The Civil Justice Council’s (CJC) long-awaited report on reforming fast-track noise-induced hearing loss (NIHL) claims was published yesterday with a united recommendation for a fixed-costs regime.
It recommends to the government a ‘building blocks’ model with fees received depending on which stage a case concludes.
The proposals – which were drawn up by a working party made up largely of claimant and defendant representatives – had already been seen by Lord Justice Jackson when he issued his report on fixed recoverable costs in July. He said: “The agreement reached is a reasonable one and I endorse it.”
The CJC report said: “Fixed costs should be set at a level which reflects the steps reasonably required for a claimant solicitor to present and run a successful claim. This would ensure that costs are contained and are proportionate and would introduce efficiencies into the system while removing the additional costs involved in negotiating costs at the end of a claim.”
Concerns expressed by claimant lawyers on the CJC’s working party about applying fixed costs to more complex cases means that there are exceptions.
In his introduction to the report, working party chair Andrew Parker – a CJC member who is head of strategic litigation at defendant firm DAC Beachcroft – said: “Inevitably, the scope of those cases covered by the fixed recoverable costs proposals is a compromise.
“We found as negotiations progressed that we made more progress by excluding non-standard cases or those which were more likely to involve greater costs or complexity. The resulting scope is still expected by all sides to cover a significant majority of NIHL claims which succeed.”
The Master of the Rolls Sir Terence Etherton, the chairman of the CJC, said: “These claims present with special characteristics. Their complexity and the importance of having a timely resolution point to their needing a specific fixed costs regime that is complementary but not identical to a more general fixed costs system as proposed by Lord Justice Jackson in his recent review…
“I have written to the Lord Chancellor to commend the report and ask for its recommendations to be considered as part of the forthcoming wider review of fixed costs.”
Alongside the fixed-costs proposals are recommendations for simplified procedures both pre- and post-proceedings, with an emphasis on early disclosure to prompt early settlements.
The report said the working group’s “underlying philosophy” recognised that in NIHL claims, “probably uniquely among industrial disease claims”, an early test of the claimant’s hearing loss in the form of an audiogram can provide reasonably objective evidence for both sides on the validity of the claim.
“The production of such an audiogram, from a reputable source, with the letter of claim together with greater relevant information about the claimant’s working history, including a schedule from HMRC, will significantly assist the defendants in forming an early view of whether the claim is likely to succeed.
“In turn, defendants armed with better information from the claimant should be expected to produce a fuller and more reasoned response to the letter of claim when providing their formal protocol response.
“This early exchange of information should lead to the potential for more cases to settle pre-litigation. Where litigation is still required, it is likely to have more focus on the true issues in dispute.”
The report included proposed precedents for more detailed letters of claim and response, and restrictions on when further expert evidence could be obtained. Where a defendant required a retest or sought its own medical evidence, the case would fall out of the fixed-cost regime.
Where proceedings were issued, the streamlined process would see standard directions across all courts, which should be used in particular to control the number of experts, the report said.
“Overall, we consider that the most effective way of addressing many of the post-litigation issues remains to improve the efficiency of pre-issue process through the use of better communication and disclosure of information between the parties.”
The working party was unable to agree on whether a preliminary issue trial on limitation should take a claim out of the fixed-cost regime and the Civil Procedure Rule Committee “may ultimately need to consider this point”.
However, it did agree that if preliminary trials on limitation were included within the fixed-costs regime, there should be tighter controls on the criteria applied when ordering such a trial as there was considerable inconsistency at present.
Fixed costs would cover both pre- and post-litigation, as well as cases where liability was in dispute and where there were no more than three defendants. Beyond that point, it would be too difficult to contain the case within the confines of the fast-track or of any suitable fixed-costs regime, the report said.
The fixed costs have been broken into three stages:
Stage 1 – Up to and including the letter of claim
Stage 2 – Cases where liability is admitted
Stage 3 – Liability not admitted
Stage 2A/3A – Cases where papers have not been prepared to issue proceedings
Stage 2B/3B – An additional allowance for the cost of preparing papers to issue where incurred
The pre-litigation fees take into account the involvement of counsel to prepare the papers for proceedings and recognise “that the involvement of specialist counsel at a relatively early stage in NIHL cases is of benefit to both parties”.
However, counsel’s involvement post-litigation would be on a disbursement basis in addition to the fixed costs, although any involvement of counsel must be “justified” as reasonable.
The fixed costs do not include any allowance for the trial itself, with the fixed fast-track trial advocacy fees (usually for counsel) payable in addition.
But, recognising that these are unusually complex cases for what is often a claim of £3-5,000, the working party could not agree on a level for the increased trial fees.
In his report, Lord Justice Jackson said of this issue: “I recommend that counsel’s fees and trial advocacy fees in NIHL cases should be the same as those which I propose for ‘band 4’ cases… Almost all NIHL claims are low value. So… the trial advocacy fee will generally be £1,380.”
The working party said the fixed costs should be adjusted automatically in line with an appropriate index.
Leading claimant practitioner David Marshall was vice-chair of the working party. Former Court of Appeal judge Sir Alan Ward and former Senior Costs Judge Peter Hurst acted as mediators.