Claimant lawyers’ hopes of derailing the government’s plan to cut RTA portal fees from £1,200 to £500 rest in court 1 of the Royal Courts of Justice today.
Defendant insurance lawyers have argued that Wednesday’s portal announcement by the Ministry of Justice was timed to defuse the arguments being put today in the judicial review brought by the Association of Personal Injury Lawyers (APIL) and Motor Accident Solicitors Society (MASS).
The hearing is listed for a day and a decision is expected this afternoon. The judges are Lord Justice Elias and Mr Justice Cranston, the latter of whom was one of Lord Justice Jackson’s assessors.
Tracy Head, a partner at Kennedys, said the timing of the announcement was “clearly a pre-emptive strike by the Ministry of Justice (MoJ)”.
She explained: “The publication of the impact assessment, demonstrating the lack of evidence arising out of the consultation, is designed to strengthen the MoJ’s position in advance of that hearing. The impact assessment is significant in that it signals the MoJ’s view that the new cost arrangements will not limit access to justice but will simply encourage what Chris Grayling refers to as ‘efficient and effective’ law firms.
“It will, therefore, be interesting to see the outcome of the judicial review hearing and whether there will be a further ripple effect of challenges to the now confirmed fixed costs regimes.”
Steve Thomas, director of market affairs at Keoghs, said justice secretary Chris Grayling had responded in part to the judicial review by asserting on Wednesday that a full evaluation of the existing scheme is not required to inform a decision about extending that scheme to £25,000.
“The uncompromising tone of the MoJ’s response indicates that they are intent on delivering these reforms for the summer,” he said.
More generally, Ms Head said that staggering the dates of the extended portal scheme will cause insurers some difficulties in the short term as they will be operating a number of separate regimes.
She added: “It is still disappointing that we do not know what the claim notification form for EL and PL claims looks like to assist with training of claims teams, who are going to need to be prepared to make quick decisions on liability.”
Mr Thomas said that Keoghs was still concerned about the level of costs for cases that fall out of the portal and “the ratcheting effect as those move towards litigation. We question how this will impact claimant lawyer behaviour and this will need to be closely monitored”.
With APIL and MASS not commenting on the MoJ announcement ahead of the judicial review, Nick Hanning, president of the Chartered Institute of Legal Executives, took up the gauntlet to express “profound disappointment” with the MoJ.
“The government has failed to listen to those who have experience and expertise in the area. The referral fee ban simply means that firms will have to pay for alternative forms of marketing and so to reduce fees by reference to a notional referral fee which many firms don’t even pay is completely unjustifiable,” he said.
“It is especially galling when, despite asserting there is difficulty in obtaining reliable evidence, the government has elected to ignore the very detailed evidence which was made available when the fixed recoverable costs were first introduced.”
Mr Hanning said the real losers would be clients: “The knock-on effect of these recommendations is that while some legal practices may be willing to take on cases, it will only be on the basis they are handled by very junior staff, who will have little or no training. Innocent victims of RTAs risk finding themselves either unrepresented or poorly represented and unable to access the expert legal advice they deserve and need.”
Law Society chief executive Des Hudson said: “It is disappointing to see that the views of those who disagree with the Association of British Insurers and the government are declared partial and biased by the Ministry of Justice. These changes will make it more difficult for those injured through the negligence of others to receive compensation.
“Will motor insurance premiums reduce or, more likely, will the profits of insurance companies increase?”