Blog: MoJ fixed costs consultation is whack-a-mole for policymakers

Legislation is often like the fairground game ‘whack-a-mole.’ It aims to improve the lot of one group of people but, in doing so, sometimes unintentionally penalises another group by creating different problems. Civil Justice constantly wrestles with this dilemma. Look no further, for example, than the government’s plan for fixed recoverable costs to be applied to most civil cases - including personaI injury -  worth up to £100,000.

The Ministry of Justice has announced a consultation that focuses on expanding the fast track and fixing the costs that can be recovered back from the losing party, with reference to a pre-determined fee matrix.

The consultation, which ended on the 6 June, will hopefully deliver policy outcomes that are based on factual evidence and informed choices, rather than political (aka cost-driven) expediency. And therein lies our ‘whack a mole’ problem.

While law firms will probably see some costs reduced under the new proposals, forward-thinking firms will have structured themselves to manage this change and apply the learnings from dealing with fixed costs in the fast track.

Fixed costs can provide more certainty and improve cash flow, as cases will not become bogged down in technical costs arguments at their conclusion as lawyers find quicker ways to resolve the core issues. Some customers should benefit too. If cases are settled faster they can get on with their lives quicker too.

But for more seriously injured people, the proposed changes have a downside. With increased efficiency comes the risk from the proposed fixed-fees mechanism that some claimants will suffer from their cases being under-investigated, leading to detriment.

To be clear, fixed fees do have a part to play in serious injury claims. It is right to give customers certainty of pricing in most services they engage with. Why should the law be any different? However, not all issues are clear on day one and flexibility is needed to allow claimants to fully understand the extent and impact of the injuries they have sustained.

In wider consumer services, fixed pricing is usually linked to an easily predictable fixed cost, such as replacing a windscreen or refitting a damaged carpet. Insurers have, in my view, always been better at fixing bent metal than the damaged human being inside it, and that’s because bent metal is more predictable; human beings are all individual and each and every one of us responds to things in different ways.

So the MoJ needs to acknowledge that some cases are more complex and require more investigation than others. The drive to reduce costs in the majority of claims risks the minority - often more seriously injured people - failing to gain the support they need.

Sponsored