Chapter 10: watch this space
19 Sep 04
Enhanced Chapter 10 fees are coming, but their general acceptance by insurers depends on finalisation of a pre-action protocol
by Bruce Ritchie
In 2003 the Remuneration Committee undertook a review of the Society’s recommended Table of Fees. As a result of that Chapter 10 – Negotiated Settlements – was radically changed with the introduction of an investigation fee expressed in units as well as the existing percentage fees for negotiating and completing the settlement. At the same time the Civil Procedure Committee was considering a proposal to bring a pre-action protocol into Scotland on a voluntary basis based upon the protocol which has been in place in England and Wales following the Woolf reforms to the Civil Procedure Rules. A joint working party with representatives from both committees was formed to take these matters forward and to engage in dialogue with representatives of the insurers through their Scottish Claims Managers Forum. There have been two meetings with the claims managers at which considerable progress has been made. The principle of enhanced Chapter 10 fees has been accepted by the claims managers provided those are linked to the implementation of a voluntary protocol. Work is currently continuing on the drafting of such a protocol, and it is hoped that that will be completed within the next two months. In the meantime the claims managers have advised that they will only be prepared to consider solicitors’ fees on negotiated settlements “on the basis as these fees were considered prior to 1 January 2004”.
Until agreement is received claimant solicitors should establish at an early stage the basis on which a settlement fee will be paid by the insurer, and should consider whether litigation is appropriate if the client would be asked to meet a substantial shortfall between the fee that is chargeable and the fees which can be recovered.
Solicitors are of course free to charge the full Chapter 10 fee to their clients under a deduction of what can be recovered from the insurer. This does not apply to coal health claims which have been the subject of recent press publicity and in respect of which it is the Committee’s view that there is no justification for charging the client an additional fee to the fee recoverable under the Government scheme. There will be further updates in the Journal on a regular basis. In the meantime the new Table of Fees can be found in the Solicitors section of the Society’s website www.lawscot.org.uk.
Bruce Ritchie, Secretary to Remuneration and Civil Procedure Committees