MoJ reform update confirms indemnity principle will apply to DBAs

Clinical negligence: recoverable ATE will not extend to expert reports on quantum

The indemnity principle will apply to lawyers acting under damages-based agreements (DBAs), the Ministry of Justice (MoJ) has confirmed.

In its latest update on the civil justice reforms, the MoJ said this meant that if the DBA fee is less than the recoverable base legal costs would be in the absence of the DBA, a losing defendant will only be liable to pay the DBA fee.

The update also revealed that ministers have confirmed the intention to restrict the recoverability of after-the-event insurance premiums for expert reports in clinical negligence cases – the one exception to the end of ATE recoverability – to reports determining liability and causation only, and not quantum.

It said that part 36 will trump the protection provided by qualified one-way costs-shifting only up to the level of damages recovered by the claimant, despite strong rumours of a policy shift on this that would also have brought recovered costs into the equation as well.

On referral fees, the MoJ said it is not currently intending to make any regulations under section 57(9) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012. The Act permits payments that are consideration for the provision of services, but this section allows the Lord Chancellor to set an amount above which such a payment will be treated as a referral fee. “[We] will keep the matter under review,” the update said.

There is still no date for the consultation on reducing the costs and number of whiplash claims, which will include proposals to raise the small claims limit for personal injury from £1,000 to £5,000 and the introduction of independent medical panels. However, the update confirmed there will be a full 12-week consultation, as well as a number of stakeholder sessions, indicating either that publication must be imminent if any changes are to be introduced for 1 April 2013, or alternatively that reform will be delayed beyond that date.



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