This month saw the news everyone had been waiting for – the arrival of the Civil Liability Bill, which as well as introducing the whiplash provisions outlined in last year's Queen's Speech, also included the proposals for changing the method of calculating the discount rate. At the same time the MoJ responded to the Justice Committee's report on the discount rate.
This news was almost enough to eclipse the other notable event this month as Lord Justice Jackson, architect of the Jackson reforms, retired on 7 March, but not before delivering a final lecture on civil justice reform entitled "Was it all worth it?" However, it only took two weeks for the Master of the Rolls to remind us in a lecture entitled "Civil Justice after Jackson" that "Civil justice reform is … a subject that never rests" outlining the recent and current reform efforts.
Also, in a month where there have been more reports of holidaymakers coming unstuck for bringing fake sickness claims, the new Pre-Action Protocol for gastric illness claims is nearing completion.
We look at these developments below along with our usual round up of forthcoming cases and other issues on the horizon.
Personal injury: cross border claims. The appeal in Mapfre Mutualidad Compania De Seguros Y Reaseguros SA & Anor v Keefe on whether a Spanish insured can be joined into the English proceedings already brought against the Spanish insurer, was heard on 7 March 2017. Judgment is awaited.
Update - Occupational disease: actionable injury. The Supreme Court handed down judgment in Dryden & Ors v Johnson Matthey PLC on 21 March, unanimously allowing the appeal. The appellants' sensitisation is an actionable personal injury because it carries the risk of an allergic reaction in the event of further exposure to platinum salts and they must change their ordinary working lives to avoid such exposure. Read more from 12 KBW who acted on behalf of the successful appellants.
Update - Portal claims: direct offers. In Gavin Edmondson Solicitors Limited v Haven Insurance Company Limited an insurer settled six portal personal injury claims on an all-inclusive basis directly with the clients of Gavin Edmondson Solicitors who had CFAs with its clients. The solicitors were therefore deprived of their costs and the Court of Appeal allowed Edmondson's claim for equitable interference against the insurer to recover its costs. Read more about the hearing which took place on 5 & 6 February in the Gazette. Judgment was due to be handed down on 21 March but it did not take place with John Hyde of the Gazette reporting on Twitter that it was postponed after late submissions the day before. We do not yet know when it will be handed down.
Police: duty of care to employees. The question in James-Bowen v Commissioner of Police for the Metropolis is whether a person who is sued in civil litigation for alleged misconduct by his employees (or others for whom he is vicariously liable) owes those employees a duty of care in the conduct of his defence. The hearing is listed for 6/7 March 2018
Supreme Court cases awaiting developments. We await further official details for the following cases where permission to appeal has been granted:
Banca Nazionale del Lavoro SPA v Playboy Club London Ltd & Ors concerns a financial reference given by a bank to an agent acting for a club which ran a casino and whether a duty of care was owed to the club. Update 29 March: the Supreme Court has today published the Easter Term listings and the appeal will take place on 24 April.
In Darnley v Croydon Health Services NHS Trust the issue in the Court of Appeal was whether an A&E receptionist owed any tortious duty to provide accurate information to the claimant about waiting times.
Perry v Raleys Solicitors is a professional negligence claim concerning the alleged under-settlement of a vibration white finger claim. Read more in this Crown Office Chambers update.
In R&S Pilling T/A Phoenix Engineering v UK Insurance Limited the issue in the Court of Appeal was whether motor insurance extended to liability for damage to the property of third parties as a result of fire caused by repair work being carrying out to a stationary car, i.e. whether the repairs amounted to "use" of the vehicle. We understand that the hearing is due to take place on 13 December 2018.
Permission to appeal has been granted in Cameron v Hussain & LV= in which the Court of Appeal held that a claimant was able to bring her claim for damages arising out of a road traffic against an unidentified driver.
Court of Appeal
Update - Policy interpretation: aggregation clause. At first instance in Spire Healthcare Ltd v Royal & Sun Alliance Plc an insurance policy was held to contain an aggregation clause so that the maximum cover for claims encompassed by it, was the limit for any single claim. The appeal took place on 8 February 2018 and judgment was handed down on 2 March.
Update - Professional negligence: Project Monitor Surveyors. In Lloyds Bank PLC v McBains Cooper Consulting Limited the judge at first instance found the Project Monitor liable to the Bank for losses caused by giving 'advice' rather than merely providing 'information' when submitting its monthly progress reports in connection with the Bank's provision of a development loan facility to its borrower. The appeal was heard on 27/28 February 2018. Judgment was handed down on 15 March.
