MoD NIHL claims have become one of the most important industrial disease costs areas for claimant firms. The Matrix Agreement has helped many military hearing loss claims move towards damages settlement, but there is one point claimant solicitors must not lose sight of: the damages matrix is not, by itself, a cap on recoverable legal costs.
The matrix is concerned with the valuation and settlement of damages. It does not automatically turn a properly run MoD NIHL file into a low fixed-fee costs claim. It does not replace the Civil Procedure Rules. It does not remove the need for a properly drafted bill. And it does not mean claimant firms should accept a poor global costs offer just because the damages were resolved by reference to a matrix.
In 2026, the real costs issue is more practical:
Has the claimant firm prepared the costs file well enough to justify recovery on assessment or negotiation?
The Difference Between Damages and Costs
The most common mistake after a Matrix settlement is treating damages and costs as though they are the same thing. They are not.
Damages compensate the claimant for injury and loss. In MoD NIHL claims, that may include pain, suffering and loss of amenity, tinnitus, hearing aids, disadvantage on the labour market and other heads of loss depending on the evidence.
Costs are different. Costs are the legal costs of bringing the claim. They include the solicitor’s time, correspondence, disclosure work, expert evidence, review of service records, medical evidence, negotiation, advice, settlement work and assessment-related costs.
A matrix may assist with the damages valuation. That does not mean it also fixes the recoverable costs. Unless the parties have expressly agreed a global inclusive settlement, or have otherwise compromised costs, the claimant’s costs should still be dealt with separately under the applicable costs rules and the wording of the settlement agreement.
That distinction matters because MoD NIHL claims can require serious work before settlement is reached.
Why the Matrix Does Not Automatically Cap Costs
The Matrix Agreement is not the same as a fixed recoverable costs regime. It does not mean:
- costs are automatically limited to a set figure;
- the paying party can impose a low costs tariff;
- the claimant firm must accept a percentage of damages;
- expert and audiology costs are automatically unrecoverable;
- time spent reviewing service evidence is irrelevant;
- N252 cannot be served;
- a bill of costs cannot be prepared; or
- costs-only proceedings are unavailable.
The correct starting point is the settlement wording and the applicable rules.
If the settlement says the defendant will pay the claimant’s reasonable costs, to be assessed if not agreed, then costs remain open for assessment. If no proceedings have been issued and the amount of costs is not agreed, CPR 46.14 costs-only proceedings may be required.
The paying party may still argue reasonableness, proportionality, hourly rates, duplication and disbursements. But that is very different from saying the matrix caps the costs.
Are MoD NIHL Claims Subject to Fixed Costs?
Military NIHL claims need to be considered carefully because ordinary NIHL claims may fall within specific fixed costs provisions.
However, the NIHL fixed costs framework under the Disease and Illness Pre-Action Protocol includes an important exclusion for military claims. Claims by members of the armed forces in respect of their service career are excluded from that specific NIHL fixed costs route.
That is a major point for claimant firms.
A military hearing loss claim is not automatically treated like an ordinary low-value industrial NIHL claim against a civilian employer. The exposure evidence, service history, limitation issues, causation, audiology and medical evidence can all be different.
That does not mean every MoD NIHL bill will be paid in full. It means the paying party should not simply say “matrix settlement” or “NIHL fixed costs” and then treat the bill as capped. The file still has to be assessed on its own facts.
Standard Basis Still Requires a Strong Bill
If costs are recoverable on the standard basis, the court will only allow costs that are reasonable and proportionate. That is the key point.
Standard basis recovery does not mean automatic recovery. It means the receiving party must be ready to justify the work. In MoD NIHL files, paying parties commonly challenge:
- hourly rates;
- Grade A or Grade B involvement;
- excessive routine correspondence;
- duplicated work between fee earners;
- time spent reviewing records;
- medical evidence costs;
- audiology evidence;
- counsel’s fees;
- block billing;
- vague telephone entries;
- time spent after damages became capable of settlement;
- proportionality against the damages figure;
- lack of clear chronology; and
- whether all work was necessary to achieve the outcome.
The matrix may make damages settlement more structured, but it does not make the costs file immune from attack. That is why claimant firms should avoid sending generic bills. A MoD NIHL bill needs to explain why the work was necessary.
Why MoD NIHL Files Are Often Work-Heavy
Military hearing loss claims are not always simple. A properly handled MoD NIHL file may involve:
- taking detailed instructions on service history;
- identifying periods of noise exposure;
- considering weapons, vehicles, aircraft or engineering exposure;
- reviewing service records;
- considering limitation and knowledge;
- reviewing audiograms;
- arranging medical evidence;
- considering tinnitus;
- considering hearing aid evidence;
- considering employment impact;
- reviewing the effect of the Matrix Agreement;
- advising on damages;
- dealing with MoD correspondence;
- considering offers;
- advising on settlement;
- preparing the bill; and
- pursuing costs if not agreed.
