Civil Justice Council sets out streamlined procedure and fixed costs for deafness cases

Deafness claims: transparency call

The Civil Justice Council (CJC) has recommended to government a streamlined procedure for handling fast-track noise-induced hearing loss (NIHL) claims and a fixed-costs regime to go with it.

The report, publication of which has been delayed for some months, puts a strong emphasis on settling cases before proceedings begin.

The Master of the Rolls Sir Terence Etherton, 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.”

The government tasked the CJC with looking at how the handling of NIHL claims could be improved and how a fixed-costs regime might work.

The working group behind the report was headed by well-known defendant lawyer Andrew Parker, a CJC member, with leading claimant practitioner David Marshall as vice-chair. Former Court of Appeal judge Sir Alan Ward and former Senior Costs Judge Peter Hurst acted as mediators.

In his introduction to the report, Mr Parker 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 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 ideas put forward included precedents for more detailed letters of claim and response, with pre-medical offers “discouraged”.

The report said: “The sheer volume of NIHL claims may have contributed to letters of claim becoming generic and lacking in detail.

“This has led to standard defendant requests for additional information which may not take account of information already supplied. Response letters are either not sent or delayed and of limited value. Denials of liability are almost standard.”

The report also called for stricter adherence, and more insurers signing up, to Association of British Insurers’ guidelines on interaction between defendants and handling insurers where there are multiple defendants.

It outlined too ways to restrict the need for further expert evidence, saying a consultant report would not be needed where liability was admitted, while a defendant requiring a retest or seeking its own medical evidence would take the case out of the fixed-cost regime.

On experts more generally, the working party recommended further work to agree a system of accreditation/approval for audiologists, although not at this stage through MedCo.

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.

“Defendants should be encouraged to put questions to the claimant’s expert as an alternative to instructing their own expert. The parties should generally be encouraged to agree an early position on the use of experts.

“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 – 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.

Despite differences over the application of fixed costs – which led to the narrowing of cases where they would apply – a regime was agreed to 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 fixed costs have been broken into three stages, with the figures printed below at the end of this article:

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.

For his report on fixed recoverable costs in July, Lord Justice Jackson had already seen the CJC report and endorsed it. On the question of counsel’s fees, he said: “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.”

Finally, the working party recorded its disappointment that the ongoing problem of dissolved companies as defendants has not been remedied by the eventual implementation of the Third Parties (Rights Against Insurers) Act 2010 on 1 August 2016.

“The 2010 Act does not apply where both the cause of action and the insolvency occurred before that date, meaning that in most NIHL claims, the provisions of the Act could not apply for many years, probably decades. This problem could be remedied by allowing the 2010 Act to be used for all cases where the claim is first notified on or after 1 August 2016.”

Note: L1: Issue to allocation; L2: Post-allocation to listing; L3: Listing to trial

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