Page 9 - PIC-Magazine-Issue-22-Spring-Summer
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 New Fixed Costs Levels
These will be as follows:
For standard track claims – work costs will be £7,000 plus 30% of damages.
For light-track claims – where liability and causation are admitted, the fee for all stages will be £3,250 plus 20.5% of damages.
The additional bolt-on fee for protected parties has increased to £1,800 for cases involving Protected Parties and Children.
At the time of writing, the consultation with respect to disbursements was reopened
as a result of one question being omitted from the original survey.
The government made it clear that consultation regarding disbursements only supplements the original fixed costs consultation.
As things stand, the government proposes the following approach to disbursements:
Expert Report fees will remain recoverable.
ATE premiums covering the costs of expert reports will be separately recoverable.
Counsel fees in relation Part
8 approval hearings will be recoverable in relation to claims of Protected Parties and Children.
Counsel fees and court fees will not be recoverable, the only exception considered being the proceedings issue fee as a result of limitation.
The wording makes it specific that no other disbursements will be considered as recoverable.
Potential Delay
with Introduction
As a result of the additional consultation needed in terms of fixed recoverable disbursements for clinical negligence cases (together with establishment of a sub-committee of the Civil Procedure Rules Committee whose role is to scrutinise further proposed rules) it is now expected (again, at the time of writing) that there will be a delay in implementing the new fixed costs rules for at least another 6 months. Spring & Summer 2024 PARTNERS IN COSTS
   The fixed costs regime will be applicable to all cases notified on or after 6th April 2024. Stillbirth and neonatal death claims are excluded from the new costs regime.
Disbursement funding – what are the options available
for your clients and your firm?
We’re all looking at ways to save money and law firms should be too. Interest rates are expected to remain high for some time yet. Therefore, it could well be timely to consider what disbursement funding options are available for your clients to utilise.
1. On Balance Sheet Lending
A strange concept when it comes to disbursement funding – particularly
if you are looking to remove from your balance sheet any costs that can be passed on elsewhere. If an ATE provider is offering lending along these lines, note that there is still a cost to pay – which may defeat the object of the exercise? One provider offers this solution at an interest rate of 13%.
When it comes to adding layers of complication, third-party funder involvement is exactly that - and the question should be asked – ‘Is this model really sustainable?’
2. Increased ATE Insurance Premiums
Here, effectively, clients are being offered disbursement funding in return for increased ATE premiums. It is important to question if another provider says their solution is free of interest. Often ATE premiums are inflated to access that facility, sometimes at a higher rate than current interest rates in the market. Additionally, with this type of arrangement, the amount of funds accessible may not be enough to fund the case to its conclusion.
3. Tapered Administration Fees
Other providers may charge tapered administration fees, payable by your law firm at the end of a case and only upon a successful outcome. This also seems to go against the reason a law firm wants disbursement funding as well as also ‘disguising’ interest. The point of disbursement funding is to get the balance of disbursements off your book of business; granted, this solution does that – but the question is ‘At whose cost?’
With options 2) and 3), do consider what other services your law firm is being tied into. It could be pagination services or medical agencies. There may also be the imposition of additional reporting requirements, which ironically, adds an additional extra layer of complication/administration.
4. Consumer Credit Agreements (CCAs)
The common consensus has always been that CCA’s are said to add an additional layer of complication to discussions with clients, but experience has shown this not necessarily the case - with many law firms finding the process streamlined and straightforward. CCA’s also come with some specific benefits for a client - it allows them to access funds they may not have been able to access previously plus defer the repayment until the end of the case, and then only upon a successful outcome.
Fixed costs are likely to be introduced as outlined above but it is doubtful the reforms will stop there – various agencies will likely be reviewing the availability of their deferred terms agreements; a consequence of this could be that payments will need to be made sooner.
Choose wisely and the financial benefits can be significant – to both your clients and your firm.

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