3 legal developments that probably won’t happen in 2018

There’s any number of articles around at this time of year telling us about legal developments that are coming up in the next 6 to 12 months.

From the annual increases to tax allowances, minimum wage rates, and statutory pay for sickness, maternity and other family-related absence, to much more fundamental changes such as the new gender pay gap reporting requirements to the much heralded General Data Protection Rules (GDPR) there is a lot that UK businesses need to prepare themselves for, by springtime.

But, looking further into 2018, there is also plenty of legislation that has been proposed but is still a long way from the statute books, let alone an implementation date.

The combination of the government’s surprisingly weakened position in the House of Commons since last June’s election and the inevitable priority that must be given to the legislation necessary to deliver an orderly exit from the European Union, has greatly reduced the political capital and parliamentary time available to other legislation.

The free vote that the Prime Minister had promised on repealing the 2004 Hunting Act was an early casualty in 2018, but there are a few other initiatives unlikely to get before parliament, onto the statute books and into force by the end of the year.

Tribunal fees strike back?

As recently as October, (then) Lord Chancellor David Liddington claimed the government still wanted to replace the employment tribunal fee regime struck down by the Supreme Court last summer. However, higher priorities for the Ministry of Justice and the reduced income that any fair and workable system could raise, will make quick progress on this unlikely.

LASPOA reform

Formal assessment of the impact that five years of the Legal Aid, Sentencing and Punishment of Offenders Act (2012) has had on access to justice, was finally timetabled by David Liddington last year, and is due to report by the end of April. Given the time it has taken even to get the assessment underway, the prospect of any major reform of the legislation being implemented in 2018 seems remote.

Civil Liability Act

Another piece of MoJ business that we seem to have been talking about forever, is the Civil Liability Bill mentioned in last year’s Queen’s Speech. The proposed increases to small claims court limits of £5,000 for road traffic injury claims and £2,000 for other injuries appear to be set in stone, but the faltering progress these reforms have seen since George Osborne first announced them in 2015, makes a September implementation seem less likely than April 2019.

Unlikely as these three developments may be to see legislative action this year, there is more than enough reform taking place in 2018 to keep us all busy. The uncertainty surrounding the implications of Brexit, especially what it means for employment law, should become clearer as the year progresses. But one piece of EU reform that seems certain to survive, GDPR, should be enough to keep us all busy, at least until the summer.

The devil in the detail

It is 9 years since Lord Justice Jackson first got the call from the Master of the Rolls to begin his Review of Civil Litigation Costs which made recommendations largely brought into law by the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO).

While debates about the post-LASPO regime persist, few would question Jackson’s tenacity. This summer, his latest “supplemental” review, caps months of speculation on the prospect of fixed recoverable costs being extended to cover a much wider range of cases. The implications for the legal profession and for public access to the justice system will still be significant, but his latest recommendations represent a significant step back from earlier proposals.

In January 2016, Jackson urged ministers to fix costs for claims up to £250,000 but his latest review proposes only to fix costs for all claims up to £25,000. As always, the devil will be in the detail, but it is encouraging that Lord Jackson has acknowledged the complexity of clinical negligence cases, so that people who have been harmed by the public health system are not subsequently let down by the justice system.

His review recommends that a bespoke process is established for clinical negligence cases that fall beneath the £25,000 threshold and proposes that a joint Department of Health and Civil Justice Council working group be set up to gather views from both claimant and defendant solicitors. The outcome will be vital to the fairness of any fixed costs regime and to avoid tipping the scales in favour of defendants (most often NHS Resolution) who have already proved willing to play the system to avoid meeting the liabilities presented to them in court. Lord Jackson hasn’t entirely abandoned his aspiration to see fixed costs in much higher value cases, however.

His latest report also sets out plans for a pilot that would provide an optional, streamlined procedure for business and property cases up to £250,000, with fixed costs up to £80,000. Again, how this is implemented will determine both how fair and how successful any further expansion of the fixed costs regime may be, not least in the resources courts will have to deliver swift er and more cost-effective justice.

