricter Case Management Cost budgeting in all multi track cases up to £2m –Preparing our own budgets –Challenging Claimants Our “Pilot” experience –Skeletons –Tactical Budgets –Attendance at Costs Management hearings Open Costs Offers “MUST” be made –Part 36 now applicable to costs including “penalties” General CPR update –Stricter Relief from Sanction provisions –Easier to strike out/enter judgment –Concurrent evidence

Small Claims reforms Potentially an increase in the Small Claims Limit for PI to £5,000 (note Govt threat of £15,000!) purportedly to combat fraud and the whiplash culture Response to consultation due in March Any increase would remove costs for those cases –Robust response to cases inflated to be reallocated needed –DBAs to fill funding vacuum?

Any questions?