Government intention to follow through on reforms still in place while APIL conference responds to the threat
Over the last two days in Birmingham the Association of Personal Injury Lawyers has been having their annual conference. It is worth having a look at what came out of it not only as a keynote address was given by Lord Faulks, Minister of State for Civil Justice, but also to help gauge the way in which the claimant lobby is responding to the key threat presented to them by the surprise reform package announced by George Osborne in November’s Autumn Statement.
In summary, the MoJ are pressing on with an unchanged agenda and the consultation could now be about 2 months away if it is delayed until after the EU referendum. In response to what the claimant lobby sees as their “greatest of challenges”, both APIL and the separate Access to Justice group are developing thought-out responses, see the need to get public support for their positions, and are trying to win over MPs who may be willing to vote against the reform package once the parliamentary stage begins.
MoJ policy confirmed
Lord Faulks referred to the intention to follow through on reform of civil justice and especially personal injury claims. Despite seeing a modest reduction in the number of injury claims since LASPO, the issue he referred to was that the level of RTA claims was still 50% higher than 10 years ago.
The government therefore intends to press ahead with its reform package: both the removal of general damages from what he referred to as “low value soft tissue injury claims” as well as raising the SCT limit for PI claims to “at least £5,000”. Lord Faulks accepted that they would cause “a bit of a shock”.
On timing, he said the intention was still to publish the awaited consultation “in due course” though this could now well be after the EU referendum on 23 June. There is then 4 weeks till the Commons start their summer recess on 21 July. It seems quite possible that we should expect it and its accompanying impact assessment during that 4 week window.
As to implementation, this would be through he said a mixture of primary legislation (no doubt he means the PSLA withdrawal) and secondary legislation (for the SCT rise) with the aim being to have implementation in 2017. It seems to us though that the delay in issuing the consultation which is only the first stage in the process hardly inspires confidence that any timetabled currently aspired to will in fact be capable of being met.
The rationale behind the main reform
We heard something more on this from Lord Faulks. He identified these as key factors:
While many PI claims are genuine, there were also “many fraudulent, exaggerated and trivial whiplash claims made each year”.
“The level of compensation paid out for such claims is out of all proportion to any genuine injury suffered especially when balanced against the effect they have on the premiums paid by ordinary motorists.” Removing those claims from the system would help to tackle the disproportionate costs attached to dealing with them.
It was not right that “people who try to cheat the system should get away with it” and by doing so force up premiums for others.
Many such claims were “driven by a substantial injury that encourages unnecessary, inappropriate or even fraudulent claims through cold calling and other social nuisances.”
He looked over to Scotland where he thought there was no whiplash problem, and tellingly said he saw no CMC culture there.
The SCT limit rise
The “time was right” said Lord Faulks to increase this after 25 years. His view was that most minor PI claims could be dealt with on the SCT without engaging lawyers, though equally noted that claimants would not be prevented from involving a lawyer. He did not think that claimants (presumably those with a genuine claim) would be frightened off from claiming by an SCT limit rise.
Other points from Lord Faulks
Government was pleased with MedCo and its work after 1 year, and that it was now sourcing 40,000 reports per month
Government supported the principle of extending fixed costs and “is now considering the way forward, including how best to deal with differences between types of civil litigation”
He did not think that there would be all that many fundamentally dishonest claims, but the aim of the reform introduced by s.57 of the Criminal Justice and Courts Act was to deter claimants from exaggerating claims in order to gain higher damages
The insurer angle from the APIL conference
This was provided by David Williams, AXA Technical Director. He is reported as saying that:
Government focus seemed to have been changing from dealing with fraudulent claims onto unnecessary ones
Whiplash claims were currently seen by many in his view as “free money”
Claimant lawyers had already lost the argument on the SCT rise and now should instead be focusing on the main reform of removing PSLA in minor whiplash
The task of defining soft tissue injuries so as to designate claims falling into that reform may be “mission impossible”
The APIL angle
The clue is in the title: in this case of the conference itself – “Winning hearts and minds”. They don’t say whose, but they may have in mind the British public generally, but those of MPs and perhaps Conservative MPs in particular as far as the future progression of a Bill through parliament is concerned.
