High Court rejects challenge from claimant lawyers over personal injury fee cuts

The High Court has thrown out a challenge to the new fixed costs structure for personal injury claims, after the Government pushed through reforms which are set to have a significant impact on the earnings of law firms handling employers’ liability, public liability and motor claims.

The Association of Personal Injury Lawyers (APIL) and the Motor Accident Solicitors Society (MASS) contested a decision made by the Ministry of Justice to significantly reduce the fees recoverable by lawyers for cases managed through the road traffic accident (RTA) Portal, the online system via which low value personal injury claims are processed.

Following a period of consultation, the Government last week confirmed that from the end of April, the basic RTA Portal fee – which covers claims up to £10,000 – will be cut from £1,200 to £500.

Both APIL and MASS argued that claimant representatives were not invited to the Prime Minister’s insurance summit on 14 February last year, when they believe the decision to amend the fees structure was taken.

However, Lord Justice Elias told the court the Government had settled on the changes in 2011 and was free to consult with parties of its own choosing.

In a statement, APIL said: “As the Government has now decided to slash lawyers’ fees in the road traffic accident claims process, many people will be left on their own to negotiate with insurers for fair and proper compensation for their injuries. The vast majority of injured people have no knowledge of what their injuries are ‘worth’ in terms of damages, so such negotiations will inevitably be biased in favour of the insurers.

“Many vulnerable victims of injury will now find it impossible to obtain independent legal representation as a result of [this] bitterly disappointing judgment.”

The RTA Portal was originally set up to enable claimant and defendant representatives to exchange information and documents required to process low value personal injury claims quickly and efficiently.

The value threshold of claims handled by the RTA Portal will in July be raised from £10,000 to £25,000, with cases in this higher bracket incurring a fixed cost of £800.

At the same time, the portal is set to be renamed Claims Portal and will cover employer’s liability and public liability claims for the first time, with basic costs set at £900 and upper costs £1,600.

Justice Secretary Chris Grayling said: “I’m pleased the independent judicial review has dismissed this challenge. Our proposals, along with our wider reforms, are intended to bring more balance to the civil claims system, make lawyers’ costs proportionate and in turn create an environment where insurers can pass on savings to their customers through lower premiums.”