For decades, the legal landscape has allowed for the recovery of reasonable costs in civil litigation. However, a shortfall often exists between costs charged by legal representatives to clients (solicitor/client charges) and those recoverable from the opposing party (between-the-parties costs). This shortfall can typically amount to around 20% to 30%.

 

For clinical negligence claimants who are deemed 'vulnerable,' perhaps, for example, with physical, psychological, social or language challenges, additional solicitor work may be necessary leading to higher overall costs.    The Civil Procedure Rules (CPR) acknowledge this by providing that “proportionate” between-the-parties costs should, amongst other things, take into account any costs that have been incurred due to a party’s vulnerability. So, whilst vulnerability related solicitor/client costs might increase, so to would the vulnerability related between-the-parties costs.

 

With the introduction of the Fixed Recoverable Costs regime on October 1, 2023 (FRCs), there are now genuine concerns that vulnerable parties may face restrictions to access to justice due to the between-the-parties being fixed compared to the solicitor/client remaining on a conventional costs (i.e. time spent/hourly rate) basis thereby increasing the solicitor/client shortfall. This article seeks to navigate through those concerns.

 

What does ‘vulnerability’ mean in the context of civil litigation?

 

Whilst not exhaustive, the factors identified in CPR.r.1 PD1A s.4, demonstrate that ‘vulnerability,’ in the context of civil proceedings, is extremely broad and could encompass a wide range of party and witness characteristics. Such characteristics may include:

 

• Age, immaturity or lack of understanding;

• Communication or language difficulties (including literacy);

• Physical disability or impairment, or health conditions;

• Mental health condition or significant impairment of any aspect of their intelligence or social functioning (including learning difficulties);

• The impact on them of the subject matter of, or facts relevant to, the case (an example being having witnessed a traumatic event relating to the case);

• Their relationship with a party or witness (examples being sexual assault, domestic abuse or intimidation (actual or perceived);

• Social, domestic or cultural circumstances.

 

Many legal practitioners do not routinely, formally identify vulnerable client’s nor do they separately quantify the additional time and costs associated with pursuing a claim for such clients. However, it is crucial to do so, as these factors not only affect solicitor/client cost liabilities but also the client’s ability to recover those costs on a between-the-parties basis.

 

What can legal practitioners do to embrace these reforms? 

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Firms must begin thinking about adapting their case management processes and establish procedures for the early identification of vulnerable parties or witnesses. It is important to understand that vulnerability can also evolve over the course of the claim for a variety of reasons such as changing social circumstances or developing health conditions. It is therefore advisable that these procedures should be revisited periodically throughout the case.

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Once a vulnerability is identified, it's important to assess whether it is likely to lead to additional work and costs. Separately identifying and recording such costs, should be considered as one way of addressing the solicitor/client and between-the-parties costs disparity. This becomes easier to do where those costs are disbursements, such as translation fees. However, recording additional vulnerability related solicitor time can pose challenges, but a failure to do so could jeopardise cost recovery between parties.

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A best practice approach, therefore, might be to separately record vulnerability-related time costs, similar to how time is recorded for litigation phases in cost management and budgeting. This allows legal practitioners to more easily identify and therefore justify costs to clients and meet proportionality considerations in cost claims between the parties at the end of the case.

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Despite potential higher solicitor/client costs due to vulnerability, the costs recovered between-the-parties  in respect of claims between £25,0000 and £100,000 is now fixed, potentially leading to an even greater shortfall between solicitor/client costs and recoverable costs between the parties.

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A procedure does exist to attempt to recover any additional costs for vulnerability-related work that exceeds FRCs by at least 20%. However, failure to meet this threshold may result in vulnerable parties bearing not only their own additional costs for pursuing the process but may also create an adverse costs liability for unsuccessfully engaging the procedure. For this reason, the system that aims to address cost disparities for vulnerable parties, introduces uncertainties and access to justice concerns. It is realistic to suppose that burdensome procedures for recovering additional costs may deter solicitors from representing vulnerable clients altogether.

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What can a legal representative do when acting for a vulnerable Claimant?

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One option is for firms to specify in their engagement contracts and client care letters that clients are responsible for any additional vulnerability-related costs, even if they are not recovered. However, this approach could be seen as commercially unappealing for firms wishing to support vulnerable clients.

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Alternatively, firms could agree to absorb these costs if they are not recovered, but this then can create financial challenges to firms.

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The main issue for practitioners under the fixed recoverable costs regime is the fact that a vulnerable client's additional cost recovery will not be determined until the case concludes, which many say is unacceptable, reduces access to justice and potentially impacts on a party’s human rights. Firms could address this issue early in the litigation process by notifying opponents of the client's vulnerability and requesting exemptions from Fixed Recoverable Costs. Alternatively, they could seek court intervention to manage the case differently to mitigate the FRC impact, such as seeking allocation to the Multi Track. 

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If you or your firm has any queries or quandaries in relation to managing vulnerable clients in the fixed recoverable costs world, Kain Knight are here to help.  Kain Knight launched ‘FRCConnect’ last year, giving members access to chat groups, resources, and an intuitive fixed costs calculator.  To become a member and join the fixed costs community register for free now at frcconnect.co.uk or download the App in the Apple Store.