Report publication: Small claims limit for personal injury

Last Thursday the Justice Select Committee published their small claims limit for personal injury report.

The report makes a number of conclusions and recommendations. The Select Committee raised concerns about increasing the small claims limit for personal injury: while the Ministry of Justice is making efforts to develop an electronic platform supplemented by guidance and support for unrepresented claimants, the committee is concerned that we this ambitious project risks falling short of creating a claims process that guarantees “unimpeded access to the courts”.

You can read the press release associated with the report, and the report itself on the MOJ’s website.

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.

It’s been a busy couple of weeks for our ATE Sales team – Mike Knight, ATE Sales Manager

First up was AvMA’s Annual Clinical Negligence Conference followed, a week later, by the APIL Advanced Brain and Spinal Cord Conference. Both exhibitions are regularly in our events calendar as they provide an invaluable opportunity for us to connect with new prospects and re-connect with our current partners. 

Both events were extremely busy for us, so apologies to anyone who didn’t get the chance to speak to us on our stands, please do contact us below if you would like a chat! Even though each event has a different demographic of delegates, our message is always the same.

For more than a decade, ARAG has led the way in delivering innovative after-the-event insurance solutions to law firms throughout the country. Many will talk of ‘access to justice’, but ARAG is still driven by its founding principle, more than 80 years old, that “…every person should be able to assert their legal rights, not just those who can afford it.”

Nowhere is this principle more important than in our mission to ensure justice continues to be accessible to those who have sustained severe and sometimes catastrophic injuries. At a time when claimant firms and their clients have been confronted with successive challenges, seemingly perpetual reform and shifting regulatory and market conditions, ARAG has stood firm, developing and adapting products to satisfy increasingly demanding requirements, especially in the personal injury and clinical negligence sectors.

The design of our Recourse range of after-the-event solutions has always focused on simplicity. Products that a solicitor can easily explain and a client can readily understand; products free from complex underwriting mechanisms and onerous conditions; products, put simply, that work.

As a result, we are regularly shortlisted for a string of awards, from Personal Injury Insurance Provider of the Year to Legal Expenses Team of the Year, ARAG has been recognised as the outstanding provider of legal expenses insurance solutions for law firms and their clients.

I always enjoy attending events like those put on by AvMA and APIL as they offer a perfect mix of business and networking. Then again, maybe that’s why I have now decided to take on the challenge of Dry July!

The idea of going alcohol free during a summer month of BBQ’s, sporting events and corporate entertaining is not going to be easy but it is for a great cause and a charity close to our hearts at ARAG; FOCUS. The motivation to stay off the alcohol and enjoy a range of non-alcoholic beverages throughout the month comes from the knowledge that any donations received will enable the charity to invest in projects that make hospitals better. Their aim is to create a comfortable and positive environment for all their patients and staff, investing in improvements to buildings, state of the art equipment and extra care over and above that provided by the NHS. If you would like to show your support, please click here. 

Going forward, we are supporting the St John’s Chamber and AvMA Charity Dinner in Bristol on the 21^st September and exhibiting at the APIL Clinical Negligence Conference in Brighton on the 5^th and 6^th of October – I hope to see you there!

Contact details:

Mike Knight, ATE Account Manager

Email: mike.knight@arag.co.uk

Mail: 9 Whiteladies Road, Clifton, Bristol, BS8 1NN

Mobile: 07795 636391

Flexible ATE Solutions for the challenges ahead

Our industry is currently facing many challenges, from changing legislation, greater financial pressure on firms and increased competition for less work; lack of support from your ATE provider shouldn't be one of them.

With the timetable and framework for change now announced https://www.lawgazette.co.uk/news-focus/pi-small-comfort-on-small-claims/5059994.article it is important that as well as fighting the changes you protect your clients and your firm from any adverse effects.

We offer flexible solutions for your practice, depending on what risk strategy you decide is suitable for you. We are able to offer a choice of:

• Firm Policies, insuring all clients of your practise under one policy
• Full cover for adverse costs and disbursements
• Part 36 cover only
• Part 36 + post offer disbursements cover
• Adverse costs and issue fees cover

All of the above are competitively priced and provide A-rated security and one of the largest legal expense insurers in the world. We also offer a system link-up to reduce administration when arranging cover which avoids the need for double keying.

We continue to innovate and are certain that whatever the changes ahead, we will have the ATE solutions, not just for today but also for tomorrow.

