piBlawg

the personal injury and clinical negligence blog

A collaboration between Rebmark Legal Solutions and 1 Chancery Lane

Government Whiplash Reforms - On Hold?

The Law Society Gazette is reporting that the Justice Secretary is not intending to proceed with the personal injury reforms set out in last year’s Autumn Statement “at the moment”. We blogged on those proposals at the time here which, as a reminder, were that the small claims track limit should be raised to £5,000 and the removal of the right to general damages for minor soft tissue injuries. Apparently the MOJ has stressed that it is still committed to tackling the high cost of whiplash claims. The Gazette reports that fresh proposals are in the works and could be introduced by the end of the year. It seems the original proposals came very much from the Treasury rather than the MOJ so it will be interesting to see what the MOJ’s solution is. Hopefully they will find a formula which will satisfy everyone by effectively tackling fraud while maintaining access to justice. As ever, watch this space for updates.

Autumn Statement for PI Lawyers

The government has released a summary of the Autumn Statement with 20 Key Announcements, the last of which will be of great interest to personal injury lawyers. It reads as follows: “20. People will no longer be able to get cash compensation for minor whiplash claims To make it harder for people to claim compensation for exaggerated or fraudulent whiplash claims, the government is ending the right to cash compensation. More injuries will also be able to go to the small claims court as the upper limit for these claims will be increased from £1,000 to £5,000. This means that annual insurance costs for drivers could fall by between £40 to £50 a year.” George Osbourne anticipates these changes “will remove over £1bn from the cost of providing motor insurance” and expects insurers to pass on that saving to consumers. There had already been speculation over the last week that the government was going to introduce its previously shelved plan to increase the small claims limit for personal injury claims when the insurance fraud taskforce reported next month. What is surprising though is the reference to “ending the right to cash compensation”. It is as yet unclear what it meant by this. Footnote 55 to the Autumn Statement gives some clarification by explaining that “Claimants will still be entitled to claim for ‘special damages’ (including treatment for any injury if required and any loss of earnings) but entitlements for general damages will be removed.” It will be interesting to see though how it will be decided that a case falls into the category in which there is no entitlement to general damages. Elsewhere in the Autumn Statement is a statement that the government will reduce the excessive costs to insurers of whiplash claims by “removing the right to general damages for minor soft tissue injuries”. This would seem to cover more than just whiplash injuries. There may also be interesting arguments where multiple injuries are involved. These problems are unlikely to be straightforward and may result in substantial argument, inevitably using court time. It seems likely we will have to wait for the report of the insurance fraud taskforce, due before the end of the year, for further details.  Keen readers who can’t wait until then might be interested in the research briefing published in advance of last Wednesday’s debate in Parliament. Otherwise, watch this space!

Are there discernable trends in the RTA claims sector?

How effective have recent reforms been in reducing the number of road traffic injury claims and their associated costs? The Institute and Faculty of Actuaries reports there has been a slight rise in claims by 1.7% between 2013 and 2014 which is less than suggested by the portal where claims notifications are back to pre-LASPO* levels. Average costs of claims are also increasing again (by 3%). These conclusions are drawn by the Institute’s interim findings on 2014 data. The number of claims fell by 9.9% between 2012 and 2013 which is consistent with MoJ Portal Statistics. The reduction in average costs in 2013, following the introduction of LASPO, was 15%. Understandably, however, the Institute says that the long-term effects of legal changes (such as those introduced by LASPO) remain uncertain. The turnover of authorised personal injury claims management companies reduced from £455m in the first quarter of 2012 to £354m in the same quarter in 2013 and then to £238m in 2014. However the first quarter of 2015 saw turnover rise by 30% to £310m. Meanwhile motor insurance premiums have risen by an average of 2% per year between 2008 and 2015. That said, the first quarter of 2015 has demonstrated a reduction of 0.5%. Such reports will undoubtedly be watched carefully by all sides for trends and the government will want to tighten the system if it does not think it reducing costs can claims enough. At the moment the long term trends are not readily discernible. This may mean that the system will remain as it is for at least the short term. The report is packed with further data: Average car mileage per year has fallen by 11% since 2003 The total number of licensed cars has risen by 13% since 2003 The total mileage driven in 2014 is back to the 2003 level Congestion has increased year on year since 2011: the average speed in 2014 was 24.1 mph In 2014 there was a total of 194,477 casualties as a result of road traffic accidents In 2014, 1775 were killed, 22,807 were seriously injured and 169,895 slightly injured Pedestrians, pedal cyclists and motorcyclists account for disproportionately more casualties than would be expected given the distance travelled Liverpool remains the claims capital of the UK with 55% of claims arising out car accidents involving damage to property of another driver also involving a claim for personal injury (the national ratio is just above 30%). The lowest ratio of personal injury claims to property damage claims is in Scotland (20%) The highest ratios are in the North East (33%) and the North West (43%) The full report can be viewed via this link *LASPO - Legal Aid, Sentencing and Punishment of Offenders Act which came into force on 1st April 2013

