Government lays out plans for fixed recoverable costs in mesothelioma claims

Mesothelioma claims: average base costs are £8,300

A fixed recoverable costs (FRC) regime for mesothelioma claims could enable claimant lawyers “to build more predictability into their business models for managing claims”, the government said yesterday.

Issuing a consultation on its planned Mesothelioma Bill, the Ministry of Justice said FRC may also reduce the costs to claimants of ‘shopping around’ to find the best deal from lawyers and cut the ‘costs of the costs’.

The bill is designed to speed up the claims process, with research showing that 50% of mesothelioma cases take more than 12 months to settle; however, sufferers only live seven to nine months on average after diagnosis.

The proposals, which follow an agreement with the Association of British Insurers, aim to have cases with a traceable insurer resolved within six months – three months for straightforward cases – by cutting out litigation through a dedicated mesothelioma pre-action protocol (MPAP). This would replace the current pre-action protocol for disease and illness.

An industry-funded electronic secure mesothelioma claims gateway would provide a secure method for the exchange of information between parties, such as medical records, and also handle untraced claims.

The proposal is that FRC should only apply to cases entering the MPAP. Cases conducted outside of it would still go through the Royal Courts of Justice fast-track procedure and be subject to the guideline hourly rates. “However, the settlement of legal costs for cases which do not use the MPAP might take into consideration whether those cases might reasonably have been resolved in accordance with the MPAP,” the consultation said.

It also sought views on whether a similar or a different structure or approach should be taken for defendants’ costs, to help maintain balance in the settlement process. Its current position is that defendant costs are not recoverable for claims which settle under the MPAP.

The consultation paper stressed that the FRC should be set at a level which accurately reflects the nature of the legal work needed so as not to “compromise access to justice” for sufferers and their dependants, as well as allow lawyers to provide adequate work.

The report said the regime should not “discourage parties from using the MPAP to reach settlement without the need for litigation”.

The in the proposals put out for consideration this week, the MOJ suggests three models for the FRC:

  • A single flat fee – where one fixed sum would be recoverable to cover all cases settled within the MPAP, irrespective of variations such as the level of damages awarded;
  • Separate flat fees for different stages of the MPAP – under which the total single flat fee could be broken down by the stages of the MPAP, with individual staged fees only being recoverable once the relevant stages of the MPAP have been undertaken; or
  • Multiple flat fees or variable fees – under which there would be a set of flat for different groups of mesothelioma claims, or alternatively a FRC scheme with variable elements on top of a lower base flat fee or staged fee.

According to the proposals, research shows that the median base legal costs for all non-litigated cases is around £8,300.

The Jackson reforms do not currently apply to mesothelioma cases but the consultation suggested removing this exemption, raising the possibility that claimant lawyers in these cases would have to take a success fee out of damages.

Claimant lawyers have previously expressed concern that the new regime could leave their clients out of pocket and that it doesn’t include victims of other asbestos-related diseases.

But Matthew Stockwell, president of the Association of Personal Injury Lawyers, was more conciliatory following publication of the consultation: “Mesothelioma is a tragic and highly sensitive issue and there is much to discuss if we are to get this right for sufferers.

“We hope this exercise will result in a fairer system which will benefit people who are dying from a truly awful disease they contracted just because they turned up for work, often many decades ago…

“We look forward to ongoing discussions over the next few months and are encouraged by the government’s expressed willingness to listen to new ideas.”

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