Fixed recoverable costs are, without doubt, here to stay and likely to be extended. They can offer benefits to all parties in streamlining and speeding up access to justice, but they could also reduce it, so any expansion must be carefully monitored.

Making the most of BTE

A recent report conducted by the Legal Ombudsman considers two key points in the run up to LASPO’s implementation. Firstly, how before-the-event legal expenses insurance (BTE LEI) is going to fill the gap and secondly how well it is currently placed to do so.

As reported in Litigation Futures, the report commissioned a YouGov questionnaire which found that while, “40% of those surveyed had some type of legal insurance cover”, 74% of these were “unsure or didn’t know what financial cover their policy provided.”

“Concerning” was the word coined by the Chief Legal Ombudsman, Mr Sampson and perhaps rightly so. As a legal expenses insurer we know that we provide high-quality BTE LEI products that are designed around the customer’s needs. We work hard to make our policies understandable to the masses, following the FSA guidelines and provide training to the brokers who are on the front-line selling our products. There are no secrets; it is all down in black and white with Keyfacts in both the point of sale and policy wording.

However, for most it is currently sold to them as an add-on product which tops up the cover they receive in their main insurance purchase, for example car or home insurance. Already there is a barrier as it is likely that the LEI is buried within the main policy wording. Before I started working in insurance, I would simply skim the wording and make sure that the key areas were covered and then hope that I wouldn’t need to make a claim. I am much more conscious now of checking carefully, but I think this is minority when it should be the other way around. Saying that, if I did have a legal issue and needed to consult a solicitor, if the solicitor is doing their job properly they should discuss with the client their insurance details and investigate if BTE is available. After all, you only need the policy at the time of a claim.

Therefore, perhaps it is a general education of the benefits that is required. As found in the survey only 40% of those asked had LEI, in Germany for instance 60% of the population have some form of LEI. The report acknowledges that “legal expenses insurance is beneficial for the simple reason that it’ll continue to allow people to take legal action when they would not otherwise have been able to afford it.”

LASPO – Insolvency cases exempt from reforms

Further news to the LASPO Bill, which was given Royal Assent last month; with the recoverability of success fees and ATE insurance premiums being unavailable with effect from April 2013, insolvency cases will now be exempt from no-win, no-fee reforms until April 2015.

LASPO is still progressing but there are still big issues and small yet significant concessions that bring into question how it will be implemented as early as spring 2013. As discussed in a Legal Futures article, problems with QOCS still exist, the government is “seeking further advice from the Civil Justice Council” with speculation that there may be some issues making the “qualifications work”. QOCS is an important aspect to get right as claimants are intended to be protected from defendants’ costs in most circumstances, even when they lose.

On the concessions side, Mesothelioma cases were excluded during the ‘ping pong’ stage between the Houses until an impact review has been undertaken. The latest exemption from the April 2013 date brings us to the insolvency cases.

As reported in Law Society Gazette, Justice Minister Jonathan Djanogly made a written statement to the House of Commons, “Insolvency cases bring substantial revenue to the taxpayer, as well as other creditors, and encourage good business practice which can be seen as an important part of the growth agenda with wider benefits for the economy. These features merit a delayed implementation to allow time for those involved to adjust and implement such alternative arrangements as they consider will allow these cases to continue to be pursued.”

The Law Society Chief has welcomed the latest decision asking that “this logic applied to other types of cases, where a similar implementation delay, until 2015, would help to avoid unwelcome impacts on ordinary people’s right to secure legal redress.”

The LASPO rollercoaster continues, be sure to check back soon for more news!

For and most importantly against the LASPO Bill

Various government proposals and bills seem to be having a tough time in the House of Lords, not least the rocky ride being shown to the Legal Aid, Sentencing and Punishment of Offenders Bill (LASPO) which proposes cuts to legal aid and sweeping changes to civil litigation.

Currently in committee stage there have already been a few concessions made but with many peers opposed to the Bill the next report stage should be very interesting.

The last couple of weeks have seen a number of articles in the news with varying opinions on the LASPO Bill.

