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What does Briggs’ Interim Report mean for insurers?

13 January 2016

Yesterday saw the publication of the Interim Report by Lord Justice Briggs on the proposed introduction of a new Online Court (OC) capable of handling claims worth up to £25,000. Depending on the outcome of the final report it is possible that the intended new court could deal with a sizeable part of the claims handled by insurers who will be interested in what the new OC process will look like and the types of claim likely to be affected.

The report was in fact presented to the senior judiciary in December, though has only now been published. By the time the report was completed the government’s Autumn Statement had happened, so Briggs looks at how the introduction of an Online Court would fit with a rise in the SCT limit, as well as in relation to injury claims generally.

Summary

Briggs sees considerable advantage in the use of the portals, and clearly thinks that should continue. The availability of the portal process indicates to him that the new OC is not needed for those types of claim, even though the report seems unaware of the use of fixed costs for most types of claim starting off in the portals.

While Briggs is attracted to the idea of claims which are below an increased SCT limit of £5,000 using the OC, this is inconsistent with the fact that those claims would still expect to use the portals. We see the advantage in the consultation process of making Briggs aware of the current use of fixed costs and the need to extend them across the fast track, while the relationship between the OC and the use of fixed costs needs further thought.

Part of the picture

Briggs’ interim recommendations fit with the announcement in the Autumn Statement of £700m being available to “fully digitise the courts”, with the support for online dispute resolution from Michael Gove, and also the Susskind report in favour of Online Dispute Resolution from early last year. Briggs invites written responses to his interim report by the end of February, and after further consultation he is required to produce a final report by the end of July.

The end of paper in the court process

Breaking the “stranglehold” of use the use of paper in the court process is seen by Briggs as fundamental to the establishment of the OC. He says he has conducted the first stage of his review as a paperless exercise himself and says that he found it “an education and a liberation”. Insurers and indeed their lawyers have been on the same journey over recent years and should find their own paperless experience useful when it comes to use of the OC.

Digital technology will he says introduce flexibility into the court process, though he accepts that some will find it revolutionary. Instead of using paper, cases will progress in the OC with the use of technology, the OC being accessed through an online portal.

From there, software will be used by claimants to give details of their claim, including by use of tick boxes and drop-down options, and documents and other evidence will be uploaded. Defendants will submit their defence in the same way. There would be “Assisted Digital” provision for individuals who do not have the necessary IT skills.

Contact with the court will be online, by telephone or video (including presumably by Skype) and when needed face-to-face.

A new court

Briggs expects the OC to be a new court, designed from scratch and built from the foundations upwards. It would stand as a separate court, with its own separate rules, and so would not be governed by the CPR. The rules that are needed would be drafted with input from advice agencies representing litigants in person, rather than by the Rule Committee.

The OC would be designed for use without lawyers, or so that they need only be used to such a minimal extent that their services could be sensibly afforded. That is not to say that parties would be barred from using lawyers, indeed Briggs seems to have in mind them providing advice and assistance when cases are prepared where litigants require that, though the parties would potentially be capable of dealing with the OC process themselves.

It would be compulsory to use the OC for the types of cases falling within its remit. This shows the importance of identifying excluded types of claim. There would be no costs-shifting between the parties, except perhaps in cases of misconduct, much as is the position on the SCT now.

Why the OC is needed

According to Briggs, the biggest weakness of the civil courts currently is that with limited exceptions, they do not provide reasonable access to justice for any people except the wealthy. This he says is because the process has been designed by lawyers, for use by lawyers and is therefore costly to operate. The expense is added to by the use of precedent cases as part of the judicial decision making process and which is time-intensive.

As a result, he says it is disproportionately expensive and unaffordable to pursue small and medium sized claims, because of the costs liability that would be incurred to a potential litigant’s own lawyers, as well as the potential exposure to the other side’s legal costs. Potential litigants are priced out of the market, which says Briggs is “a truly shocking state of affairs”. While the report’s position on this issue is understandable based on anecdotal reports such as the recent ones from the NHSLA in clinical negligence cases where of course costs are not fixed, the point is more difficult to understand in scenarios where costs are already fixed.

One exception in Briggs’ view is that in injury claims, CFAs do in fact provide access to justice for claimants, but that the issue there he says is the disproportionate level of costs incurred, which he says has not yet been controlled by the Jackson Reforms, and which therefore impact on motor and EL premiums.

Again, his point would seem to be met by the use of fixed costs in most of these types of claim, of which he makes no mention, though he does refer also to clinical negligence cases having this problem where fixed costs are yet to be introduced. One answer to his point would be to fix costs across the fast track as of course Lord Justice Jackson had intended, which then would catch disease claims outside the portal as well as clinical negligence and non-injury claims.

It seems clear that he does not see the SCT itself as the answer, noting that it does not even have its own set of rules but is reliant on using the CPR. Anyway, he sees the SCT as also giving rise to the problem that its procedure still puts litigants in person at a disadvantage when lawyers are on the other side.

A 3 stage process

The same 3 stage process proposed by Susskind seems appropriate to Briggs.

Firstly, there would be what he calls “Triage” when both parties would use the online portal to complete forms setting out details of their cases and file the evidence in support.

At the second stage there would be a mix of conciliation and case management by a case officer which would take place online, or by telephone. The conciliation would be a normal part of the process rather than an add-on as with ADR.

