MoJ to cut lawyers' RTA fixed recoverable costs to £500

From the end of April, the Ministry of Justice will reduce fixed lawyers’ recoverable costs to £500, from £1,200, for handling road traffic accident (RTA) personal injury (PI) claims valued below £10,000.

Further, from the end of July, the portal will also be extended.

The portal, which handles the lowest value RTA PI claims, will deal with claims up to a value of £25,000 instead of the current £10,000 cap. It will also include employer’s liability (EL) and public liability (PL) claims and be renamed Claims Portal.  

The RTA Portal extension was originally planned for April.

In addition, the ministry will impose new fixed recoverable costs for the extended RTA portal from the end of July.

Under the new regime, lawyers will recover fixed costs of £800 for RTA PI claims of between £10,000 and £25,000.

For EL and PL claims of up to £10,000, the costs will be £900, and for EL and PL claims of up to 25,000, the costs will be £1,600.

The changes follow a consultation and come despite strong opposition from lawyers.

The ministry said in its post-consultation response that the consultation responses had provided “insufficient evidence” that a £500 fixed recoverable costs did not reflect the amount and nature of work required in handling claims of up to £10,000.

Cutting the said costs is considered a key component of reducing bodily injury claims inflation. The insurance industry argues that, among other factors, the previous fixed costs levels enabled lawyers to afford referral fees to companies referring information about accidents to them, which in turn results in more claims.