More Political Uncertainty for PI Litigators

Ian Miller’s recent post looking at of what party manifestos might tell us about the way ahead for personal injury lawyers identified a large number of potentially significant and yet radically differing changes ahead. Which actually lay in store for us was, of course, going to be dependent upon which way we voted – and upon which post-election alliances were formed and the compromises that were going to be required to hold them together.   Surprisingly, only a short time after that post was published, we find ourselves in a position in which a much clearer outcome has emerged from that election than appeared likely at the time of Ian’s post. Whilst the Green Party’s proposal to bring back legal aid never really appeared to have much of a chance of being implemented, it did at times appear that a return to one-party government was not a great deal more likely. Nonetheless, that is where we find ourselves.   As a result, one might expect that we would be able to move on from the election better able to plan for the future with a degree of certainty as to what might lie ahead. Despite the relatively conclusive outcome to the election, whether this is in fact the case for personal injury lawyers is however questionable. The “in-out” referendum promised in the Conservative manifesto makes it (still) very difficult to predict what might lie in store – whatever the result and whatever interpretation one might put on the contents of that manifesto.   Opposing views as to which outcome of the referendum might be preferable are beginning to appear in the media - despite the fact that there appears to be very little (or no) suggestion as to what changes might be wrought by the “new settlement” to which the manifesto refers. Insofar as it might affect the business of personal injury litigation, the possibilities seem both endless and potentially very far-reaching, whether we end up with a novel basis of membership of the EU or indeed no membership at all.   The possibilities for change (whether intended or not) are myriad – whether under a “yes” to a novel settlement or a “no”. One can only wonder what might ultimately be the subject of renegotiation or an “opt out”. What, for instance, would be the position in relation in relation to claims arising from road traffic accidents abroad? Would claims arising from package holidays still fall to be dealt with in the same way? Would potentially diverging consumer standards impact upon product liability claims?   It is equally hard to see how any degree of disengagement from the EU would or could permit a status quo to be maintained, even where this might be perceived as a desirable compromise position in relation to a particular areas of law. Were this approach to be tried, it begs the question of what would happen when and if the remaining states revised the current situation. Would it necessitate renewal of the UK’s agreement to the position? Would it leave the UK outwith that agreement? Or would it leave us in some other position entirely?   Equally, were we to see a particularly emphatic “no” vote, could this be perceived as a mandate to “undo” some of the six-pack regulations or other legislation widely perceived as imposing “red tape” upon public bodies and employers? Given the contents of the recent Enterprise and Regulatory Reform Act 2013, it may not be a surprise if this were so.   So many questions – so few answers. Deciding how to vote in any such referendum is going to be challenging for anyone. To what degree it will be possible to make an informed decision about the issues potentially affecting personal injury litigation remains to be seen.   It can only be hoped that potentially significant changes receive the publicity and scrutiny that their significance would merit. Given the apparent lack of appreciation of the significance of the changes wrought by the Enterprise and Regulatory Reform Act 2013 prior to its coming into force, it does not seem to be inappropriately pessimistic to wonder whether this will in fact be the case.   Time, as ever, will no doubt tell…

