Motor claims limit

In an article appearing in February's edition of Litigation Funding Magazine, solicitor and senior partner of Underwood's Solicitors, Kerry Underwood, suggests that solicitors should charge clients 40% of damages to pursue personal injury claims arising from a motor accident once the small claims court limit increases from £1,000 to £5,000 in April 2017.
Around 90% of motor personal injury claims are for sums of damages between £1,000 and £5,000.
[The main consequence of increasing the small claims court limit is that lawyers' costs are not recoverable in the small claims court].

In fact Mr Underwood goes further, suggesting that solicitors might start introducing 40% pre-issue contingency fee agreements for such claims earlier than April next year, and for all claims irrespective of whether or not costs will be recoverable from the other side. 
Pointing out that claimants in employment tribunals "happily pay the statutory maximum of 35%" [from a settlement agreed to resolve the dispute or compensation awarded to the claimant by an employment tribunal].

The article concludes that if clients do not wish to pay 40% they can pay an hourly rate to their lawyer- win or lose, or take their chance and litigate the claim themselves.

We contend that claimants will be better off than they ever have been by having in place before-the-event legal expenses insurance cover which will fully protect them from forfeiting damages in order to pay lawyers' costs.
Brokers will be wise to make sure that clients appreciate the value of their legal expenses add-ons.  We provide cover to pursue motor personal injury claims under our Motoring Legal Solutions and Family Legal Solutions policies.

Recoverability of After-The-Event Premiums in Clinical Negligence

It is now almost three years since the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPOA) changes, whereby recoverability of After-The-Event (ATE) premiums from losing opponents was stopped in all but a few claim types (clinical negligence claims being one area whereby recovery of an ATE premium, for the risk of incurring liability and causation evidence, was still allowed).
Despite this, ARAG continues to lead the way in terms of providing both quality products for our solicitor partners, thus allowing access to justice for thousands of citizens and also high quality expertise in dealing with often technical cost disputes on successful cases. 

 

Our experience, and those of our solicitor partners, is that the NHS Litigation Authority (NHSLA) have taken a broad stance to challenge all costs at conclusion of successful cases.
Its stance is often unreasonable in our view and cases such as Reid v Buckinghamshire Healthcare NHS Trust, whereby the Court found that the NHSLA had unreasonably refused to mediate in Detailed Assessment proceedings, thus leading the Judge to award Indemnity Basis costs to the Claimant, only highlight our concern with their approach. 

 However, our approach has been consistent and reasonable throughout. We recommend early offers of settlement on costs to our solicitor partners (we would recommend making a Part 36 for the recoverable premium as soon as the claim for damages conclude). Should a dispute arise thereafter, we have dedicated staff at ARAG able to assist in responding to such disputes and, if necessary, we are prepared to instruct our own costs draftsman to take ownership of the premium disputes.

As more post-LASPOA clinical negligence claims are now settling, the more our experience shows that our premiums are recoverable in these claims. A recent case over what was alleged to be a defect in our schedules (Axelrod v University Hospital of Leicester NHS Trust), was won in its entirety on appeal after ARAG set out the weakness in the NHSLA’s arguments.
Whilst this is a high profile case, we continue to be successful at both Provisional Assessments and Detailed Assessments in recovering our premiums in clinical negligence claims.

The above is all good news for ARAG and also our solicitor partners, however, there is a wider public policy concern that the NHS is wasting taxpayers’ money running these cost disputes.

There is not only the expense of having to pay the Claimant’s cost draftsman fees but there are often penalties for not accepting offers sooner (e.g. failure to accept a Part 36 on costs in time) and interest to pay.

Further, in running these disputes, often unreasonably in our view, the NHSLA have their own costs to bear.

ARAG do not believe that this is good use of public funds and we continue to lobby the Government over the same.
Indeed, our previous blog of 5th January on the Insurance Premium Tax changes and the impact this will have on the NHS also refers here.

For our solicitor partners, they can be reassured that ARAG continues to be the high quality ATE provider of choice, and experts in the field of premium recoverability.

Should any solicitor partner of ARAG have any queries on premium recoverability, please contact your Account Manager, or if you do not have one, please contact Mike Knight, head of ATE Business Development – mike.knight@arag.co.uk
 
 

Meet our new starters

Ian Herbert has joined as Underwriting Manager and will oversee both BTE and ATE underwriting operations.
He brings with him more than 30 years’ experience from Endsleigh, Hill House Hammond, Mark Richards and, most recently, B4 Group. 

“I’ve worked with ARAG in recent years and found their flexibility and innovation really refreshing.” comments Ian.
“It’s great to be joining such a friendly but professional team that has a strong reputation among brokers for bending over backwards to make things work for their clients”.

Mark Cashman, who joins ARAG as Product Development Advisor, has almost 25 years of experience in the legal expenses sector and has since worked at Locktons.“ARAG has always had a reputation for developing interesting new covers that shake up the market and really add value for partners and their clients.” says Mark. “I’m really looking forward to being part of that and working among so many familiar faces.”

Head of Underwriting and Marketing, David Haynes, commented on the appointments:
“Our significant growth in recent years has created a number of key opportunities at ARAG, that we’ll be filling this quarter. We’re lucky to have so many experienced candidates to choose from, especially here in Bristol, and I’m pleased to welcome Mark and Ian into the ARAG family.” 

Also new to the company this year is Sian Thomas, who has been appointed Account Manager in ARAG’s ATE division. Sian has some 10 years’ experience in the industry, during which she has worked in a number of broker-­‐facing roles.

- Ends -

  

For more information please contact :

Rachael Wornes, Marketing Manager, ARAG UK, 0117 917 1578, pressoffice@arag.co.uk

Paul Jacobs, Director, Consultable, 079 0982 1731, paul@consultable.co.uk

Latest research about litigants in person

Make sure your clients do not end up representing themselves in court through lack of choice. 

The available evidence indicates that the proportion of litigants appearing before the civil and family courts in England and Wales without legal representation (litigants in person) has increased since the Legal Aid, Sentencing and Punishment of Offenders Act 2012 took many civil and private law children and family cases out of scope for legal aid from 1 April 2013.

The changes to the scope of civil and family legal aid have proved controversial.  Concerns have been expressed about the effects on individuals who are no longer eligible for legal aid to resolve legal problems and on the courts which must deal with increased numbers of litigants in person.  Whether the reforms will generate the savings that have been claimed – or whether the increased numbers of litigants in person will drive up costs - has also been debated.

 Reliable data on LIPs is scarce Most of the data that are available concern LIPs in the family courts, although the legal aid reforms are likely also to have increased the number of LIPs in civil law courts.

Are litigants in person now qualitatively different?

In its own inquiry into the impact of the changes to civil legal aid, the Commons Justice Committee heard evidence to suggest that not only were there more LIPs, they were now qualitatively different.  In the past, LIPs had been in the courts by choice but now they were there because they could not get legal aid.   The Committee voiced concern that some LIPs might have difficulty in presenting their case.

Download the full report
Litigants in person: the rise of the self-represented litigant in civil and family cases in England and Wales 

Make sure your clients do not end up representing themselves in court through lack of choice.  Opting in to legal expenses will provide access to professional legal representation for a range of everyday legal problems should it become necessary to enter into mediation or take a claim to court to protect their legal rights.