Soft tissue injury and SCT reform package
12 January 2017
Yesterday’s Access to Justice debate at Westminster Hall allows an up to date insight into prospects for government’s soft tissue injury and SCT reform package
The timing may have been co-incidental but shortly after the deadline for responses to the government’s consultation “Reforming the Soft Tissue Injury (‘whiplash’) Claims Process” closed last Friday, a debate took place yesterday in Westminster Hall entitled Access to Justice at the instigation of the Labour MP and ex-Thompsons partner, Rob Marris MP. An important part of the debate in fact related to that consultation and the issues raised by it and it is worth looking at the speeches made for signs of future developments.
There were signals yesterday that the government is just as firmly committed to the reform as it was when the consultation was announced, arguing that the interests of solicitors was insufficient to maintain the current system. Indications were also given as to how lawyers might be used in the Small Claims Track, while it was also clear that the government continues to see the Online Court and more ADR as better alternatives than the traditional court process.
There was some evidence of an on-going organised claimant campaign against the reforms as 3 ex-Thompsons lawyers spoke during the debate, and in fact there were indications from 2 influential Conservative MPs who spoke in favour of the reforms that their support may not go as far as applying the SCT increase to EL and PL claims. This may have been particularly in the minds of the Labour MPs who spoke.
For the government – Sir Oliver Heald MP
The most important part of a debate such as this is usually the government response to it at its conclusion, and this response fell to Sir Oliver to give as Lord Keen the minister primarily involved in the consultation sits in the Lords rather than the Commons. Sir Oliver can though be assumed to be closely involved with the reform process, as well as of course with civil justice issues generally and his comments will reflect the government position.
His remarks cannot necessarily be thought though to have been given following consideration of consultation responses as it is too early for that, but are illustrative of existing intentions on the part of government.
Current government policy
Sir Oliver repeated the aim to achieve from the reforms a saving of £1bn, which he reminded the debate would account for “a £40 cut in premiums for every motorist in the land”. Talking it seems of the intended SCT rise rather than the entire package, he asked: “Are we to sacrifice that simply to uphold a threshold that has been in place for so many years, since 1991, in the interests of solicitors?”
The concern raised by “the industrial nature of the problem we facewith these whiplash claims and the dubious practices that go with it” was said by him to have “got to the point at which it is a massive problem”.
Rob Marris was no doubt referring in opening the debate to the source usually relied on by claimant advocates in this situation, namely those from an APIL FoI request, when suggesting that there was now a decreasing number of whiplash claims. This is the data which seems unreliable as it separately categorises injuries to the back or neck outside of “whiplash”.
In any event, Sir Oliver did not agree with Rob Marris, pointing out the error which he saw in that data. Sir Oliver continued to refer to the increase in RTA claims between 460,000 in 2005/06 and 770,000 in 2015/16 and to 90% of them being for whiplash as the justification for the proposed reform.
This current figure said Sir Oliver was too high and “the government must take action to tackle this issue and protect consumers”.
The Thompsons angle
Momentum in a campaign against the reforms including especially the proposed SCT rise into EL and PL claims has of course over recent weeks come from Thompsons and the trade union constituency in particular. This was in evidence in yesterday’s debate and seemed not to be lost on Sir Oliver who referred to Rob Marris, Richard Burgon the shadow MoJ minister and Labour party spokesman in the debate, and a third speaker as “the three musketeers of the Thompsons world”.
Light heartedly, Sir Oliver, a barrister, admitted to the most limited of links with that law firm, confessing that he had been instructed by them in the past once, but presumably only once.
Small claims track claims
As to injury claims that would be dealt with within the SCT, Sir Oliver had comments to make both on the use of lawyers, and on possible allocation of small claims to the fast track instead which will of course remain an environment in which costs can be recovered.
On using lawyers, he noted that claimants could still engage a lawyer to “help them with a case before the small claims court”, and as to paying for that legal input they “can try to reach an agreement about how their case is funded”. In other words, there would be no ban on taking legal advice, but as costs cannot be recovered “clearly people would need to look at the economics of that”.
As to use of the fast track, he noted that if a claimant had a complex case that required dealing with “by the county court in its full setting” which was no doubt a reference to the fast track or even when required the multi-track, that would be possible, and an application could be made for that purpose.