Insurers’ proposals for further reform to the PI sector

The Association of British Insurers' website recently set out its top 10 insurance and savings priorities for the next parliamentary session. The most striking of these for personal injury lawyers is the proposal for “Modernising the civil justice system to get compensation to claimants rather than lawyers.” The ABI fleshes this out by suggesting increasing the small claims track limit for PI claims, considering a reduction in the current 3-year limitation period and using fixed legal fees to address the rise in industrial deafness claims and ensuring people suffering from asbestos related conditions get compensation quicker. Another of the ABI proposals which would also affect the PI sector is a proposal for “Cracking down on the behaviour of Claims Management Companies” by requiring them to comply with a more robust regulatory regime and stopping nuisance calls and texts. Some consider that pressure from the insurance industry played an important role in bringing about some of the reforms which occurred in the last parliament. The themes in the proposals are familiar and are not new. Indeed the last government consulted on some of these matters. However the ABI clearly wants to keep these issues on the agenda and it will be interesting to see what pressure is exerted in the next parliament for further reforms which could have far reaching consequences for PI lawyers and litigants. The whole list can be viewed on the ABI Website

Personal Injury and the Party Manifestos

Is there anything in the parties' manifestos which might affect the field of personal injury? Reforms since 2010 include a new fixed costs regime, costs management/budgeting and greatly increased court fees. Civil liability has been removed for breaches of health and safety regulations. But what is being promised for the future? The Conservative Manifesto includes a pledge to reform human rights law. It would scrap the Human Rights Act and introduce a British Bill of Rights. The intention is that this will break the formal link between British Courts and the European Court of Human Rights making the Supreme Court the ultimate arbiter of human rights matters in the UK.  More is said in the section on the European Union: the Bill will remain faithful to the basic principles of human rights but “will reverse the mission creep that has meant human rights law being used for more and more purposes, and often with little regard for the rights of wider society.” The manifesto also pledges to continue “the £375 million modernisation of our courts system, reducing delay and frustration for the public.” A commitment is also made for an ongoing review of legal aid. The Labour Manifesto takes the opposite view on the Human Rights Act. It states that Labour would protect it and reform rather than walk away from the European Court of Human Rights. The manifesto is silent on what that reform would be. The manifesto also includes a pledge that access to legal representation would not be determined by personal wealth but would remain available to those who need it. The Liberal Democrat Manifesto states that the Liberal Democrats would protect the Human Rights Act and enshrine the UN Convention on the Rights of the Child in UK Law. It specifically states that the Liberal Democrats would take “appropriate action to comply with decisions of the UK courts and the European Court of Human Rights.” The Liberal Democrats have a commitment to introduce a Freedoms Act which would “cut back on the petty over-regulation of everyday life… permitting swimming in open bodies of water.” (Tomlinson v Congleton springs to mind…). They would “carry out an immediate review of civil Legal Aid… and court fees, in consultation with the judiciary…” They would “reverse any recent rises in up-front court fees that make justice unaffordable for many, and instead” spread the fee burden more fairly. They would also retain access to recoverable success fees and insurance premiums in asbestosis claims and where an individual is suing the police. There is also a pledge to support innovation like the provision of “civil justice online” and expansion of ADR. The UKIP Manifesto states that the burden of complying with EU laws on health and safety can be overwhelming for small firms. The manifesto has a commitment to repeal EU Regulations which stifle business growth. As to human rights, UKIP would remove the UK from the jurisdiction of the European Court of Human Rights and make the UK’s Supreme Court the final authority on matters of human rights. It would repeal the Human Rights Act and introduce a UK Bill of Rights which would complement the UN Declaration of Human Rights and “encapsulate all the human and civil rights that UK citizens have acquired under UK law since Magna Carta.” The Green Manifesto states it will “move towards a written constitution with a Bill of Rights” it also has a commitment to keeping the Human Rights Act and retaining the UK’s membership of the ECHR. There is a pledge to “restore the cuts to Legal Aid, costing around £700 million a year” although it is not clear whether this has anything to do with personal injury. It is interesting that none of the political parties have a commitment to reinstate civil liability for breach of health and safety regulations made under the Health and Safety at Work Act 1974.   Trivia Comparative lengths of the manifestos: Conservatives:                 84 pages Labour:                            86 pages Liberal Democrats:          158 pages UKIP:                              76 pages Green:                              84 pages   Commitment requiring more explanation: “Ban high-frequency Mosquito devices which discriminate against young people.” (Liberal Democrats)

