MITIGATING THE IMPACT OF THE COURT FEES INCREASE 1: LIMITATION STANDSTILL AGREEMENTS
The general view of the court fee increases is well known. The increases are based on inadequate research and will have a major detrimental effect on the economy as well as the interests of justice. Since the increases are likely to come into force soon it is important that litigators examine ways to mitigate the effect of the increase.
This is the first of a series of posts dealing with ways of mitigating the impact of the increases.
The first, and most obvious way, is not to issue at all. If the matter is likely to be resolved but prognosis is uncertain then the most obvious way is to enter into a “limitation standstill” agreement.
LIMITATION STANDSTILL AGREEMENTS
There is some useful guidance to be found online.
- There is an interesting discussion of the case law by Tim Hirst of Park Lane Plowden in Can the Limitation Act Really be Suspended? Tim reviews the relevant case law and suggests that, to be certain, a clear admission of liability is necessary.
- It is of crucial importance that any agreement be in writing and in clear terms. See the problems that occurred for the claimant in Excel Polymers Ltd -v- Achillesmark Limited  EWHC 1927 (QB)
- An example of a “standstill” agreement can be found in the Lexis PSL Personal Injury site (this is behind a pay wall but you can register for a free trial).
- Practical Law also has a standstill agreement (with drafting notes) again behind a paywall with the opportunity to request a free trial.
GET IT IN WRITING AND MAKE THE TERMS ABSOLUTELY CLEAR
It is wise to turn to one of the precedents.
- Any agreement must be in writing.
- It should clearly describe the parties and the dispute.
- The date of the termination of the agreement must be clear and set out with precision. (For instance a “further six months” can be construed as six months from the date of the agreement or six months from the date of the expiry of the limitation period).
There may be problems in agreeing extensions of time in relation to accidents relating to air travel and similar issues. After two years the right of action is extinguished. Great caution is needed.
How would a standstill help? It would simply mean that, if the client does eventually have to issue, he will have to pay the higher fee. Surely, the more obvious method would be to agree to issue before the rise with a stay thereafter?
The problem with any of these methods is that courts do not like litigants/lawyers messing about with the rules. No solicitor is likely to get sued for playing it by the book. If the case is not at the issue stage, don’t issue it (because you may be criticised for doing so). If the fees go up in the meantime, that is not the lawyer’s fault: he/she is hardly likely to be regarded as negligent for not commencing proceedings which did not need to be commenced.
I think the central point is “if the client does eventually have to issue”. The issuing of proceedings is not inevitable in every case. Many (in fact most) personal injury actions settle without the need for proceedings. Proceedings are often issued because the limitation period is looming. If the parties believe that the matter is capable of settlement without the need for issue they can (and probably should where it is possible) agree a “standstill” agreement so that court fees are not incurred.
Of course there will be a flurry of activity and issuing over the next three days and if a claimant takes a view that it will be necessary to litigate then proceedings will need to be issued before next Monday.