Shadow Justice Secretary asks probing questions of civil litigation costs

Questions, questions and more questions, in fact 48 (all listed below) were tabled by the Shadow Justice Secretary, Andy Slaughter, in the House of Commons on Wednesday 1st December 2010 on proposed changes to civil litigation funding and costs.

A response is expected on the 3rd December 2010, so watch this space for an update.

• Mr Andy Slaughter: How many cases brought against the National Health Service Litigation Authority were funded by (a) legal aid, (b) a conditional fee agreement and (c) by other forms of funding in each of the last three years; and how many in each category resulted in a compensation payment.


• Mr Andy Slaughter: What estimate he has made of the (a) total and (b) average annual amount that claimants who do not have to contribute towards the costs of their claims would have to contribute following implementation of the proposals in the Civil Litigation Funding Green Paper.


• Mr Andy Slaughter: What estimate he has made of the annual number of claimants who do not have to contribute towards the costs of their claims and would have to do so as the consequence of implementation of the proposals in the Civil Litigation Funding Green Paper; and what estimate he has made of the number of such claimants who would consequently be deterred from bringing claims.


• Mr Andy Slaughter: What maximum guideline hourly rate he proposes following implementation of the proposals in the Civil Litigation Funding Green Paper.


• Mr Andy Slaughter: When he plans to publish the outcome of his consultations on (a) the Legal Aid Green Paper and (b) the Civil Litigation Funding Green Paper.


• Mr Andy Slaughter: What estimate he has made of the annual number and proportion of viable personal injury claims that are not pursued.


• Mr Andy Slaughter: What proportion of personal injury claims are low-value road traffic cases qualifying for the new portal system.


• Mr Andy Slaughter: How many cases have not been proceeded with under the low-value road traffic cases portal system owing to the failure of a defendant to comply with its terms.


• Mr Andy Slaughter: What assessment he has made of the effectiveness of the low-value road traffic cases portal system.


• Mr Andy Slaughter: What steps he plans to take to introduce fast-track fixed costs.


• Mr Andy Slaughter: How many personal injury cases were settled (a) after proceedings were commenced and (b) after a defence was served denying liability in each of the last three years.


• Mr Andy Slaughter: In how many personal injury cases did claimant (a) beat and (b) failed to beat a Part 36 offer in each of the last three years.


• Mr Andy Slaughter: In how many personal injury cases the case proceeded to a trial in which the claimant was (a) successful and (b) unsuccessful in each of the last three years.


• Mr Andy Slaughter: What change he expects to (a) litigation costs to and (b) damages payable by Government departments and agencies to personal injury claimants as a consequence of implementation of the proposals in the Legal Aid Green Paper and the Civil Litigation Funding Green Paper.


• Mr Andy Slaughter: How many personal injury claims were brought against his Department and its agencies in each of the last three years.


• Mr Andy Slaughter: How much has been recovered through benefit recoupment from personal injury claims (a) in total and (b) in respect of (i) road traffic accident, (ii) employers (A) disease and (B) other liability cases, (iii) occupiers' liability, (iv) other public liability and (v) clinical negligence cases in each of the last three years.


• Mr Andy Slaughter: What estimate he has made of the change in the level of Exchequer revenue from VAT receipts consequent on the implementation of the proposals in the (a) Legal Aid and (b) Civil Litigation Funding Green Papers.


• Mr Andy Slaughter: What estimate he has made of the annual number of clinical negligence cases dealt with under (a) fast-track and (b) multi-track procedures which qualified for funding through legal aid under existing criteria in the last 12 months which would not so qualify under the proposals in the Legal Aid Green paper.


• Mr Andy Slaughter: If he will estimate the annual number of occupier and public liability accident cases under (a) fast track and (b) multi-track arrangements which qualify for (i) conditional fee agreements and (ii) after-the-event insurance support through legal aid that would not be brought as a result of his proposals in the Civil Litigation Funding Green Paper.