Fee increase to take place next Monday

A dramatic hike in court fees is to take place on Monday 9th March 2015. The Law Society has published the following table (see below) of the new court fees suggesting solicitors consider issuing cases this week.    Employment Tribunal fees were increased in July 2013 and the effect is thought to have been to reduce the number of tribunal claims substantially. It remains to be seen whether the increase of court fees will have the same effect.   The move will inevitably raise questions as to whether access to justice is being made more difficult. It may also sharpen the debate about whether our legal system should be funded by society as a whole or simply by its users: is the civil justice system simply about settling disputes between individuals or does it benefit all of society to the extent that it should be funded overwhelmingly by the state? Is it just a questions of degree?   The Law Society has sent a pre-action protocol letter to the Minister of Justice and it will be interesting to see how it puts its arguments if the matter reaches a hearing. 2 March 2015 Court fees increase from Monday 9 March Government increases in some civil court fees are due to come into effect on Monday 9 March. The increases affect money claims - both 'specified' and 'unspecified'. The Law Society, with other legal professional bodies, has criticised the fee increases and has sent a pre-action protocol letter to the Ministry of Justice. Firms may wish to consider whether they should issue claims this week in order to avoid the increase. Example fee increases: Value of claim £ Fee now £ (paper) New fee £ Increase in fee £ % increase 20,000 610 1,000 390 64% 40,000 610 2,000 1,390 228% 90,000 910 4,500 3,590 395% 150,000 1,315 7,500 6,185 470% 190,000 1,315 9,500 8,185 622% 200,000 1,515 10,000 8,725 576% 250,000 1,720 10,000 8,280 481% Read about our campaign against the increases and our consultation response  

