Changes in Civil Legal Aid - The effect on Personal Injury in the Sheriff Court

Judge's gavel

David Wilson, Digby Brown Partner, considers the implications of limitations on civil legal aid that took effect on March 21 2013, on personal injury cases in the Sheriff Court. 

On 27 February 2013 the Scottish Legal Aid Board announced limitations to the grant of civil legal aid.  These will apply to all civil legal aid applications made after 21 March 2013.  For personal injury matters in the Sheriff Court expenditure on solicitors fees, outlays and Counsel’s fees will be restricted to £4,000 net of VAT in general reparation matters and for £10,000 in medical negligence.  In the Court of Session the restriction is limited to £25,000 for general reparation matters and £35,000 for medical negligence.

The Scottish Legal Aid Board assure us that additional expenditure will be granted “if appropriate and proportionate to the issues involved in the dispute”.

The effect of the changes in legal aid will make it extremely difficult for a legal aid client to obtain effective representation in a personal injury matter.  Never will this be more apparent than in the Sheriff Court. The Legal Aid Board justify the setting of the limits with reference to payment data covering a two year period.  Based on this data they have set the limits at around 80%/90% percentile of costs for each case category.  Their stated objective in doing so is to discourage unnecessary contentious litigation or unnecessary prolonged court actions. 

However the basis of the setting of the limits based on accounts paid is in my view flawed.  There is a difference between actual cost and potential cost which needs to be covered if legal aid is to be effective.  A claim on the legal aid board is likely to be made either when the case has been taken to proof and lost, the solicitor has not elected to accept the judicial expenses as full payment or the solicitor has abandoned the case prior to proof.  The Board has not provided the data for the types of claims the average is based on.  However any legal aid lawyer will confirm that it is uncommon for the solicitor not to accept judicial expenses when available in lieu of a legal aid account.  Furthermore with 98% of cases settling out of court I suspect the clear majority of account payments relate to cases abandoned prior to a proof hearing.  Consequently the average of accounts will not reflect the potential cost of taking a case to a hearing.  On the same day as the Scottish Legal Aid announcement the Scottish Government issued their consultation paper on the Civil Law Reform Bill.  In the paper the government acknowledged, “the typical costs in preparing for and conducting a three day civil proof in the sheriff court will be in the region of £7,000 to £10,000, together with the additional costs of expert witnesses and similar outlays”.  In light of this it would be absurdly optimistic for a solicitor to believe that a case could be conducted for £4,000 in all but the simplest of actions. 

It is extremely difficult to predict every twist and turn of a personal injury case when taking instructions at the commencement.  For example a pursuer as a passenger in a car may have suffered significant injury when the driver has lost control.  You may think a relatively straightforward action against the driver on liability.  However on intimation of the claim to the driver’s insurers they deny liability on the basis that the road was icy and had not been and should have been gritted.  The Council deny liability on the basis that they did not require to grit the road and any way there was no ice.  Expert testimony would require to be obtained from a meteorological specialist as well as the winter weather policy of the Council.  If the lawyer does not wish to withdraw from acting they will be left facing the risk of working for free and even paying experts out of their own pocket.

The limit of £4,000 will also discourage the use of vital expert testimony.  For example psychological injury is sadly common and often not straightforward.  The cost of an assessment by a consultant psychiatrist will range between £500 and £1,000.  Attending court to give evidence will usually cost even more.  If there is evidence of possible psychological injury a lawyer would be in breach of duty not to instruct such a report but it would be highly unlikely that in a defended personal injury action going to proof there would be funds to cover the cost of the report.  Lawyers will also find it difficult to conduct cases on legal aid if they require instructing other experts such as a road traffic investigator whose costs are likely to range between £600 and £2,000 for a report.  It may also be necessary to instruct a report on loss of employability which would cost about £1,500.  If the client has received significant help from relatives during the period of incapacity, a report assessing the services and costs will be needed.  Costs for these types of reports will be anything between £1,500 and £3,500.  When instructing an expert the solicitor will also have to budget for attendance of the expert at consultations and court.  Needless to say the instruction of Counsel on a budget of £4,000 in a defended Sheriff Court personal injury matter is now unthinkable.

Of course there is the possibility of seeking extra expenditure.  However the Legal Aid Board did not choose to clarify what they meant “by appropriate and proportionate”.  As the legal aid team for the Scottish Law Society have already pointed out “precisely when this discretion will be exercised will remain to be seen in practice”.   Consequently after 21st March a lawyer in the sheriff court when representing a client under a civil legal aid certificate will be obliged to advice their client that their representation is subject to funding.   They have the responsibility to represent their clients to the best of their ability.  If sanction is not forthcoming lawyers will be faced with either paying for outlays out of their own pockets, acting for free or withdrawing from acting.  I am also concerned that the fact that a client is on legal aid will encourage the defenders to be more contentious.  They will be aware that in many cases the client will not have sufficient cover to take the matter to proof and will therefore be under enormous pressure to settle the case at a discounted rate.  

Consequently, from 21 March 2013 the option of conducting all but the most simple personal injury actions in the Sheriff Court under a legal aid certificate will be fraught with danger.  The ability to properly represent a client is now dependent on the willingness of the legal aid board to extend expenditure beyond a limit that fails to represent a realistic estimate of the cost of representation.  It is clear that the purpose of the limit is simply to reduce costs without consideration of the consequences.  Justice capped is justice denied.