In the Telegraph over the weekend, the Justice Minister Ken Clarke was defending the Bill by highlighting the costs that the NHS pays in success fees to lawyers in clinical negligence cases. According to their figures:

• the number of claims rose from 5,426 in 2006/07 to 8,655 in 2010/11
• legal costs of claimants suing the NHS rose over the same period from £83 million to £195 million
• the cost of defending the actions rose from £49 million to £62 million.

Blaming the compensation culture, Clarke explained that "Taxpayers expect that the system should compensate claimants properly and reward their lawyers appropriately, not liberally.”

On the other side of the fence, the Telegraph article mentions phone-hacking victims like the Dowler family who have lobbied the government with a letter saying that “the changes will make it difficult for any but wealthy people to launch legal actions.”

Similarly, a range of charities, organisations and campaign groups are fighting back against the Bill, including AJAG and the CJA both of which ARAG is a member of.

The latest press release from the Law Society explains: “Peers in the House of Lords will discuss altering the legislation in a bid to eradicate "compensation culture" but the move would instead penalise victims of accidents, fraud, negligence and wrong-doing as well as businesses and even the Government.”

In an article in the Guardian, charities Oxfam and Amnesty International have joined the campaign on behalf of those suffering human rights abuses, warning that, “Victims of oil spills, pollution or land grabs in developing countries will no longer be able to pursue claims in British courts against multinational corporations under [these] legal reforms.”

Another hole identified in the Bill is that of the money saving aspect. Concerns have been raised by many that the calculations haven’t been done and that the cuts in legal aid and amends in civil litigation will cost more than they save. A report by King’s College London identifies that “these changes will incur new costs for the taxpayer by simply shifting the burden onto other parts of the public purse.”

In another academic report, Dr McIvor, Senior Lecturer at Birmingham Law School, accused the reforms of being “excessive and over-zealous”. She advised that “the evidence does not necessarily demonstrate that the primary source of the current high level of costs is the recoverability of success fees and after-the-event insurance premiums.”

What is also surprising about the Bill is the lack of joined up thinking in the government. With Clarke, together with his counterpart, Eric Pickles, continually following the party line about saving money (Guardian article: Eric Pickles: council tax rise a 'kick in the teeth' for cash-strapped residents), if the Bill is passed and legislation implemented then Council Tax will increase. The reason for this is quite simple. Unlike the present system where Local Authorities can recover their legal costs when they successfully defend a claim, under the new proposed system, they will not unless the case is deemed to be fraudulent or frivolous, which is extremely difficult to prove. This Bill is leaving Local Authorities will their hands tied behind their back. One the one hand they will want to defend cases, but on the other they know that if they do they won’t recover costs. Claims won’t reduce, so compensation payments by local authorities will increase, meaning only one thing, a cut in services or an increase in the Council Tax.

With the report stage to come and many amendments expected to be tabled by the Lords to all sections of the Bill, the fight is not yet over for those battling for and most importantly against the LASPO Bill.

Fighting for access to justice

As a member of the Consumer Justice Alliance (CJA) we at ARAG were very interested in seeing the video that they have just produced and released on YouTube. Called ‘Fighting for access to justice’ it looks at how the CJA are campaigning against the Government’s proposals for changes to civil litigation as presented in the LASPO Bill.

More importantly victims of accidents and medical negligence are invited to discuss their experiences and how their lives have been transformed not only by their illnesses or injuries but how they managed to turn it around thanks to the compensation and support they received as a result of being able to claim through the current system.

As one victim of medical negligence describes in the film, “changing the funding regime will make it harder for people to have their claim properly investigated and also for the hospital to change the practices that allowed it to happen and deny them full compensation for the loss they have suffered.”

The risk of having to pay for legal fees should the decision go against you would have been too much of a barrier for the people speaking in the film and they all explain that this is not a risk that they could have taken.

Nigel Meurs-Raby, Chairman of the CJA concludes the film by saying, “These are real people who are real victims with injuries that are not their fault. We need to do everything that we can to make sure that this dreadful new legislation doesn’t end up on the statute book.”

Watch the video in full here: http://www.youtube.com/watch?v=gtvMdYOu3Ks&feature=related