Holding out for the Heroism Bill

The Social Action, Responsibility and Heroism Bill (dubbed by some the “Sarah Bill”) is being returned to the House of Commons, with amendments, following its final reading in the House of Lords on 6 January 2015. The much-maligned and exceptionally brief Bill seeks to introduce a requirement that courts deciding negligence and/or breach of statutory duty cases and in determining the standard of care give consideration to whether the activity or omission complained of was for the benefit of society, whether the person carrying out the activity demonstrated a “predominantly responsible approach” in protecting a person’s safety or other interests and whether (in emergency situations) the person intervened “heroically”.   Clause 4 in particular makes clear that the Bill is aimed predominantly at personal injury cases, although it will apply to non-personal injury cases. Critics of the Bill have suggested that it is largely being promoted by the Government to further protect employers and to appease the insurance industry. Indeed, the Bill has been criticised on several grounds, mostly as being a mere publicity stunt by the Government but also for its vagueness. The Sarah Bill is designed to afford greater protection to volunteers and employers who might otherwise be deterred from performing worthwhile deeds or organising events due to the risk of finding themselves on the end of a negligence claim. The Bill survived an attempt in December 2014 at the Second Reading to remove most of its (four) clauses. At the Third Reading, clause 3 (the social responsibility clause) was amended such that (in assessing the standard of care) the individual’s approach towards protecting the safety and interest of others must have been “predominantly”, rather “generally”, responsible. Clause 4 was also amended, removing the words “and without regard to the person’s own safety or other interests” to make clear that the clause applies equally to those cases where the person (sorry, hero(ine)) assess  the risks to their own safety or other interests before intervening (as well as those where they did not assess the risks). The amended Bill will be considered by the House of Commons on 2 February 2015. If the Bill is passed, there are potentially difficult questions for the judges on the ground to answer. The Bill is somewhat unhelpfully brief and uses terms which are somewhat “foreign”. The first difficulty is going to be determining when a defendant’s action was “for the benefit of society or any of its members.” The clause has a potentially enormous scope. Employers, particularly in the public sector, are likely going to try to fit themselves under this clause. But even if they do, you may well ask, so what? It is only a factor for the judge to consider and is by no means a defence. There is no indication of what weight, if any, judges will place on this factor. Judges will also have to decide on what is meant under clause 3 by a “predominantly responsible approach” in protecting the safety or other interests of others. Again, the potential scope of the clause is vast. Will it apply, for instance, to all medical professionals? Will it apply to any attempt by an employer to introduce some health and safety measure? And what is the tipping point for an approach to be categorised as “predominantly responsible”? There is potential for a stream of cases on that issue alone, unless of course there is a judicial reluctance to engage with the clause and it goes the way of section 1 of the Compensation Act 2006. It is also questionable how many cases will fall under clause 4 (the heroism clause). But for those that do, what do we mean by acting “heroically”? This is an entirely foreign legal concept and is open to a sliding scale of judicial interpretation.  Are doctors acting “heroically” in emergency situations or will the clause only apply to the volunteer, have-a-go hero(ine) which the Government seems to have intended? The Bill, as is stands, is brief, vague and uses terms to which the legal world is not accustomed. Although cases might throw up interesting questions on how to interpret the Bill, one has to wonder whether it will all be for nought. Chris Grayling MP himself has said, "The bill will not change this overarching legal framework, but it will direct the courts to consider particular factors when considering whether the defendant took reasonable care." If judges do not engage with it or consideration of these particulars factors makes no material difference in practice, will defendants even bother to try to fit their cases under one of the clauses? Much like section 1 of the Compensation Act 2006, it will be judicial appetite that determines how effective the Bill’s clauses become. Given the criticism of the Bill in judicial circles, do not expect that appetite to be very strong.  

Legislating for "Statutory Common Sense" and Personal Injury Litigation?

A court considering a claim in negligence or breach of statutory duty may, in determining whether the defendant should have taken particular steps to meet a standard of care (whether by taking precautions against a risk or otherwise), have regard to whether a requirement to take those steps might— (a) prevent a desirable activity from being undertaken at all, to a particular extent or in a particular way, or (b) discourage persons from undertaking functions in connection with a desirable activity. Please excuse the cumbersome language. This is section 2 of the Compensation Act 2006 – a statutory provision which is rather underused by defendant lawyers (and apparently largely unknown to judges). However, perhaps this is not without good reason. Whilst the provision’s introduction was fêted as being a powerful weapon in the hand of the defendant and judge in the fight against the rising tide of personal injury litigation seen since the late-1990s, it clearly has not had much of an effect. Part of the reason for this may well be the slightly vague nature of the terms of the provision: firstly the word “may” instead of “must”; and the obvious subjectivity of the interpretation of the word “desirable”.   This is something of a worry to the current administration, at least following the recent local and European Elections. Concern more widely about ‘health and safety’ (particularly amongst older and more Euro-sceptical sections of the electorate, whose votes may no longer be a safe bet for the current political party in power) appears to have been taken more seriously.   It has recently been widely reported that the Lord Chancellor wants an inclusion in the Queen’s Speech setting out the Government’s commitment to statutory reform to end any ‘chilling effect’ that any such concerns may engender. The BBC reports that the Ministry of Justice “wants to force judges to give weight to three factors in cases where people do end up facing litigation: If the person was doing something "for the benefit of society", such as clearing snow If they were acting in a "generally responsible way" If they stepped in to help in an emergency” It is reported that the MoJ wishes to "put the law more clearly on the side of employers" when something goes wrong at work through no fault of their own”, and that  the “law change would protect small business owners who take a "responsible approach to safety training and procedures" from the challenges of "irresponsible employees". The Lord Chancellor is quotes as suggesting that he would "want a society where common sense is the order of the day, and I believe this measure will help us get there."   So ‘watch this space’ as to whether/how this may change the nature of personal injury litigation…