Call us at 0117 307 2293 or email us to discuss how we can help future proof your firm.

 ATE flexible solutions

Transport Select Committee Delivers a Refreshingly Balanced Report

The Transport Select Committee’s (TSC) third report on the cost of motor insurance focuses on the impact of whiplash claims on premiums. The report provides recommendations to the Ministry of Justice after considering evidence from a wide range of interests. ARAG admires the thorough approach of the TSC and endorses many of the report findings. Provided that the Government responds positively, the recommendations should ensure that individuals who have suffered an injury, including whiplash, as a result of a motor accident which was not their fault, will retain access to justice through the small claims procedure.

The UK is not the Whiplash capital of the world

The TSC considered medical evidence about the characteristics and effect of whiplash injuries, accreditation of medical experts, the volume of claims and to what extent whiplash claims are exaggerated or fraudulent. They concluded that 58% of traffic accidents result in whiplash injuries, affecting nearly 477,000 individuals in the last year.  This number represents the lowest number since at least 2007-8. The TSC urged the Government to analyse earlier accident statistics and the ABI to provide better data. The committee was not persuaded that the Government’s claim about the UK being the “whiplash capital of the world” could be established from evidence available.

The report expressed surprise that the Government had brought forward measures to reduce fraudulent or exaggerated whiplash claims without having even an estimate of the scale of the problem. ARAG has offices in 15 countries and our evidence supported the TSC’s view. Maybe the Government’s position would have been different had representatives from the legal profession been invited to the PM’s exclusive summit with motor insurers which took place on 14^th February? The TSC was disappointed to hear about lack of engagement with the legal profession.

Medical Reports

The Committee supported Government proposals for accreditation of medical practitioners (including physiotherapists) and suggested that the Government consider a random audit of medical reports. The Committee felt, that claimants should show some additional evidence to support their claim, whether from a visit to the GP or A&E soon after the accident, or evidence of the impact of the injury on their life. As ARAG deplores exaggerated and fraudulent claims we believe this to be perfectly reasonable.

Reducing the limitation period

As injury symptoms emerge relatively quickly the Committee recommended the Government explain why they were unresponsive to changing the limitation period for road traffic claims below £10,000 from three years to one.

The small claims threshold

ARAG provided comprehensive statements about the negative impact that increasing the small claims track threshold to £5,000 is likely to have on access to justice for motor accident victims. We realise that least well off drivers can be tempted to decline BTE legal expenses cover in order to reduce their premium. The committee was impressed by our argument that expecting individuals to have the capacity, confidence or appetite to instigate claims through the portal is unrealistic. They believed “that access to justice is likely to be impaired, particularly for people who do not feel confident to represent themselves in what will seem to some to be a complex and intimidating process”. They further noted that “insurers will use legal professionals to contest claim, which will add to this problem”.

Our evidence also raised concern about small claims track procedures having the potential to increase the risk of fraud. The TSC noted that procedural implications “could prove counter-productive in efforts to discourage fraudulent and exaggerated claims.” 

The committee recommended no change to the small claims threshold until the MOJ had assessed the impact of the Portal.

In conclusion

The TSC asserted that genuine claimants should not be demonised. Again the Committee expressed surprise that the Government had only listened to the insurers’ perspective and found this disappointing in the light of the Government’s own view that the insurers had encouraged unnecessary and excessive claims with their own business models. Insurers were further criticised for making offers in advance of receiving a medical report and for settling claims where fraud or exaggeration was suspected.

The TSC recommended that the Government explain how it will monitor whether or not motor insurers honour their commitment to ensure savings that result from legal reforms are passed through to consumers in the form of lower premiums. Fully recognising the dysfunctional and opaque nature of the motor insurance market the Committee called on insurers to be more transparent about financial and other links in the service chain.

It seems to us that after not being listened to for so long, and even worse being “blamed” for mischiefs in the legal system, the position of claimants has at last been appreciated. We are delighted to see that our submission to the TSC has influenced their report. In particular retaining the small claims threshold at £1,000 will ensure ATE remains a possibility for claimants who have not taken out BTE legal expenses.

 

 

 

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

ARAG shortlisted at the 2011 Personal Injury Awards

ARAG is pleased to announce that we have been shortlisted at this year’s Personal Injury Awards in the ‘Insurance Provider of the Year’ category. Having previously won this award in 2009 we are keeping our fingers crossed for 24 November when the awards will be held at The Riverbank Park Plaza in London.

