Watch this space - civil justice reforms on the horizon

This year has been a busy one for civil justice developments. 2023 kicked off with the eagerly anticipated Ministry of Justice (MoJ) call for evidence on dual or multiple personal injury discount rates (PIDR) in England and Wales. This was followed by the devolved administrations in Scotland and Northern Ireland issuing a joint request for views over the summer.

We also saw fundamental changes to the qualified one-way costs shifting (QOCS) regime for claims issued on or after 6 April. In May, the Civil Justice Council (CJC) published its final report on its holistic costs review, the recommendations of which have been endorsed by Sir Geoffrey Vos, Master of the Rolls.

In July the MoJ confirmed that mediation will become compulsory for cases allocated to the small claims track valued up to £10,000. A date for implementation is awaited. The following month, the CJC working group published its Part one response on the topic of pre-action protocols and digitisation. Part two is awaited.

In a report published in September, the Justice Committee warned of a growing number of unresolved cases in the Official Injury Claim (OIC) portal. In response, the UK Government confirmed that “additional data will be published from January 2024 to help to provide greater clarity on the impact of dormant claims on outstanding claim volumes.”

Representing a step change in the civil litigation landscape, new fixed recoverable costs (FRC) rules came into force for most civil cases up to £100,000 in value on 1 October. We expect this will give rise to substantial litigation as parties seek to control, or maximise, these costs.

These topics will continue to inform the civil justice agenda throughout 2024. Here, we reflect on the key developments of 2023, along with what to look out for next year.

Personal injury discount rate – a second call for evidence is imminent

At a stakeholder event on 28 November 2023 hosted by the MoJ, a second call for evidence on the personal injury discount rate (PIDR) in England and Wales was discussed. This will likely be launched in December before the Christmas recess. It is anticipated that the period for submitting responses will be three months, although this may be shortened slightly.

It is not thought that the call for evidence will suggest or recommend a preferred PIDR model/rate(s), but rather will focus on gathering as much data as possible to assist the expert panel with advising the Lord Chancellor.

As the next formal review of the PIDR must begin by 15 July 2024, stakeholders should expect the announcement of the new rate(s) by 11 January 2025 at the latest, as the Civil Liability Act 2018 allows up to 180 days for this process.

Separately, the Scottish Government and the Department of Justice in Northern Ireland are due to publish separate responses by the end of the year following a joint request for views on the PIDR systems published in June.

FRC to be uprated for inflation from April 2024

FRC now apply to most civil litigation claims in England and Wales valued up to £100,000.

The extension of the regime on 1 October 2023 applies to personal injury claims where the cause of action occurs after 1 October 2023, and to non-injury claims issued after this date.

Speaking at the Civil Justice Council’s national annual forum on 17 November Alex Chalk, Lord Chancellor and Secretary of State for Justice, acknowledged that there are concerns around the level at which the costs have been set. He noted: “the figures for the costs were based on data analysis and consultation and we have uprated them for inflation and I can confirm that we will do so again from April next year. We will continue to keep the regime under review.”

A FRC system for clinical negligence claims valued between £1,001 to £25,000 is also expected to come into force in April 2024.

You can find our FRC calculator here. This helps calculate and forecast the amount of legal costs a winning party can recover from a losing party at different stages of a claim.

Guideline hourly rates (GHR) on the move

GHR will increase from 1 January 2024 in accordance with the Services Producer Price Index. They will then be uplifted annually using the SPI.

Grade Fee earner London 1 London 2 London 3 National 1 National 2
A Solicitors and legal executives with over 8 years' experience £546
B Solicitors and legal executives with over 4 years' experience £371
C Other solicitors or legal executives and fee earners of equivalent experience £288
D Trainee solicitors, paralegals and other fee earners £198

(New Guideline Hourly Rates are listed above with previous rates in brackets)

Sir Geoffrey also intends to establish a further working group to examine the methodology underpinning future guideline hourly rates.

Pre-action protocols (PAPs) – ignore at your peril!

Compliance with the PAPs will become even more important if the recommendations of the CJC are implemented.

The CJC working group published its Part one response on 21 August 2023 following an interim report and consultation which closed in January 2022. The report looks at the potential benefits of digitising pre-action processes and a general PAP.

The working group makes numerous recommendations including the creation of a new General PAP to replace the existing Practice Direction Pre-Action Conduct with compliance to be made mandatory except in urgent cases. The report proposes that the MoJ should look at the feasibility of developing a general on-line portal linked to the main PAP steps but capable of being linked to existing on-line portals such as OCMC and damages claims. The CJC also recommends an obligation to engage in pre-action dispute resolution, with a default obligation to hold a confidential pre-action meeting if the parties cannot agree on an appropriate dispute resolution process.

The group’s Part two response, for which no timeframe has been announced, will focus on potential reforms to specific PAPs and the creation of new ones.

As the CJC’s role is an advisory one, it will be a matter for the Civil Procedure Rules Committee (CPRC) to decide whether the recommendations are implemented. Any reform is likely to follow the Part two response and is not expected soon.

Fully integrating ‘alternative’ dispute resolution into the civil justice system

For some time both the government and senior judiciary have been expressing their support for integrating what has now been renamed ‘negotiated dispute resolution’ (NDR) processes, such as mediation into the civil justice system. Looking ahead, it will be increasingly important to proactively seek and engage with these processes.

Earlier this year the MoJ confirmed that mediation will become compulsory for cases allocated to the small claims track valued at up to £10,000, issued under Part 7 of the Civil Procedure Rules. The announcement follows a MoJ consultation which closed on 4 October 2022.

No concrete timeline has been offered by the Government for implementation. However, as the changes will require amendments to the Civil Procedure Rules which will need to be considered by the CPRC, it is expected that the changes will come into effect during 2024.

In a pivotal judgment in the role of the courts in directing the use of NDR, on 29 November 2023 the Court of Appeal handed down its judgment in Churchill v Merthyr Tydfil County Borough Council. The Court found that judges can lawfully stay proceedings for the parties to engage in non-court-based dispute resolution, provided the power is exercised in a way that does not impair the very essence of the claimant’s Article 6 of the Human Rights Act 1998 (right to a fair trial).

Expect pilots on costs budgeting

At the CJC’s national annual forum, Sir Geoffrey accepted that a “one size does not necessarily fit all” when it comes to cost budgeting. He confirmed that the CPRC will pilot a scheme to apply different approaches between different areas of civil justice which is likely to be tested in selected courts next year.

Related items:

Related content