• Mr Andy Slaughter: If he will estimate the annual number of road traffic accident cases under (a) fast track and (b) multi-track arrangements which qualify for (i) conditional fee agreements and (ii) after-the-event insurance support through legal aid that would not be brought as a result of his proposals in the Civil Litigation Funding Green Paper.


• Mr Andy Slaughter: What estimate he has made of the number of cases of injuries of maximum severity pursued under multi-track arrangements supported by after-the-event insurance that will not be brought after implementation of the proposals in the Civil Litigation Funding Green Paper.


• Mr Andy Slaughter: If he will estimate the annual number of clinical negligence cases under (a) fast-track and (b) multi-track arrangements which qualify for (i) conditional fee agreement funding through legal aid and (ii) after-the-event insurance support that would not be brought as a result of his proposals in the Civil Litigation Funding Green Paper.


• Mr Andy Slaughter: What assessment he has made of the requirement for primary legislation to implement each proposal in the Civil Litigation Funding Green Paper.


• Mr Andy Slaughter: What assessment he has made of the likely effect on provision of legal advice for (a) clinical negligence, (b) personal injury cases and (c) small business disputes of the proposals in (i) the Legal Aid Green Paper and (ii) the Civil Litigation Funding Green Paper.


• Mr Andy Slaughter: With reference to the impact assessment on the proposals in the Civil Litigation Funding Green Paper, what estimate he has made of the likely monetary benefit to the liability insurance industry arising from reduced (a) costs and (b) damages payments attributable to implementation of the Green Paper proposals.


• Mr Andy Slaughter: With reference to the impact assessment for the Civil Litigation Funding Green Paper, what estimate he has made of the average change in (a) damages awarded to claimants and (b) costs claimed by lawyers of claimants.


• Mr Andy Slaughter: What assessment he has made of the likely (a) extent, (b) availability and (c) cost of the (i) stand-alone and (ii) general before-the-event insurance proposed in his Civil Litigation Funding Green Paper to families of (A) average income and (B) below-average income.


• Mr Andy Slaughter: What assessment he has made of the likely restrictions on liability to a policy holder (a) generally and (b) for legal costs in the before-the-event insurance policies proposed as alternative sources of legal funding in the Civil Litigation Funding Green Paper.


• Mr Andy Slaughter: What level of means he proposes as that which will entitle (a) a claimant to benefit from and (b) a defendant to avoid the qualified one way costs shifting proposed in the Civil Litigation Funding Green Paper. [28978] (For answer 03/12/2010)


• Mr Andy Slaughter: What progress he has made in developing his proposed pilot for predictable personal injury damages in claims up to £10,000.


• Mr Andy Slaughter: What assessment he has made of the consequences for (a) the viability of after-the-event insurance and (b) the effect on civil litigation of a reduction in the use of after-the-event insurance of implementation of the proposals for qualified one way costs shifting in the Civil Litigation Funding Green Paper.


• Mr Andy Slaughter: What assessment he has made of the likely effect on levels of premiums for after-the-event insurance if recoverability is limited to liability disputed cases in the post protocol period under the proposals in the Civil Litigation Funding Green Paper.


• Mr Andy Slaughter: How much he expects to recover annually from interest on solicitors' client accounts in (a) cash terms and (b) as a proportion of the legal aid budget as the consequence of implementation of the proposals in the Civil Litigation Funding Green Paper.


• Mr Andy Slaughter: How many (a) fast-track and (b) multi-track cases of clinical negligence funded through legal aid have been brought in each of the last three years.


• Mr Andy Slaughter: What recent representations he has received from the Law Commission on the level of general damages in personal injury claims; and what recent assessment he has made of the adequacy of that level.


• Mr Andy Slaughter: What estimate he has made of the likely cost per case to a claimant of obtaining independent legal advice on a damages-based agreement under his proposals in the Civil Litigation Funding Green Paper.


• Mr Andy Slaughter: What estimate he has made of the likely cost to the public purse of operating a regulatory system for the damages-based agreements proposed in his Civil Litigation Funding Green Paper.


