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Editorial: Fixed Costs on the Multi-Track - Aidan Ellis, 1 Temple Gardens

22/02/16. I am once again grateful to Lord Justice Jackson for providing the subject matter of this editorial, through his recommendation in the IPA Annual Lecture that the time has come to introduce fixed costs into the ‘lower reaches’ of the multi-track.

I have no doubt that in the coming months many learned critics will have a lot to say about the potential introduction of fixed costs into the multi-track and the detail of the proposals. I will therefore confine myself to three obvious but fundamental points. First, the most principled objection to fixed fees is surely that the difficulty of the case – and the amount of work it requires – is very often unrelated to the value of the claim. Under these proposals, a claim for credit hire charges which happens to exceed £100,000 because of the prestigious nature of the vehicle / length of hire would result in fixed costs of £47,500. By contrast a clinical negligence case involving the death of a child, in which the special damages would necessarily be limited, might well be valued at less than £50,000 in which case the fixed costs would be £18,750. I know which case would take longer to prepare and demand more senior representation.

Second, the proposed bands for fixed fees make no separate allowance for Counsel. If adopted, this would mean that every time a Solicitor chose to instruct Counsel, they would lose some of the costs from their own pot. The biggest profit would obviously be generated by using the most junior fee earners possible and never instructing Counsel. If the ideological intention is to create a fused profession, this would certainly be one step towards that goal.

Third, fixing costs by the value of the claim only makes for greater certainty if the value of the claim is known at the outset. In many personal injury cases, the value of the claim is not known at the outset. Sometimes it only crystallises with the updated Schedule of Loss and Counter-Schedule. On other occasions, the parties’ valuations remain poles apart at trial. If a case is reasonably prepared on the anticipation of achieving a certain value, but a key quantum witness fails to come up to proof, fixed costs would see the Solicitor’s costs plummet. Conversely, of course, finding a way to inflate the value of the claim, would see costs rise.

As a result, neither frustration with costs budgeting nor familiarity with the fast track regime is sufficient to persuade me that more fixed costs are a good idea. As an aside, those currently arguing for or against the application of fixed costs to cases which started out under the pre-action protocol for low value personal injury claims but are subsequently allocated to the multi-track, may be interested that throughout his speech Jackson LJ refers to the existing reforms introducing fixed fees to fast track personal injury cases. The issue raised in Qader v E-Sure - that the drafting of CPR 45.29A already allows fixed costs in some multi-track cases – was not addressed. On one view that might itself illustrate the difficulty in implementing a new scheme without unintended consequences.

Aidan Ellis
Temple Garden Chambers

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