4 January 2013Print This Post

You do the maths

How the Ministry of Justice’s background calculations on new fee levels may have looked, but probably didn’t

Posted by Neil Rose, Editor, Litigation Futures

Chris Grayling’s decision just before Christmas to rethink the implementation date for the RTA portal extensions was an unexpected present for claimant lawyers and a victory for the Association of Personal Injury Lawyers (APIL) and Motor Accident Solicitors Society (MASS), which had begun the judicial review process over the failure to conduct the full review that had been promised before such a move was taken.

The timing of the climbdown, so soon after the Lord Chancellor announced his controversial plans to curtail the number of judicial reviews, was particularly unfortunate for the government.

Anyway, the good news was tempered by the statement that the rethink did not affect the consultation on the proposed new fee levels for portal claims and fast-track cases that fall out of the claims process. The consultation closes today and the tenor and content of the response issued by the Access to Justice Action Group (AJAG) will no doubt be echoed by other claimant lawyers and groups, not least the obvious (to everyone else) failure to take into account the impact raising the small claims limit would have.

But there is one aspect of the consultation that continues to make my blood boil (and I don’t normally get worked up about these things). Irrespective of the rights and wrongs of the proposals, and of what side of the fence you sit, the Ministry of Justice’s (MoJ) failure to explain how it actually came to the figures it put forward is so patently outrageous that surely Mr Grayling would have to abolish judicial review altogether to save it from another challenge.

It defies belief that figures put together after the entire claim process was analysed down to five-minute segments of work could be thrown away and replaced with fee levels that, for all we know, were plucked from the air. Or from the Association of British Insurers’ Christmas wish-list.

The common assumption is an official at the MoJ simply subtracted what they reckoned is an average referral payment of £700 from the current £1,200, and hey presto you have a new portal fee. One hopes it was more sophisticated than this – referral fees weren’t built into the original calculation, while some allowance should be made for marketing costs – but absent any explanation from the MoJ, one cannot help but suspect it wasn’t.

North-west law firm Forster Dean has been trying to get to the bottom of this. It submitted a Freedom of Information Act request to the MoJ on 26 November seeking the release of relevant documents showing how the figures were reached. On 20 December the MoJ responded by saying that it had some of the information sought, but that it might be exempt as it relates to the formulation of government policy.

It said: “In line with the terms of this exemption in the Freedom of Information Act, we have to consider whether it would be in the public interest for us to provide you with the information requested. However, we have not yet reached a decision on the balance of the public interest in this case.”

As a result, it has used powers under the Act to extend the time for making this decision to 22 January, some 18 days after the consultation closes. Not a great deal of use, one might suggest. As Forster Dean chief executive Greg Shields puts it: “I don’t understand why the MoJ simply would not put this information in the public domain to promote a mature consultation on the way forward.” The firm has also gone back and asked how what is essentially an arithmetical exercise counts as the formulation of government policy.

We do not expect the government to act capriciously but that is what it appears to be doing. As it is, the MoJ is hardly covering itself with glory given that, with less than three months to go, practitioners still don’t know the shape of the regimes for damages-based agreements and qualified one-way costs-shifting, to take two significant examples, nor when any change to the small claims limit will be implemented. The detail of the referral fee ban will not be settled until less than a month before it comes into force (indirectly the government’s fault given the time it has given for its introduction).

One fears a repeat of what happened with the critical Fenn report on the first year’s operation of the portal, publication of which was held back by the MoJ until after it had made the decision to extend the regime.

If the implication is that fees will go down on 1 April irrespective of when extension happens, then there is no more time to waste. The MoJ, if it is to retain any credibility, must publish now, and give time for stakeholders to examine and comment on its methods, before announcing its final decision. In line with how the figures were no doubt calculated, it’s not rocket science.

 

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One Response to “You do the maths”

  1. Well said Neil!

  2. Sue Nash on January 4th, 2013 at 4:16 pm