Fixed costs in motor claims

Fixed costs in motor claims cases are where a motor claim settles without going to Court. The recoverable solicitors' costs for their time are fixed if the claim is:

• a road traffic accident;
• involves either personal injury worth £1,000 or more or total damages of £5,000 or more; and
• settles for £10,000 or less.

The solicitors' costs are the sum of £800 + 20% of all damages up to £5,000 + 155 of all damages above £5,000.  An additional 12.5% is payable if the client and solicitors are both based with central London.  A success fee of 12.55 is also allowed if the solicitor is acting on a conditional fee agreement.

Specific disbursements are also payable for the costs of obtaining:

• medical records;
• a medical report;
• an engineer's report;
• a police report;
• a DVLA search; and/or
• legal expenses insurance.

If the claim involves a child or person under disability the Court fees of applying for Court approval of the settlement and instructing a barrister on this can also be recovered.

3 main challenges have been brought against this agreement.  Firstly, solicitors sought to recover a percentage based on everything paid out and insurers tried to make direct payments to avoid having to pay a percentage.  It was held that the solicitors are only entitled to a percentage based on damages that they actively sought to recover for their client.

Secondly, insurers sought to argue they should only have to pay for the report and not the cost of a medico-legal agency obtaining the report.  This would have potentially removed medico-legal agencies from the equation.  The fear was that the old days when parties use "pet" experts who would always give favourable reports would return.  The Senior Costs Master has given the lead ruling confirming that it is the cost of obtaining the report, not just the report itself.  On the back of this fixed recoverable amounts for medical reports were also agreed.

Thirdly, solicitors tried to move the cost of attending infant settlement hearings to barristers and sought to recover this under the guise of instructing a barrister.  To date this has had limited success, but without a lead ruling they can continue to pursue the argument.

This system was introduced on the basis that it would be reviewed within a couple of years.  Since its introduction in 2004 no review has taken place.

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