• Mr Andy Slaughter: What discussions he has had with the judiciary on potential changes to the number of litigants-in-person arising from the implementation of the proposals in the Civil Litigation Funding Green Paper.


• Mr Andy Slaughter: What estimate he has made of the likely average reduction in court costs attributable to the proportionality test proposed in the Civil Litigation Funding Green Paper.


• Mr Andy Slaughter: What estimate he has made of the likely monetary value of the uplift of 10 per cent. on general damages as proposed in his Department's Civil Litigation Funding Green Paper in respect of an average (a) employers' liability and (b) road traffic fast-track personal injury claim.


• Mr Andy Slaughter: Whether he has had discussions with after-the-event insurers on the financial liability of the proposal in the Civil Litigation Funding Green Paper for recovery of after-the-event premiums for disbursements.


• Mr Andy Slaughter: At what rate he proposes to fix success fees for each type of case.


• Mr Andy Slaughter: Whether he has made an estimate of the likely effect on the number of law firms which handle personal injury claims of the implementation of the proposals in the Civil Litigation Funding Green Paper.


• Mr Andy Slaughter: Whether he has made an assessment of the likely effects on the legal services provided by (a) trades unions and (b) membership organisations of the implementation of his proposal to end collective conditional fee agreements.


• Mr Andy Slaughter: What assessment he has made of the merits of increasing the level of use of mediation at an early stage in personal injury claims.


• Mr Andy Slaughter: If he will assess the merits of reversing the burden of proof in personal injury cases (a) generally and (b) in respect of each type of case for the purpose of (i) reducing litigation costs and (ii) speeding up claims.


• Mr Andy Slaughter: How many and what proportion of the cases which resulted in recoupment of benefits were (a) funded under conditional fee agreements and (b) underwritten by after the event insurance.


• Mr Andy Slaughter: What estimate he has made of the change in revenue accruing to the Department for Work and Pensions from benefit recoupment consequent on the implementation of the proposals in the (a) Legal Aid and (b) Civil Litigation Funding Green Papers.

Home Emergency Insurance - are your clients covered?

A sales person should believe in their product. I believe in Home Emergency Insurance and think that every home should have a policy.

With forecasts over the coming weeks of a cold snap bringing snow and ice to the UK the likelihood of your customers needing Home Emergency Insurance is significantly increased.

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But it’s not just boiler cover. It is plumbing and drainage problems, failure of power, broken toilet, vermin infestation and security problems.

Many people don’t know about Home Emergency Insurance or think that the home insurance covers it. Unfortunately, it doesn’t and this product has been designed to plug that gap and sit alongside the main policy.

ARAG provides a high-quality home emergency product that offers better cover than most of the market. It is also very competitively priced beating the likes of British Gas and Direct Line.

Service is important in this area. An emergency is a stressful situation and people get upset if things aren’t sorted fast. That is why we have chosen our partners very carefully and constantly monitor performance to maintain great standards.

So as the winter sets in and we enter the busy six months for emergency calls, now is the best time to advise your customers to take out Home Emergency Insurance to give them additional peace of mind.

If you would like to find out more about ARAG’s Home Emergency Insurance contact the sales team either by email or call on 0117 917 1685.

John Gray – Corporate Development Executive - ARAG

ARAG intends to stay No.1

The Insurance 360 report on the legal expenses market gave our products and services another class-leading endorsement with a decisive thumbs-up from brokers. Believed to be the largest and most independent detailed survey of broker perceptions to date, it delivers a blueprint for all legal expenses insurance (LEI) providers to improve their products and services.
Not only was ARAG “ranked number one on overall service and product capability, with an 80% overall score” ARAG was ranked “best in the business in four of the seven service themes.” The top-class standard covers that we provide were praised for being “backed by expert, commercially capable people who could readily adapt them to brokers’ specific needs. ARAG was on the ball with technology, efficient on renewals and pro-active in business development”

In summary the report reads“ARAG beat major competitors such as DAS and Abbey Legal by a country mile” and while this is fantastic, what is important for us, is to ensure we maintain this lead over competitor by continuing to improve. We are now working on all the action-points suggested in the report.

