High Court case rules against fixed legal fees

February 24, 2017

A High Court appeal has cast doubt on the government’s plans to introduce fixed legal fees, just a day after the Ministry of Justice unveiled its intention to cap whiplash payouts.

The Court of Appeal case of Merrix v Heart of England NHS Trust saw the claimant successfully argue that the current system of cost budgeting would be sufficient to gather fair fees. The appellant judge agreed with the claimant’s assertion that a budget fixed the amount of recoverable costs, which should only be reduced if there is good reason.

The result calls into question the government’s proposed changes to introduce a number of fixed cost measures, with the aim of stopping the so-called ‘compensation culture’ in the UK.

Yesterday, the Ministry of Justice revealed plans to raise the small claims track from £1,000 to £5,000 for all road traffic accident related injuries as part of the Prisons and Court Bill, as well as introducing a ban on claims without medical evidence. The announcement was a result of the government’s consultation on personal injury reform, which closed last month.

This has been a key focus for the government in recent months, and also follows a recent Department of Health consultation into fixed costs in medical negligence claims up to £25,000, as well as a review by Lord Justice Jackson of caps for all civil litigation with a value up to £250,000.

The claimant was represented by John Foy QC of 9, Gough Square and Daniel Frieze of St John’s Buildings, while solicitors for the claimant were Irwin Mitchell.

Daniel Frieze, barrister and head of the personal injury group at St John’s Buildings, said: “This ruling clearly shows the government that continued wholesale changes to solicitors’ costs may be an unwelcome distraction. In particular, the time, effort, judicial and lawyer training should not be thrown out to pursue an agenda which many consider riddled with self-interest and short-term political gains.

“Cases like this also emphasise that the present cost regime is working, and will hopefully force those in positions of power to rethink their approach. The current system is underpinned by the notion of fairness, and the focus should be placed firmly on tweaking the current system to prevent misuse, rather than attempting wholesale change.”

Read the full judgment here.