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DISEASE LITIGATION -
FIXED FEES
The news that an agreement had been reached on fixed
recoverable success fees for employers’ liability
disease cases was widely welcomed by the legal
profession1 . The agreement will be
implemented by the Civil Procedure Rule Committee
and will be implemented in October 2005.
The new agreement will fix the success fee paid by a
defendant’s insurer to the claimant’s solicitor or
barrister where they are funded by a conditional fee
agreement (‘no win no fee’ agreement).
The agreement follows two similar schemes for Road
Traffic Accidents and Accidents at Work cases and is
a positive move which will set in stone the question
of success fees in one more area where liability is
agreed.
Provisions of the Agreement2
-
27.5 % success fees
in claims arising from asbestos related diseases
(or 30% if the claim falls under s.30 Access to
Justice Act)
-
62.5 % success fees
in claims arising from deafness, vibration white
finger and other diseases except stress and
repetitive strain injury cases
-
100% success fee in
claims arising from stress and repetitive strain
injury.
-
Counsel’s fees
should follow the same basic structure as for
RTA and employers liability cases with the
following success fees:
-
Fast track
-
14 days or less
before trial – 50% for asbestos claim, 62.5%
for deafness etc and 100% for RSI & stress
-
The relevant
success fee applicable to solicitors for
claims that conclude more than 14 days
before trial
-
Multi track
-
Parties can seek to
escape the fixed success fee provisions and seek
an alternative success fee if the claim is
greater than £250,000.00
The need for an
exceptionality clause and its precise working with
regard to test case litigation will be discussed
over the next few months. Therefore, the main part
of the agreement as above would come into force in
October 2005 with the remaining exceptionality
provision, if appropriate, implemented in April
2006.
Implications
The flexibility of the new agreement means that it
will be possible to recover success fees depending
on the type of claim being bought.
The aims of the new agreement are to detract from
the focus on costs, leaving the courts to focus on
dealing with cases on their merits rather than the
costs involved3 . Whilst some
commentators argue that the fixed fees do not take
into account the volume of work involved in
investigating cases4 for the majority of
cases more structured environment will prevail.
The outstanding issue of exceptionality is yet to be
finalised and may not be implemented until 2006
which has disappointed some including APIL’s
president Allan Gore QC. The fact that the agreement
has not been wholly concluded has left a residual
uncertainty in some areas, where some commentators
have suggested that the risk profile in test cases
has the potential to change overnight. The
exceptionality clause will therefore play a vital
role in removing those cases affected by test cases
from the provisions of the scheme.
Insurance
The conditional fee market is strongly linked to the
insurance market and in particular, the availability
of competitive after-the-event- insurance (AEI).
Generally, policies are either individually
underwritten or issued under delegated authority.
Policies arranged under delegated authority provide
for automatic cover on the basis that the insurance
company has already assessed the firm. Individually
underwritten policies are issued on a case-by-case
basis.
The defendant’s insurer will also benefit from the
new scheme. There will no longer be any uncertainty
regarding the success fee which many claimant
solicitors do not divulge in order to conceal their
assessment of the cases chances of success.
Clearly, the immergence of the fixed recoverable
success fee in most disease cases has implications
for the insurance market. Except for those cases
subject to the exceptionality clause, policies can
take on a more structured format and the risk will
be reflected in the fixed fee from the outset.
1. Gazette, 7th July
2005
2. Civil Justice Council , Press Release, 1st July
2005
3. Lord Phillips of Worth, Master of the Rolls, Head
of the Civil Justice Council
4. Gazette, 18th August 2005, Jon Robins
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