Fixed Costs in Hearing Loss Claims? (1)
22 May 2019
The Courts and Tribunals Judiciary have recently appointment a working group to make recommendations to the Government on the possible implementation of fixed costs for Noise Induced Hearing loss (NIHL) claims. What this essentially means is that NIHL claims submissions could come under a whole new MOJ Portal Process.
The MoJ Portal is on online claim submissions process, where claims are submitted to Defendant insurers and dealt with entirely in that process. The Process is governed by “stages” of fixed costs of about £900 per case.
Currently, only single Defendant NIHL claims are dealt with in this process, which currently piggybacks on the Employers or Public Liability (EL/PL) process. If the single Defendant claim “falls out” of the process (i.e., is too complex for this process, the time limit expires or liability is denied), it then falls under another Pre-Action Protocol (the Disease and Illness Protocol) which sees standard costs applying, although an insurer can argue that fixed costs should apply.
For any more than one Defendant, the MoJ Portal is not fit for disease cases of this nature (as they are usually too complex), and therefore standard costs applies (by submitting a formal Letter of Claim outside the Portal process). Therefore, implementing the Working Party recommendations (found here) would mean a complete overhaul of how NIHL claims are submitted, how they are dealt with by both sides, and of course, how much Claimant solicitors get paid.
What’s changing exactly?
All single Defendant cases would come under a “new NIHL process”, essentially being submitted in the same manner as before – on the MoJ Portal. If the claim falls out of the Portal process, standard costs apply as before (and rightly so, as solicitors on both sides would have to do more work outside the Portal, which has always been a “fast track” method of dealing with claims). All claims against the military or over a value of £25,000 would fall outside the process and standard costs would apply.
For multi-Defendant claims of up to 3 Defendants (we are not sure why this is capped at 3 Defendants) would be governed by the new NIHL process. However, this is on the proviso that unless any Defendant:
1. Argues that the Claimant’s loss is De Minimis (for our article on De Minimis in NIHL claims, see our previous blog);
2. Requests their own audiogram;
3. Requests their own medical evidence, or;
4. Treats the claim as a “test case”
If the Defendant raises any of these issues while the claim is in the NIHL process, the claim would fall out of the process and standard costs would apply.
The new NIHL process would even deal with the different stages the claim reaches. The Working Party has come up with 4 main stages:
2A – Claim admitted in full, settles before preparation for issue of proceedings
2B – Claim admitted in full, settles after preparation for issue of proceedings
3A – Claim denied, settles before preparation for issue of proceedings
3B – Claim denied, settles after preparation for issue of proceedings
The costs table for each stage gives an idea of what sort of fixed costs Claimant solicitors would be looking at:
Stage 1 Defendant 2 Defendants 3 Defendants
2A £2,500 £3,000 £3,500
2B £3,000 £3,500 £4,000
3A £3,500 £4,000 £4,500
3B £4,000 £4,500 £5,000
All the figures are excluding VAT and disbursements, including Restoration fees (should it be necessary to restore a dissolved Defendant company to the register).
The new NIHL process would apply in post-litigation in the same manner as above, unless the Defendant raises any of the 4 issues above. Should they do so, the claims falls out of the fixed costs regime and standard costs apply. The same applies to military claims, multi-track claims and claims with a value of over £25,000.
If a claim is run under the new NIHL process at pre-litigation and falls out once the claim is litigated, pre-litigation costs are dealt with on a fixed basis (as per the table above), and post-litigation costs are paid on a standard basis.
Post-litigation fixed costs for a single-Defendant claim depends on what stage the claim settles, and have been suggested as follows:
Issued to Allocation Post-Allocation to listing Listing to Trial
£1,650 £1,656 £1,881
Again, this is in addition to VAT, disbursements and restoration fees.
Thoughts? Costs in NIHL cases are naturally higher than some other types of cases. With the direction NIHL cases have taken in the past few years, the waters have been muddied by both sides who argue over complex issues such as causation, De Minimis or limitation. Therefore, it is inevitable that Claimant solicitors’ bills can become high.
However, it seems the initial recommendations coming out of the Working Party’s report is that costs on the standard basis would only apply where case is relatively straightforward. If it becomes complex, it falls out of the process and does not apply. Because of this, the fixed costs of the most straightforward NIHL cases would not be a million miles away from standard costs in any event. If a Defendant raises issues that would inevitably complicate matters, the claim would fall out of the fixed costs process and standard costs would apply anyway. This is an extremely positive step in NIHL claims, and may persuade Defendants and their insurers to deal with NIHL claims in a more practical manner, not raising issues as a matter of course but only raising them if they need to be.
Whilst at first Claimant NIHL solicitors may quake in their boots at the thought of fixed costs being applied to NIHL cases, it seems a very practical step in order to encourage a much less adversarial or combative attitude between parties. In short, it will make dealing with NIHL claims much simpler, faster and cheaper, which can’t be a bad thing for Claimants, who may inevitably see their claim being dealt with in a more streamlined way than ever before.
Moral of the story? We could have had a simple fixed costs regime introduced years ago – instead, we have seen both sides slogging in the mud until now, instead of considering a more streamlined process of dealing with NIHL claims. Needless to say, The Association of British Insurers (ABI) is welcoming the potential changes.