Professional negligence: solicitors. Dreamvar (UK) Limited v Mishcon De Reya (a firm) and Anr concerns a fraudulent property transaction in which a fraudster impersonating a property owner purported to sell the property to the claimant. In seeking to recover the loss it had suffered as a result of the fraud, the claimant brought claims for negligence and breach of trust against its own solicitors and solicitors acting for the fraudster. The appeal is taking place on 27 & 28 February.
Update - Professional negligence: court door settlement. At first instance in Dunhill v W Brook and Co & Anor a claim for professional negligence arising out of the settlement of a personal injury claim at the door of the court was dismissed against both the firm of solicitors and counsel who acted on behalf of the claimant. The claimant's appeal is took place on 27 February 2018 and in a judgment handed down on 15 March, the Court of Appeal dismissed the appeal. Read more in our update this month.
Update - Procedure: non-party costs orders. The issue on appeal in XYZ v Travelers concerns the application for an order under s.51 Senior Courts Act 1981 for a non-party costs order against the insurers in a product liability claim. The appeal is now due to take place on 9/10 May 2018.
Vicarious liability: connection with employment. At first instance in Bellman v Northampton Recruitment Ltd it was held that an employer was not vicariously liable for an assault committed by its director after a work Christmas party. 12 KBW outline the grounds on which permission to appeal has been granted and you can read more on the first instance decision in our update from last year. The appeal has now been listed for 12/13 June 2018.
Update - Costs budgeting: detailed assessment. We had been awaiting news of the appeal in the case of RNB v London Borough of Newham where it had been held that a reduction in the hourly rate in relation to incurred costs was seen as a "good reason" to depart from an approved budget on detailed assessment. This month Litigation Futures reported that the appeal has been dropped but also highlighted a new judgment on the issue in Nash v Ministry of Defence.
Update - Discount rate consultation. Following an announcement to the London Stock Exchange on the morning of 7 September the MoJ published its response to the discount rate consultation along with draft legislation proposing that: the rate should be set by reference to "low risk" rather than "very low risk" investments as at present; it should be reviewed at least every three years; and the Lord Chancellor should consult with an independent panel of experts. The Lord Chancellor then invited the Justice Select Committee to undertake a pre-legislative scrutiny inquiry into the draft legislation and at the end of November the Committee published its report making recommendations that included obtaining further evidence about claimant investment behaviour and that the independent expert panel should participate in the first review. This month, a month and a half later than expected, the MoJ responded to the report at the same time as announcing the Civil Liability Bill. The MoJ proposes to press on with the proposals in the Bill – it does not accept that the evidence is insufficient to justify proceeding but it will work to develop the existing evidence base ahead of the first review. The MoJ has also agreed to involve the independent panel for the first review. Read more about the details of the response and its implications in Simon Denyer's update.
The following consultations are currently open:
New - Legal services: insurance and compensation. The SRA has launched a consultation on changes to the legal insurance and compensation rules with proposals including limits to the compensation fund and reducing minimum PII cover. The SRA says these changes will give firms more flexibility to choose the right level of insurance to suit their business and clients, while making sure there are still appropriate protections for users of legal services. The proposals include:
• reducing the maximum single claim limit to £500,000 (£1 million for conveyancing)
• keeping the need for a six year run off period of insurance after a firm closes but capping the overall level of cover at £3m for firms that have done conveyancing work and £1.5m for other firms
• removing the need for compulsory insurance to include cover for large commercial clients
The consultation will run until 15 June 2018.
The following consultations are awaiting official responses:
If any client wishes to request any of the DWF consultation responses referred to below they can do so by emailing email@example.com
Small claims track limit increase. On 5 December the Justice Committee launched a new inquiry into the government's proposals for raising the small claims track limit for personal injury via secondary legislation. The Committee planned to take account of the written and oral evidence submitted to the unfinished 2017 inquiry into personal injury: whiplash and the small claims limit, but invited further written submissions. DWF made submissions on both occasions. On 16 January the Committee held an oral evidence session at which DWF's Nigel Teasdale gave evidence on behalf of FOIL. Read more about the session in Simon Denyer's update , and more on the issue generally in the Commons briefing notes: Small claims for personal injuries including whiplash and Motor car insurance. Last month it emerged following an MoJ meeting with MASS, APIL and the Law Society that the RTA reforms are now expected to be implemented from 2019 with the reforms in non RTA claims coming later. As the increase in the small claims track limit can be implemented via secondary legislation, it did not feature in the newly published Civil Liability Bill.
