Legal Watch Whatâ€™s on the horizon January 2014
Introduction Welcome to the first joint Plexus/Greenwoods’ review of what the next quarter holds for those involved in personal injury claims.
In This Issue: • Cost budgeting and case management by the courts • Reforming the way claims for mesothelioma are processed • Discount rate • The low value claims ‘portals’ • Whiplash • Reform of the private motor insurance market • Costs
Events Plexus and Greenwoods hold a series of events which are open to interested clients. See below for those being held in the next months: An Audience With... Caroline MItchell of the Financial Ombudman Service | 21.01.14 | London MBIG Seminar | 22.05.14 | London
• ASHE data • Third Parties (Rights against Insurers) Act 2010 • Recovery of Medical Cost for Asbestos Disease (Wales) Bill • The legal market place
Cost budgeting and case management by the courts
Comment: There is real concern that the tail (the courts) is
place, there is no indication that a decision on lowering (or
now wagging the dog (the legal profession). The emphasis
raising) the discount rate is imminent.
Comment: Despite the extensive consultation that has taken
has suddenly switched to the courts controlling evidence and costs without necessarily having regard to the issue of justice between the parties. This is leading to a climate of fear, with costs being front loaded to minimise the risk that orders cannot be complied with. Mistakes will occur, even in the best regulated firms, but unless the error is classed as ‘trivial’ the consequences may be draconian.
The low value claims ‘portals’ Comment: As the number of claims being handled through the two existing portals increases, patterns of behaviour also become clearer. There are currently three primary areas of concern: • Defendants’ representatives must not contact claimants
Reforming the way claims for mesothelioma are processed
direct, once they become aware that a solicitor has been appointed, usually because a CNF is received. • There is still a problem with more than one claimant
Comment: After an extensive and lengthy consultation
representative sending in a CNF. While the onus is on the
process the government has decided not to introduce a new
retained solicitor to deal with any problems created by the
Mesothelioma Pre Action Protocol to promote out-of-court
actions of other firms, insurers should seek confirmation
settlements but will now work with all parties to improve
of which firm has been appointed. Both the insurer and
the existing process. Proposals to fix the fees for lawyers
the claimant’s solicitor are entitled to complain to the
making claims will also not be taken forward at this stage.
Information Commissioner’s Office and/the Solicitors’
However, for claims commenced from July 2014 claimants
Regulatory Authority and so it is worth looking out for
will not be able to recover CFA success fees or ATE premiums. Consideration is still being given to establishing an electronic case management ‘portal’ for mesothelioma claims.
repeat offenders. • So called ‘pre-med offers’ are popular with some insurers but are frowned upon by the Portal Behaviour Committee. It should be noted that if an independent medical panel is created to deal with whiplash type claims (see below)
Running alongside these measures is the Mesothelioma
such offers may be outlawed. The requirement that all
Bill which is to establish a diffuse mesothelioma payments
claims should be ‘proved’ by medical evidence is directed
scheme to compensate those who cannot trace the liable
at discouraging fraudulent and exaggerated claims, an
employer. In its current form the Bill provides for tariff
issue which does appear to be reasonably high on the
payments of up to 75% of the level of damages recoverable
under a civil claim. Legal costs will be fixed, probably at £7,000. The scheme will be funded by a levy on insurers.
A ban on pre-med offers would probably coincide with a ban on law firms offering inducements to potential claimants.
Comment: The government’s preferred option for dealing
Comment: An extensive consultation is underway to
with the ‘scourge of whiplash’ appears to be the creation
review the guideline rates for solicitors’ costs. It is to be
of a panel of single joint experts to provide truly objective
hoped that once rates are set for each grade of fee earner,
reports. If there is to be confidence in this solution, it is
in each geographical region, the grounds for applying for
imperative that insurers and their representatives should
any enhancement will be removed or limited to the most
lobby for any panel to comprise only experts who have
been accredited; who are subject to vigorous monitoring; and who may be subject to disciplinary action if found to be preparing reports not to the requisite standard. In its latest report the Transport Select Committee expressed concern that the government had not adequately addressed some of the evidential issues surrounding whiplash claims. However, it also that suggested that there should be a clearer strategy for ensuring that any resulting savings should be reflected in a reduction in motor premiums.
Reform of the private motor insurance market Comment: The Competition Commission has delivered its preliminary findings on the provision of private motor insurance and related goods or services. It has expressed concern about the way in which non-fault drivers’ insurers are able to seize control of the repair and claims processes with neither the at fault insurer or the claimant having any means of exercising any control.
There is concern that this major exercise is being undertaken on the basis of inadequate research and at the wrong time, given the continuing fall-out from the Jackson reforms. Alongside all this 2014 will see costs’ budgeting bedding down and the first batch of cases testing the boundaries of One-Way Costs Shifting.
ASHE data Comment: The revised data was delayed until 12 December. Table 25.6a combines ASHE 6145 and 6146 to produce an equivalent to SOC2000 code 6115.
Third Patries (Rights against Insurers) Act 2010 Comment: Although this legislation received royal assent in March 2010 and it was announced that it would come into effect as soon as possible in 2013, the government has confirmed that no date has yet been set.
The principal solutions suggested are: • Replacement vehicles should be the responsibility of the non-fault driver’s insurer with no right of recovery of the cost from the at fault insurer; or • The at fault insurer should have the option to handle the claim to such extent as it feels appropriate. • There is to be further consultation but it is clear that the existing arrangements for providing credit hire vehicles
Recovery of Medical Cost for Asbestos Disease (Wales) Bill Comment: This Bill, which seeks to extend the recoverability of medical treatment costs from defendants, was seen as the possible thin end of a much wider wedge. However, there were also question marks over it legality and it has now been referred to the UK Supreme Court.
and for vehicle repairs by non-fault insurers are unlikely to survive.
The legal market place Comment: The coming year is likely to see a seismic shift in how legal services are provided. There will be a mix of ABSs absorbing firms and teams of lawyers; mergers and acquisitions in response to the need to ‘grow to survive’; and firms failing as they realise that the market has moved on without them.
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The information and opinions contained in this document are not intended to be a comprehensive study, nor to provide legal advice, and should not be relied on or treated as a substitute for specific advice concerning individual situations. This document speaks as of its date and does not reflect any changes in law or practice after that date. Plexus Law and Greenwoods Solicitors are trading names of Parabis Law LLP, a Limited Liability Partnership incorporated in England & Wales. Reg No: OC315763. Registered office: 8 Bedford Park, Croydon, Surrey CR0 2AP. Parabis Law LLP is authorised and regulated by the SRA.