That work is not automatically unreasonable simply because damages settle under a matrix. The bill should show the steps taken to move the file from instruction to settlement. If the bill does not explain that, the paying party will try to reduce it as routine or disproportionate.
The Main Costs Arguments After Matrix Settlement
1. “The damages were fixed, so costs should be low”
This is one of the weakest but most common arguments.
Even if damages are assessed by reference to a matrix, the solicitor still had to investigate the claim, obtain evidence, consider the client’s circumstances and advise on settlement.
The better answer is to make sure the bill separates damages valuation work from the wider claim work. If the file involved substantial service evidence, audiology issues, medical review or limitation considerations, the bill should make that clear.
2. “Costs are disproportionate to damages”
Proportionality is always a live risk.
Many NIHL claims settle for damages that are modest compared with the costs of investigation. That gives the paying party an easy argument. The response is not simply to say “standard basis”. The response is to explain:
- why the work was required;
- whether the claim involved military-specific issues;
- whether liability, limitation or causation had to be considered;
- whether medical evidence was required;
- whether the MoD delayed or took time to respond;
- whether the claimant required detailed advice;
- whether the file was impacted by Matrix developments; and
- whether the outcome justified the work.
A good bill should not leave proportionality to be guessed.
3. “The file was routine”
MoD NIHL claims may appear routine to a paying party, especially where they are handled in volume. But a volume workstream does not mean every file is identical.
The bill should identify the file-specific work. That may include the claimant’s service period, type of exposure, tinnitus, hearing aids, employment issues, limitation, settlement advice and any Matrix-specific calculation. If the entries are too generic, the paying party will say the file was processed rather than litigated.
4. “The hourly rates are too high”
Hourly rates remain a major battleground.
The paying party may accept some costs in principle but attack the grade and rate of the fee earners. Claimant firms should ensure the bill clearly identifies:
- each fee earner;
- grade;
- experience;
- role on the file;
- hourly rate claimed;
- whether the work was appropriate for that grade; and
- whether senior input was limited to supervision, technical review or settlement advice.
Routine chasing should not be charged at senior solicitor rates. Equally, complex advice on liability, causation, limitation or settlement should not be undervalued where senior input was genuinely required.
5. “The medical evidence was excessive”
Medical evidence is often central in MoD NIHL claims.
The paying party may challenge the cost of ENT evidence, audiology evidence, hearing aid evidence or further questions to experts. The best response is a clean evidence trail. The file should contain:
- the expert report;
- invoice;
- instruction letter;
- relevant audiograms;
- any hearing aid evidence;
- questions to the expert;
- responses from the expert;
- medical records where relevant; and
- evidence that the report assisted settlement.
Disbursements should not be left unexplained. If they were necessary to progress or settle the claim, the bill should show that.
The Importance of Settlement Wording
The wording of the settlement agreement is critical. Claimant firms should avoid any ambiguity between damages and costs. Before accepting settlement, check whether the offer is:
- damages only;
- damages plus reasonable costs;
- damages plus costs to be assessed if not agreed;
- a Part 36 offer;
- a global inclusive offer;
- inclusive of disbursements;
- inclusive of VAT;
- inclusive of assessment costs; or
- silent on costs.
A global inclusive settlement may prevent any later argument for additional costs. A damages-only settlement with costs to be agreed or assessed preserves the claimant’s costs position.
The problem often arises when the damages settlement is treated as the end of the matter and the costs wording is not checked carefully. That is where recovery can be lost.
What Should a MoD NIHL Bill Include?
A strong MoD NIHL bill should be drafted with the likely Points of Dispute in mind. It should usually include:
- a concise case summary;
- claimant service background;
- period of alleged exposure;
- summary of hearing loss and tinnitus issues;
- reference to Matrix settlement where relevant;
- settlement date and damages outcome;
- costs entitlement;
- chronology of key steps;
- fee earner details;
- hourly rates and grades;
- medical evidence chronology;
- audiology evidence;
- disbursement schedule;
- Part 36 or offer history;
- clear telephone entries;
- clear review entries;
- VAT position;
- proportionality narrative;
- N252 preparation; and
- Precedent S where required.
The bill should tell the story of the claim. It should not read like a list of disconnected administrative tasks.
Telephone Entries in MoD NIHL Bills
Telephone entries are a common area of attack. A paying party will often challenge repeated calls with the claimant as excessive unless the purpose is clear. Weak entries include:
- telephone call with client;
- call regarding update;
- call to discuss matter;
- client call;
- telephone attendance.
Better entries explain what was actually done, for example:
- taking instructions on service exposure;
- discussing tinnitus symptoms;
- confirming audiology appointment;
- explaining medical evidence;
- advising on Matrix settlement;
- taking instructions on offer;
- discussing hearing aid evidence;
- updating claimant on MoD response;
- explaining costs position after damages settlement.