The big surprises are the size of the gap between the our team at ARAG,voted as the best, and worst performers, and the clear message that there are some providers that excel across the board and others that perform badly, or merely averagely, in all areas. The summary by the report’s author, in Post Magazine illustrates this succinctly.

Clearly, some providers have a much longer way to go than others and improvement will take a long and determined effort to bear fruit. We know that they are already taking a keener look at what we have been doing but whilst ARAG easily topped the overall rankings -- and was consistently way above the average in all categories -- a couple of areas were highlighted where improvements can be made: more training is being asked for together with wider access to an enhanced web quote facility.

“ARAG is largely on top of its game but it needs to stay there”We have already taken action to meet requests for more training for broker staff and are tackling issues on the quick quote system. It was praised for what it could do but more brokers need to use it, and we recognise that it currently stops short of issuing the policy. We intend to take it full cycle. Web quotes were an Achilles Heel for most LEI providers.

“Several large, long-established legal expenses insurers are delivering mediocre service and uninspired products”
The survey identified 20 LEI providers and the report covers the seven most-used providers in detail (the Post Magazine summary omits the “relatively small player” Composite and “last in every area of service” First Assist). After ourselves, the overall rankings are: Composite, MSL, Allianz, DAS, Abbey and First Assist. The ARAG team will supply chapter and verse to anyone who asks. Incidentally, three-quarters of the brokers surveyed were independents.

So what are the problem areas for these LEI companies? Claims handling and development support were particularly weak, with the quality of legal advice lines and document wordings, including that of policies, being notably deficient. Some providers managed to get it wrong in every area.

Whilst we at ARAG seem to have got most things right, anything that is noted as being less-than-excellent gives room for improvement.
So, on claims, there is a suggestion that we should be quicker to accept liability especially as our speed of response won high praise: something to look at, certainly.
More help with training broker staff? Agreed.
Development support generally? Mostly a case of targeting fruitful opportunities from brokers looking to change providers or try something new.
Renewals? Some tweaking possible.
Our “top-notch” standard covers? We are always looking at new ideas and ways to adapt them for niche markets.
Documentation and legal advice? Both strong scorers, but some minor niggles have made us double-check.

“ARAG gave brokers a thoroughly convincing performance”
The report gives an extremely positive view of our work and especially commends the commitment and knowledge of the people delivering the service. We are using its creative critiques to do better still.

“For all-round excellence in legal expenses insurance, no other large scale provider came close”
Next year’s survey promises to be bigger and better. Let’s see who has upped their game and whether the report’s prediction that “unresponsive, inward-looking LEIs are set up to sink” has come true. Many thanks to all the brokers who took part and my suggestion to them is that if anything can be done to make improvements, don’t wait until next year, tell us now.

Tony Buss
Managing Director

ARAG takes a flexible approach on claimants right to choose debate.