Thirdly there would if needed be determination of the case by a judge, either on the basis of the documents filed online, or by telephone, video, or face to face. The process would be less adversarial and the judge’s role would be investigative.

What cases would be within the OC?

Briggs is looking to include claims within the OC where he sees that otherwise the costs of litigating would be disproportionate. He thinks as a result there is a case to include claims with a value well above £25,000, and probably also above £50,000. Certainly, he says, he thinks claims with a value of up to £25,000 should be included. He can see using £10,000 as a temporary initial limit might be appropriate, as the first level of a 2-stage journey on the way to £25,000. This of course currently is the boundary between the fast track and the multi-track.

He sees that claims involving children should be excluded because no doubt of the need to judicially approve any settlement.

The big question – what about injury claims?

Briggs accepts that this is a more contentious question and it will no doubt be reconsidered in the final report. There is clearly an additional aspect to consider caused by the proposed SCT rise too.

While Briggs sees an argument that injury claims should be included in the OC process because of the “wildly disproportionate” costs incurred on cases going to trial, on balance he accepts the argument that injury claims should be excluded from the OC. This is on the basis that a suitable alternative already exists for them, that is the use of the portal which he sees as providing an “efficient, streamlined and effective” process, together with use of Part 8 proceedings to obtain a judicial decision at stage 3 of the portal process if required.

The report’s evidence for the “wildly disproportionate” costs incurred on cases going to trial is not stated. It could not be a reference cases starting off in the one of the portals as of course costs through to trial in them are now fixed. As stated, the report does not refer to the existence of fixed costs in various types of claims up to £25,000, though of course not all claims types have fixed costs.

Perhaps his reference is to cases outside the portals such as clinical negligence claims to which the Department of Health have been giving publicity recently in support of the aim of introducing fixed costs into that area, or to disease claims dropping out of that portal, or indeed to claims pre-dating the introduction of the casualty portals?

While costs in neither of those two types of claims are currently fixed, steps are already being taken in both disease and clinical negligence claims which are expected to lead to that happening. But in any event, the report does not see that argument as sufficient to change its conclusion that in principle injury claims should be excluded from the OC.

A second argument in favour of exclusion of injury claims from the OC is said by Briggs to be the fact that a claimant would be dealing in the claim with what he calls “a large insurance company” and that to level the playing field he or she should be allowed to use a lawyer as the current portal process provides for. Insurers may wish to make representations in this area as part of a consultation response.

On this basis, if the conclusions of the initial report find their way into the final report, the start of the OC would not impact greatly on insurers’ handling of injury claims. Briggs might be also be stronger on the point once the effect of fixing the level of costs in most of these claims is appreciated.

Other claims dealt with by insurers which do not involve injuries and which do not therefore fall within any portal process might potentially be included within the OC, but again this would be subject to the level playing field argument.

Effect of the proposed SCT rise to £5,000

This news will have broken as the interim report was near to being concluded. Assuming this increase takes place, Briggs goes on to say that he sees the OC as being the right venue for injury claims up to a new £5,000 SCT limit. It seems to us that this part of the initial report may need further thought.

He presumably would include this type of claim within the type of relatively straightforward damages claim which he sees as suitable for the OC. But at least as far as RTA, EL, PL and EL disease claims of that type are concerned; those claims would of course fall within the current portal processes which Briggs has accepted are “efficient, streamlined and effective”. On that basis it is rather difficult to see the basis of his initial recommendation that they should be included in the OC instead.

The initial report makes no reference to the other intended reform highlighted in the Autumn Statement of removing the right to claim damages for PSLA in minor whiplash claims. Leaving to one side the need to reconsider the claims process in claims of that type where only special damages can be recovered (which is beyond Briggs’ remit), the interim report can be seen to be considering the most appropriate process in other injury claims where PSLA can be recovered but that element of the claim is worth less than £5,000.

But as far as those claims are concerned, where an alternative already exists in the form of the portals to which the report gives very positive feedback, it seems difficult to justify its interim recommendations that a move to the OC would be suitable. This, to us, needs further review.

Lord Justice Briggs is of course a judge of the Court of Appeal, with a background in chancery work, so perhaps it can be taken that there is a need for consultees to provide additional input when the Briggs team are considering the most suitable way forward for small injury claims. His knowledge of the portals has only recently been acquired, and it is unclear whether the extent of the existing use of fixed costs is appreciated.

Next steps

Insurers like others have the opportunity of submitting responses to Lord Justice Briggs by 29 February. By the time his final report is submitted to the senior judiciary by the end of July further progress with the Courts and Tribunals Service’s own Reform Programme will have advanced, and it is reasonable to assume that Briggs will be relevant in deciding what an Online Court will look like. The Susskind report spoke of roll-out of an OC in 2017. Time will show whether this remains realistic.

There seems to be a need to ensure that Briggs is aware of the current use of fixed costs, and a consultation response could take the opportunity of encouraging progress towards them becoming available across the whole of the fast track, even though widened fixed costs would then be covering the same claims that would be affected by the OC.

The relationship between the use of fixed costs and also of the OC needs further thought and this should be an area of focus for the final report. It is only when that question is answered will insurers know the extent to which their claims are likely to use the expected new OC processes going forward.

Contact

For more information please contact Simon Denyer, Partner on +44 (0)161 604 1551 or email simon.denyer@dwf.law

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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