APIL PI Focus: June 2013
Problems with the way fees are structured in the road traffic accident portal; what ‘fundamentally dishonest’ really means; and new tactics involving Part 36 were all discussed at a Westminster Legal Policy Forum seminar last month.
Mr Justice Ramsey, the judge in charge of the implementation of the Jackson reforms, shed some light on what is meant by ‘fundamentally dishonest’ in the context of qualified one-way costs shifting. Claimants will lose the benefit of QOCS protection if they are found to have been fundamentally dishonest – but practitioners have been uncertain as to what the phrase actually means.
Ramsey said: ‘This is designed to catch the situation where, for example, someone falls off some scaffolding [and makes a claim], and then there is a video showing them acting as a football referee. That is the sort of fundamentally dishonest case that we are trying to go against.’
But he drew a distinction between this and cases involving exaggeration. He said: ‘One of the concerns is that, if you have a small piece of exaggeration that is found out at trial and you are awarded a lower amount as a result, should you lose your QOCS protection? The thinking is, no. ‘It will depend on how it is interpreted. But… we do not want every single case where damages are cut down to then lose QOCS protection.’
Ramsey went on to discuss the meaning of ‘proportionate’ costs under the new proportionality rule. ‘Proportionate costs aren’t going to be reasonable and necessary costs under the current regime,’ he said. ‘You may say that “my proportionate costs are always necessary costs”. I think one has to re-think the relationship between the two… One of the major drivers of proportionate costs is the sums in issue in a case.’
The judge said that lawyers will need to re-assess the way they go about litigation. ‘In £1m claims, if you have to spend £500,000 on a particular area, then lawyers have to ask themselves, is this a proportionate way of trying to prove that case in court?’ he asked.
One delegate pointed out that insurers will often allege fraud, which makes it impossible for costs to be proportionate because significant investigation will be undertaken by both sides. Ramsey responded: ‘Obviously there are cases which are complex; and one of the aspects of proportionality is the complexity of the case. But even in fraud, the view has been taken that you can leave no stone unturned. My expectation is that the investigation [can be more limited].’
He added: ‘In low-value PI, because of the fundamental dishonesty [rule], there are likely to be a number of cases where there is an investigation into fraud. You will have to look at proportionality, not only in terms of the value, but also the complexity of the parties and the importance of the case to the individual.