Government cuts RTA costs by £700
Industry News : 22 November 2012
It has been revealed that low-level claims handled through the RTA Portal Scheme are set to have £700 from the fixed recoverable costs slashed by the government. According to figures released by the Ministry of Justice last week, solicitors will be able to claim £500 in costs for cases valued at up to £10,000, instead of the £1,200 which they can currently recover today.
Stage one claims will be worth £200 and stage two will be worth £300.
For public liability (PL) and employer liability (EL) claims, the maximum solicitors’ costs will be £900.
For RTA claims valued at up to £25,000, fixed recoverable costs will be capped at £800, with higher-level PL and EL claims being worth £1,600 in costs. The portal scheme is mandatory for all claims within scope where there has been admission of liability.
Today, the government opened a consultation on the figures. The new fees are set to be in place by next April, when the portal is extended to £25,000 and to PL and EL claims.
Helen Grant, the justice minister, explains in a letter to ‘stakeholders’ that the new costs take account of inflation since the portal was introduced in 2009. However, costs have been reduced to ‘reflect the forthcoming ban on referral fees’. It was argued by insurers that each referral was worth approximately £800 and lobbied to have that amount taken off of the fixed costs.
Members of the legal profession who negotiatiated with insurers when the costs were first set will be surprised by the size of the cut.