Sir Oliver mentioned this too as part of a future solution involving looking to achieve a “most modern” legal system. He said government was looking to achieve swifter justice in a way that involved less stressful experiences for litigants.
This pointed to the need to “get cases out of court that do not need to be there”, by use of online procedures and more ADR. “The full force of judge and courtroom” would be used only in cases which required it.
The SNP spokesman in the debate was Stuart C McDonald MP who admitted that while able to deal with other parts of Access to Justice debate, he should have predicted that part of it would have concerned the current consultation and looked into the issue in more detail.
Sir Oliver responded by referring to the significantly smaller number of injury claims seen in that jurisdiction and that in Scotland “the problem of the industrialisation of such claims” had never been seen as in England and Wales. He suggested that those from Scotland would find it hard to understand “this claims culture” seen in England and Wales which Scotland did not have.
Chris Philp MP on the consultation
Chris Philp as a member of the Treasury Select Committee usually speaks on this type of issue as he did yesterday. He continues to make reference to his own experience of cold calling post what he calls a very minor RTA in which there were no injuries.
He said he was a very strong supporter of the proposed measures in relation to soft tissue injuries, wanted to see them brought onto the statute book at the earliest opportunity, and looked forward to supporting them in the House of Commons.
When Rob Marris pointed out to him that the reform package applied to all injury claims as far as the SCT rise was concerned, Chris Philp replied referring to the title of the consultation and its reference only to soft tissue injuries. He expressly supported the ability of cyclists or motorists to recover damages for a broken rib, wrist or leg.
While he did not expressly refer to his position on the SCT rise applying to EL and PL claims, it would seem from him making no express reference to support for that part of the reform package, alongside him saying that he was a strong supporter of whiplash reform, that the government may not be able to rely on the support of this influential Conservative MP in applying the SCT rise to EL/PL claims.
Chris Philp on other issues
He was in favour of a “blanket ban on outbound cold calls in relation to soft tissue injuries” and a ban on pre-med offers. Medical evidence should produce “independently verifiable evidence” which should be “more than just someone saying, “My neck hurts” “.
He thought there should be a positive duty on CMCs and solicitors to explain that fabricating evidence was an unlawful act, whereas in his experience they currently did the reverse.
He also had comments to make about QOCS, which he saw as providing a perverse incentive to insurers to settle claims as even if a claim was successfully defended the insurer would have to pay its own costs. Under the current regime it was therefore more economic to settle claims rather than to dispute them, he said. In his view, the MoJ should look again at QOCS as a result.
Mr Philp seems in favour of monitoring passing on of savings through reduced premiums. He would expect he said the CMA or the government itself, if it had the power, to conduct an investigation after implementation of the reforms.
He also wanted to see the practice ended of insurers’ involvement in certain ABSs where he believed an aim was what he described as “circumventing the referral fee ban”. He also gave examples of what he saw as “profiteering” within the handling of RTA claims, which he wanted government to take steps to prevent.
Craig Tracey MP
As Chairman of the APPG on insurance and financial services it is also worth looking at Mr Tracey’s speech in yesterday’s debate as another influential Conservative MP.
He was concerned whether access to justice was really being achieved where under CFAs someone other than the claimant benefited more than the injured party. The example he gave involved the lawyer or CMC taking a substantial portion of damages “so claimants sometimes get only half the amount awarded to them”.
Looking at it another way, while damages in soft tissue claims were relatively small, the associated costs of dealing with them including the charges of all third parties involved was “disproportionately large”, he said.
Mr Tracey also had comments to make on the SCT proposed increase, saying that he thought it needed to increase for whiplash. He made no reference to his position on EL/PL and so limited his statement of support. While ABI data showed that in 1991 50% of claims were under the SCT limit, now it was only 9%, he said.
Why he asked should there be a link to a cash settlement on top of an entitlement to recover special damages, alongside a focus on rehab, when “many of the minor injuries that we are talking about are similar to those sustained on sports pitches around the country, day in, day out, where no one would give a second thought to making a claim against the opponent”?
Nothing specific results from yesterday’s debate, other than it being an opportunity to understand positions being taken and the reasons for them.
We continue to await the MoJ’s response to the consultation and the next steps in the political process.
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.