ARAG’s existing After-the-Event (ATE) product is known for offering flexibility and quality to ensure that customers’ needs are met and hopefully exceeded. In addition to this, ARAG also look for and implement innovative ideas and in 2011 we created and launched a new product – Recourse Options.

Our original product Recourse provides a standard limit of indemnity covering third party costs and disbursements, whereas Recourse Options is tailored to the specific indemnity required to cover third party costs, disbursements and own sides costs in non-injury cases. Some of the key features include:

• Limits of indemnity to meet the specific risk


• Cover by an A-rated insurer


• Contingent premium – the premium is deferred until conclusion and only payable upon a successful conclusion


• Top-up cover to a Before-the-Event policy


• Cover for cases conducted under a partial or full CFA


• Premium shortfall cover


• Bespoke staged premiums

These are backed by a passionate team and a bespoke approach which allows them to be set up as scheme arrangements or one-off cases.

There is also an easy-to-use online policy application and administration system designed to make life easier for our solicitor partners. This is currently in the process of being developed to enable solicitors to update cases from their own system rather than having to log in to gATEway as well as increasing its scope to offer post-issue schedules for RTA cases.

If you would like more information on ARAG’s ATE products please visit: http://www.arag.co.uk/index.asp?m=93&s=159&t=After%2Dthe%2DEvent+Legal+Insurance

Personal Injury Advertising – Consultation Response from the CJA

The consultation period has now closed on the Claims management regulation proposal to amend rule 6(B) of the conduct rules paper, issued by the Ministry of Justice. Following recommendations in Lord Young’s Common Sense, Common Safety report, the consultation paper proposes a change to Rule 6(b) so that inducements of any kind are banned in personal injury advertising. You can read more about this in the Personal Injury Advertising blog.

Lord Young’s report was commissioned by the government to review UK health and safety, as well as the growth of a 'compensation culture'. However, a recent survey conducted by Norton Rose found that this ‘compensation culture’ “does not have the impact that many believe” and is based on perceptions by the public and media.

In response to question one of the consultation paper – do you have any comments on the proposal to prohibit the offering of financial or similar benefits as an inducement for making a claim by amending Client Specific Rule 6(b) of the Conduct of Authorised Persons Rules 2007? – the Consumer Justice Alliance (CJA):

• “Fully supports the prohibition of inducements subject to a corresponding ban on third party capture.”
• Agrees that “any advertising that represents a personal injury compensation award as some kind of lucky prize draw is inappropriate and misleading.”
• “Believe that prohibiting the offering of financial benefits as an inducement for making a claim constitutes the sort of sensible, measured reform that will reduce costs in the current system without dismantling it altogether.

As a member of the CJA, ARAG fully endorses this response. The full response is available to read on CJA website: http://www.consumerjusticealliance.co.uk/index.html.

Personal Injury Advertising

Lord Young’s recent report Common Sense, Common Safety explored the perceived ‘compensation culture’ in Britain, which encourages a ‘if there’s a blame, there’s a claim’ mentality in which people are led to believe that they can get financial compensation for even the most minor accident. The report suggests that this places unnecessary burdens on businesses and the voluntary sector, making them take ‘an overzealous approach to applying the health and safety regulations’.

The report identifies the advertising conducted by the claims management companies as one of the major contributing factors to this problem. These advertising campaigns often promote the reward of non-refundable inducements, for example:

“We'll pay you £200 immediately after our solicitors approve your claim”
“As soon as we accept your claim, we promise to give you a £150 cash advance”

Under the current regulations of Client Specific Rule 6(b) of the Conduct of Authorised Persons Rules 2007 these inducements are allowed as they are not offered as an ‘immediate cash payment'. Following recommendations in Lord Young’s report, the Ministry of Justice (MoJ) is proposing to change this rule so that inducements of any kind are banned from all stages of the process. The MoJ has issued the Claims Management Regulation Consultation Paper outlining its plans to all claims management companies with all responses due by 10 February 2011.

So do the problems in the current system as laid out in the Common Sense, Common Safety report exist? As with anything they will to an extent but as the Consultation Paper points out “the majority of claims management businesses are not likely to be particularly affected.” Therefore is it right to limit the competitive edge that advertising and incentive strategies bring to the industry? In addition, as the money for inducements is not added to the claims cost but instead paid by the solicitors is there really that much of a problem to be solved?

You can read more in Lord Young’s Report and the MoJ’s Consultation Paper. To find out about legal insurance, visit ARAG’s website.