The government has proposed an arbitrary 60 per cent reduction for fixed recoverable costs in RTA portal claims. The Ministry of Justice wants to cut fixed recoverable costs for claims up to £10,000 through the RTA Portal from £1,200 to £500. For claims valued up to £25,000, fixed costs will be set at £800.
The government claims that the forthcoming ban on referral fees is the reason behind the decision but no evidence has been provided to support this.
We believe the government's argument is flawed for a number of reasons:
- The reduction takes no account of increased marketing costs – while the payment of referral fees will be prohibited following the implementation of the ban, the government's logic takes no account of the corresponding increase in the amount paid for conventional forms of advertising which, unlike referral fees, give no guarantee of results.
- For many firms RTA claims will cease to be economically feasible, threatening access to justice – The likely result will be that many solicitors will not be able to afford to carry on doing this type of work. There is a danger that if firms cease to undertake RTA claims it will have a detrimental impact on access to justice for accident victims.
- Quality of service to the public will be put at risk – Those firms continuing to operate in the RTA claims market will, by necessity, have to make greater use of paralegals or untrained staff. It is unfortunately inevitable that the quality of legal services provided to the public will be reduced.
The size of the cuts may force many solicitors to stop doing lower value and less complex personal injury work.
We will be responding robustly to the government's call for evidence in relation to the portal cuts.
Let us know your views
We'd like to know your views on the proposals to help our response to the call for evidence. Please help us by answering these questions:
- Do you carry out personal injury work and pay referral fees?
- Do you pay other marketing costs for personal injury work?
- If the answer to 1 is yes – will you pay more or less on other marketing costs when referral fees are prohibited?
- If the answer to 2 is yes – can you say how much is spent on average per case?
Please send your replies, together with any other comments on the proposals to: insidetrack@lawsociety.org.uk.
Lobby your MP
We have prepared a briefing pack for solicitors who may also wish to lobby their MP.
Download the briefing pack (PDF)