Many recoverable fixed costs (FRC) for personal injury cases have not increased since 2013 and require “immediate review”, the Association of Consumer Support Organizations (ACSO) said.
Matthew Maxwell Scott, executive director of the ACSO, said inflation was an ‘elephant in the room’ and that, without review, law firms may have to increase the costs they deduct by 40-50% damage to customers.
The FRC of £800 for a Road Traffic Portal case over £10,000 should now have risen to almost £1,020 based on the Retail Price Index (RPI).
For a similar case, the FRC of £180 set in 2014 for an initial medical report should have been nearly £225.
“The government has already reduced the fees paid to lawyers representing injured parties; Added to this, failure to review the FRC in a reasonable manner risks many law firms beginning to turn down cases because they are unprofitable or even exit the market altogether,” Mr. Maxwell Scott said. .
“Alternatively, many are predicting a substantial increase in damages deductions for attorneys’ own client costs, perhaps up to 40 or 50 percent, to make ends meet.”
Mr Maxwell Scott has called on the Civil Procedure Rules Committee and the Civil Justice Council (CJC) to review FRCs for IP cases as part of its ongoing consultation on costs.
“There is an elephant in the room when it comes to inflation and the FRC scheme. While PI costs have remained stable for nearly a decade, elsewhere ministers have pledged to review the discount rate every five years.
“The Judicial College guidelines for general damages have increased in line with the RPI, but the DOJ intends to update the matrix proposed by the FRC extended to the lower rate of the price index at the production of services (SPPI). Why do officials use different indices? »
Mr Maxwell Scott said the “whole process” of managing adjustments to fixed costs, tariffs, charges, damages and discount rates was arbitrary and required a “complete overhaul” if consumers were not to not lose the lack of legal support.
He said the CJC recommended in October last year that “inflation should be applied” to lawyers’ indicative hourly rates and considered the issue of “regular, even annual updates” before concluding that it should be guided by further reviews on the FRC. in bodily injury.
Meanwhile, the Judicial College guidelines for general damages introduced in April 2022, over two years since the last update, “have increased by a percentage close to the increase in RPI” for the period to an average of just over 6.5%.
Mr Maxwell Scott commented: “Damage levels are directly linked to FRC calculations, a relationship that the disjointed approach to adjustment processes fails to adequately manage.”
He said Ministry of Justice consultation documents had shown there was an intention to “raise the proposed matrix” for FRCs in the new extended £100,000 fast track by using the lower SPPI rather than the RPI.
He added: ‘The cost regime has been managed piecemeal for too long, and it is high time it was overhauled.