Personal Injury Solicitors Discuss Low Value Personal Injuries And Fixed Costs
Posted on 2nd April 2020
MG Legal, your personal injury Solicitor Longridge, has often been asked by clients about our costs as paid by the third party in successful claims. It is, despite the system being said to be simple, quite complex and with a lot of “if that” or “when this happens” making changes all the time.
Any ‘standard’ Personal Injury claim should be started on the Ministry of Justice Portal for Low Value Personal Injury Claims. This is an online system which affords insurance companies the opportunity to admit liability early, in exchange for which, the Claimant’s recoverable costs (those payable by the fault party insurer) are capped. For Road Traffic Accident claims this is £500.00+VAT and for Employer’s or Public Liability Cases this is £900.00+VAT. These costs are the maximum that an insurer can be asked to pay irrespective of the length of time taken to settle the claim, provide it remains of “Low Value”.
When a claim is “on Portal” there is no real communication between parties, instead “Settlement Packs” are sent back and forth, until negotiations either meet in the middle or there is an impasse and the Court are required to assess the claim.
How low is Low Value Personal Injury?
Personal Injury is generally deemed to be of “Low Value” when it falls below £25,000.00. This is, in the grand scheme of things, a lot of money and not what most people imagine when “Low Value” is mentioned. Things get more complicated in that the £25,000.00 threshold must also include any other losses such as lost earnings, care costs, treatment costs and travel expenses, but it does not, for Road Traffic Accidents, cover the value of the repair costs or pre-accident value of the Claimant’s vehicle.
What if the claim’s value exceeds £25,000.00?
If the value of the claim, exceeding any vehicle related costs, exceeds £25,000.00 the claim is removed from the “portal process” and it dealt with under the ‘standard’ Pre-Action Protocols, which, unlike the portal, allows the parties to communicate in the more usual way, via letters, emails and telephone calls. Here at MG Legal, your personal injury Solicitor Longridge, we prefer this to happen as it means we can take a much more ‘hands on’ approach to your claim and apply pressure to the third party to move matters along more swiftly and also to increase the damages we recover.
Does removing a claim from the Portal change the costs?
Yes, whether because liability was not admitted early or if the value of the claim is over £25,000.00, the costs change but they are now dealt with on another fixed scale, which entails higher costs. The costs are detailed on a fixed base amount, plus an increased percentage based on the value of the claim at the time of settlement.
Does issuing County Court Proceedings change the costs?
Yes, in that the costs move up a scale of further fixed costs based on which stage in the Court process the claim has reached. Again, the incentive is for the fault party to settle the claim early as they know what level of costs they must pay at each stage. The later the claim settles, the more costs they have to pay.
What happens if the value exceeds £25,000.00 later in the claim?
Costs remain on the fixed scale, as per the Court Proceedings above. The percentage paid on the costs simply increases in line with the damages. So, for example, the claim is Road Traffic Accident and it reaches Trial, the third party must pay £2655.00 plus 20% of the value of the damages, plus VAT. So, if a claim was settled for £100,000.00 the third party would have to pay £2655.00, plus £20,000.00, plus VAT. It is rare, but not unheard of, for claims to exceed £25,000.00 by this much when they did not look like they would at the outset.
So, are costs ever not fixed in Personal Injury?
Only if, at the very outset, the Claimant’s Solicitor believes the claim will exceed £25,000.00 and so, instead of submitting the claim via the MOJ Portal, they wrote a formal Letter of Claim. If the Claim subsequently settles for more than £25,000.00, costs are recovered on the ‘traditional’ basis of a bill based on the number of hours worked on the file.
If the Claim is started by Letter of Claim and it subsequently settles for £25,000.00 or less, then fixed costs once more apply.
Why is it so complicated?
Unfortunately, nothing in the legal world is ever as straight forward as we would wish. The current system is the result of a gradual change over the course of the last twenty years. The outcome of years of lobbying by insurance companies to reduce legal fees and to some degree of the legal world pushing back.
To confuse matters further, various aspects were left open to interpretation and it is only in the last year or two that the Courts have ruled on certain points to confirm how they should be interpreted.
Ultimately, does it affect me as a client?
Not really, your Solicitor’s costs, whilst strictly speaking are your costs, are those that your solicitor will accept for working on your claim, plus any success fee detailed in your Conditional Fee Agreement. Fortunately, the damages aspect of the claim will settle first and then it is for your Solicitor to argue their costs, if argument is needed.
How do I instruct MG Legal?
Get in touch with us by phone, email, web-contact form or at any of our offices in Lancaster, Garstang or Longridge and we will put you through to the correct specialist department. We will discuss your requirements and look to get paperwork or a quote out to you the same day.
MG Legal, your personal injury Solicitor Longridge, aims to accept all Personal Injury claims on a Conditional Fee Agreement (no win, no fee agreement) basis and the vast majority of our other services can be offered on a fixed fee basis. Contact MG Legal to discuss your needs and we will look to get the ball rolling the same day.
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