Last year the European Court of Justice (ECJ) opened the debate on whether claimants who are pursuing a claim under a class action are entitled to choose their own lawyer to represent them when they are covered by legal expenses insurance.
The issue was determined by the ECJ (Case C-199/08, Eschig) when the court was asked to decide whether ¬insurers were able to rely on a provision in a policy that restricted the insured’s choice of lawyer if the claim was a ‘mass claim’. Austrian Erhard Eschig’s claim was one of several thousand for money lost when an investment turned sour. Others also had LEI from the same insurer, Uniqa. Having received the claim, Uniqa refused cover, on the grounds that the lawyers had to be panel members.
Uniqa tried to enforce a clause" in their policy which allowed them to select the legal team when several insured parties in similar situations wished to pursue claims against the same opposing party. The Insurers sought to combine the legal representation of their clients’ interests in order manage and bundle similar cases. They argued that selecting specialised lawyers, allowed them to optimise the professional competence to best defend clients’ interest and that this was beneficial to claimants.
Not withstanding the arguments over what was best for the claimants the court correctly ruled against the Austrian insurers holding that "mass claims clause "was unenforceable since it breached policyholders' rights to instruct a lawyer of their own choosing to represent them in a claim under a legal protection policy. These rights are provided for by European Council Directive (87/344/EEC 1987) which is implemented in the UK by The Insurance Companies (Legal Expenses Insurance) Regulations 1990. (1990 LEI Regs)
The prime concern of the legislation is to protect the insured parties and prevent conflicts of interests between them and the insurance company. Both the EU Directive and the UK the 1990 (LEI) Regs provide three alternative options which are open to LEI providers to avoid conflicts of interests with claimants.
The solution favoured by bodies such as the Law Society is that freedom of choice should prevail from the moment a claim is intimated to the insurer. However, the option adopted by the UK LEI market is that freedom of choice should be available to claimants where under a legal expenses insurance policy recourse is had to a lawyer to defend or represent the insured in any inquiry or proceedings.
UK Legal Expenses insurers usually exercise their right to appoint a panel firm to undertake investigations into the merits of a claim, to negotiate on behalf of Insureds and to undertake preliminary work until it is necessary to issue court proceedings.
While ARAG is keen to pass on as many cases as possible to their panel members we do see that for the insured client this can cause inconvenience and takes a flexible approach to changes that may be enforced in the future.

ARAG is keen to hear the views of the wider LI community on the subject.

For further information contact the ARAG press office on lindsey.morgan@arag.co.uk
or 0117 917 1568.

ARAG leads the industry in legal expenses insurer study

For all-round excellence in legal expenses insurance, no other large-scale provider comes close to ARAG. This is the verdict of a new independent survey of legal expenses insurers in the UK published this month.

The Insurance360 Legal Expenses Insurers Study named ARAG as best legal insurance provider and cited the Bristol-based company as top in four key aspects of service: new business, underwriting, quality of cover, and documentation and legal advice.

The study also noted that “a remarkable 47% of ARAG’s performance grades were Excellent”.

The study concluded: “Overall, ARAG scored 80 per cent, nine points above average, for first place. ARAG’s standard covers were top notch – and strongly supported by efficient, capable people who understood brokers’ and clients needs and had the authority and commercial nous to meet them. ARAG’s online quotation system seemed effective and on renewals and business development, the company was clearly on the front foot.”

Ranking first in four sectors and in the top three in the remaining sectors, ARAG scored 9% above the market average, at 80%, for overall. Demonstrating excellence not only in the market as a whole, but also compared to its competitors, ARAG scored above 80%, with at least 10% above market average in new business, underwriting, business development support and documentation & legal advice.

Brokers reviewing the company for the LEI study commented favourably on ARAG’s “pragmatism”, “knowledge”, its ability to “understand the risk quickly” and the quality of its online quotation system.

ARAG’s managing director Tony Buss commented: “This is great news for ARAG and a very positive third party endorsement of the quality of the service and products we offer. It’s my belief that it was our innovative and flexible approach with which we provide solutions tailored to suit our clients’ specific needs which lead us to this success. The study has doubled our determination and enthusiasm to grow the business and make a major impact on the UK legal expenses market.”

The Insurance360 Legal Expenses Insurer Study was conducted during April-June 2010 and sampled the views of 132 insurance brokers using an online questionnaire.

For further details of the results please email Lesley Attu Research & Development Technician - lesley.attu@arag.co.uk or telephone 0117 917 1567.

Arag: Jackson report could lead to “huge influx of spurious claims”

Arag has warned that qualified one-way cost shifting and the abolition of ATE insurance and Success Fee will have a negative impact on Access to Justice and will see a huge influx of spurious claims. Read More

Andrew Welch on The Jackson Report DEC 2009

ARAG talks to Andrew Welch

Click for Andrew Welch: View for 2010