They say on their conference agenda that “never has it been more important for PI lawyers to join together to fight for justice for injured people”.
Their new president referred in the same vein to the hope that PI lawyers should show that they were there “to make a difference to injured people rather than just chase the money” in an apparent acceptance of at least a degree of personal interest on the part of those lawyers.
When focusing on the SCT reform he raised the potential of the government overlooking unintended consequences of its reforms, saying that it was likely that they would see CMCs move into the area below an SCT raised limit as solicitors exited, leading to even more cold calling.
And APIL are launching a new campaign they have just announced called “Can the spam”, looking to persuade government to introduce a ban on CMCs’ cold calling, trying to demonstrate the existence of other ways of tackling the current issues.
Access to Justice
Additional opposition to the reforms now comes from this group, also known as A2J, whose website is at http://accesstojusticeactiongroup.co.uk/ This is an ad hoc group of claimant law firms and others set up to fight against the reforms under the leadership of Martin Coyne, managing director of Ralli Limited, solicitors in Manchester. Some of their members are listed on the first page of their website.
Their arguments seem currently based around what they see as the prematurity of the reforms relatively soon post LASPO; the suggestion that the reforms would be unworkable for reasons such as the extra pressure which would be imposed on courts and judges from unrepresented claimants; and they also refer to what they see as unreliable data currently being relied on by government in support of the reforms.
They also identify the cost of the reforms in terms of loss of taxation income, of court fees and of CRU/NHS recoveries, as well as the cost of the payment of more out of work benefits for those currently employed in the industry.
They see the advantage like APIL of winning over minds. Their website has template letters for claimant law firms, staff working at them, as well as claimants themselves, to send to MPs and local newspapers.
They may be preparing their own data analysis with the support of research analysts, presumably with a view to querying insurers’ figures on likely savings that would arise from the reforms, set against what A2J would see as additional costs arising from the reforms.
They have also publicised the result of their own survey as to how 2,041 members of the public viewed the reforms, and how they would pursue any claim if they were introduced. They report that 58% of those surveyed thought the reforms to be unfair, 20% thought them fair while 22% did not have a view.
Asked whether they would claim post reform and if so how, 25% said they would represent themselves, 19% would involve a lawyer, 26% would not claim at all while 30% did not know. A fairly even split perhaps? There is no reference in the report to there being an option within the survey of saying that a CMC would be used.
Progress through parliament is crucial for the reform package because of the need for primary legislation on the main part of the reform. Government will know this cannot be taken for granted. It is unsurprising that A2J have identified the need for them to involve MPs if their message is to be heard and is to prove decisive.
Oral questions to the MoJ on 26 April were fielded by Justice Minister Dominic Raab who was faced with criticism of the reform agenda from two Labour MPs and one Conservative MP who asked whether there had been an assessment of the potential effect of the reforms on access to justice; challenged the lack of verification of the existence of a fraud culture; asked whether it would not be more effective to stop “ambulance-chasing CMCs instead”; and asked why when courts had the power to strike out fundamentally dishonest claims already the majority should now be penalised due to the potentially criminal behaviour of the few.
After the consultation is over, the government task will be to secure a majority for its reforms in both houses, and there seems to be early confirmation here that this cannot be taken for granted. The claimant lobby will be looking to persuade Tories in particular of their case in order that the measure runs into trouble in the Commons. Similarly, some opposition must be expected in the Lords, though the extent of it is not yet apparent.
We may therefore be seeing the consultation in about two months’ time. There is no mention as yet of the SCT increase being brought forward independently even if the ongoing delay in the process so far calls in doubt whether in fact implementation in 2017 for the entire package remains realistic. Could that date in fact become 2018?
And the big issue remain: at what level should minor whiplash be set and how is that concept is to be defined? This will be a key part of the consultation process. One issue is getting that definition right; another is to do so in a way that parliamentary approval can be secured. Is the Impossible Missions Force available to find an answer on that one?
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.