The difference matters. A vague call looks like padding. A clear call shows necessary progression.
Reviewing Service Records and Evidence
MoD NIHL claims often involve service records, audiograms, exposure details and medical evidence. Paying parties may argue that review time is excessive, especially if several similar files are being handled by the same firm.
The bill should avoid generic review entries. It should explain the type of evidence reviewed and why it mattered. Examples include:
- reviewing service records to confirm period of exposure;
- considering audiograms against pleaded hearing loss;
- reviewing medical report on causation;
- considering tinnitus history;
- reviewing hearing aid recommendation;
- considering Matrix valuation;
- reviewing settlement offer against evidence.
This helps defend the time as file-specific rather than generic.
When Should N252 Be Served?
If costs are payable but not agreed, the receiving party will usually need to prepare and serve the bill with Notice of Commencement. For settled MoD NIHL claims, the practical sequence is usually:
- confirm damages settlement;
- check the costs wording;
- prepare the bill or electronic bill;
- serve N252;
- await Points of Dispute;
- prepare Replies where appropriate;
- negotiate settlement;
- issue or progress detailed assessment if required.
The timing should be managed properly. Delay after damages settlement gives the paying party an opportunity to slow the file further and can cause internal cashflow pressure for the claimant firm.
When Are CPR 46.14 Costs-Only Proceedings Needed?
CPR 46.14 costs-only proceedings may be needed where:
- the substantive MoD NIHL claim settled before proceedings were issued;
- the parties agreed who should pay costs;
- the amount of costs was not agreed;
- there is no existing costs order; and
- the claimant needs an order for costs to be assessed if not agreed.
This is a common issue where damages resolve pre-issue but costs remain outstanding. The Part 8 route should not be used casually, but claimant firms should not allow paying parties to delay indefinitely. Before issuing, make sure the file contains:
- written settlement terms;
- written agreement on costs liability;
- the bill or draft bill;
- costs correspondence;
- evidence that costs remain disputed;
- any offers made;
- any Points of Dispute; and
- a clear chronology of attempts to resolve costs.
A clean costs-only application is far more persuasive than a rushed one.
Why Low Global Costs Offers Should Be Treated Carefully
After Matrix settlement, paying parties may make early global offers for costs. Some will be commercial. Some will be tactical.
The danger for claimant firms is accepting a low offer because the damages side has concluded and the file feels finished. Before accepting any global costs offer, consider:
- the total bill value;
- likely reasonable reductions;
- disbursements;
- VAT;
- Part 36 risks;
- assessment costs;
- cashflow;
- proportionality;
- the strength of the evidence;
- the paying party’s conduct;
- whether a counter-offer is justified; and
- whether Part 8 may be required.
A fast settlement can be sensible. But it should be a commercial decision, not a concession based on a misunderstanding of the Matrix Agreement.
Practical Checklist for Claimant Solicitors
Before serving or negotiating MoD NIHL costs, check the following:
- Was the settlement damages-only or global inclusive?
- Is the defendant’s liability for costs confirmed in writing?
- Has the Matrix settlement been recorded correctly?
- Is there a clear chronology from instruction to settlement?
- Are service records and exposure evidence properly referenced?
- Are medical reports and invoices on file?
- Are audiology records and hearing aid evidence included where relevant?
- Are fee earner grades and hourly rates accurate?
- Are telephone calls properly described?
- Has routine work been separated from technical work?
- Are disbursements supported by invoices?
- Has proportionality been addressed?
- Is Precedent S required?
- Has N252 been prepared correctly?
- Is CPR 46.14 needed if costs remain unpaid?
This checklist should be completed before the bill is served, not after the paying party has already raised Points of Dispute.
So, Does the MoD NIHL Matrix Cap Your Costs?
No, not by itself.
The Matrix Agreement may assist with damages settlement, but it does not automatically cap the claimant’s recoverable legal costs. The costs position depends on the settlement wording, the applicable rules, the work actually done, the evidence available and whether the bill is reasonable and proportionate.
For claimant firms, the key is to avoid under-settling costs simply because the damages have settled under a structured framework. MoD NIHL costs still need to be drafted properly, evidenced properly and negotiated firmly.
How DMD Costs Can Help
DMD Costs works with claimant solicitor firms on MoD NIHL and military hearing loss costs. We can assist with:
- MoD NIHL bills of costs;
- Precedent S electronic bills;
- N252 and Notice of Commencement;
- Points of Dispute and Replies;
- CPR 46.14 costs-only proceedings;
- hourly rate disputes;
- proportionality arguments;
- medical and audiology disbursement disputes;
- Matrix settlement costs issues; and
- settlement-led negotiation.
If you have settled a MoD NIHL claim and the defendant is pushing a low costs offer, send us the file. We will review the costs position and help you progress the matter towards recovery.