Update - Reforming the soft tissue injury (whiplash) claims process - Part 2. In February 2017 the government published the first part of its response to the Reforming the soft tissue injury (whiplash) claims process consultation, to which DWF responded. It then incorporated its proposed reforms to the whiplash claims process within the Prisons and Courts Bill which we reviewed in our update last year. That Bill's progress ended with the dissolution of parliament but the whiplash provisions are due to be reintroduced within the Civil Liability Bill announced in the 2017 Queen's Speech. In the meantime a second part to the consultation response is still awaited and is due to look at the outstanding proposals considered including, the Insurance Fraud Taskforce recommendations, credit hire and rehabilitation. This month (7 March), Justice Minister Rory repeated the familiar response to the question of when a response would be published…"in due course".
Update - Review of Fixed Recoverable Costs. Jackson LJ published his Review of Fixed Recoverable Costs, to which DWF contributed, on 31 July. His proposals are to extend fixed costs in claims worth up to £100,000 along with the remaining fast track cases not yet subject to FRCs. The report is being considered by the senior judiciary and the MoJ, and a consultation will hopefully be launchedbefore too long. After the government's response to the clinical negligence fixed costs consultation confirmed last month that "the Lord Chancellor will announce the next steps in due course," this month Lord Keen has responded to a question, saying "the government is considering the report and will set out the way forward in due course".
Update - Review of low value personal injury claims including package holiday claims. In October the MoJ published a call for evidence following their announcement in July of measures to tackle the apparent increase in package holiday sickness claims. The MoJ had already asked the Civil Procedure Rules Committee to consider how these claims can be incorporated within the EL/PL portal protocol so that they fall within the existing fixed recoverable costs and they were looking to extend FRC to these claims by April 2018. The MoJ has also asked the Civil Justice Council to consider the rules on how low value claims are handled more generally to try and address the incentives behind the bringing of unmeritorious claims. On the issue of holiday sickness claims, the call for evidence invited views on proposed amendments to the EL/PL portal protocol and data on volumes of such claims. On the wider issue of low value personal injury claims generally, including whiplash, NIHL and gastric illness claims, the MoJ invited views on any relevant issues that should form part of this project, suggesting for example, the nature and timing of evidence. The consultation closed on 10 November and a formal response is awaited. DWF responded to this consultation and also the follow up call for evidence from the Civil Procedure Rules Committee on the proposed process for handling these claims. This month the minutes from February's CPRC meeting were published, showing that the rule changes and draft Pre-Action Protocol were almost complete but still required some further work. The March meeting minutes have not yet been published for us to see whether the reforms can be implemented in April or soon after. Read more in Miles Hepworth's article this month.
Credit hire: model directions. Last June, the Civil Procedure Rules Committee issued a consultation on the "model order for directions to be used in credit hire cases". Acknowledging that the whole area of credit hire "remains a highly contentious area of litigation" the CPRC identified what they see as relatively simple steps that can be taken to narrow the issues and present the judge with the necessary evidence to make a determination. The proposed directions concern witness evidence and disclosure on impecuniosity and the agreement of hire rates. Stakeholders were urged to confer to try to achieve a consensus or risk a solution being imposed. The consultation closed on 1 August 2017 and DWF responded.
Motor insurance: implications of ECJ Vnuk ruling for UK legislation. In December 2016 the Department for Transport published its consultation Motor Insurance: consideration of the 'Vnuk judgment' to look at “options for amending domestic motor insurance law in light of the European Court of Justice ruling…” The government is considering two options: one broadening the scope of insurance requirements to reflect the decision in Vnuk; the other would involve amending the Motor Insurance Directive. The consultation, to which DWF responded, closed in April and the government's response is awaited, although we know that the preferred option is to amend the Directive. In the meantime the European Commission requested feedback on the issue, and responses were published on the consultation homepage. That exercise formed part of a wider evaluation of the Motor Insurance Directive known as a REFIT evaluation on which the Commission recently held a wider consultation which closed in October. Also in October the Department for Transport responded to a written question confirming that its "priority for the REFIT review is the correction of the scope of the Directive." Whilst we await further developments, both on these consultations and on the next steps following the recent Roadpeace judgment which declared domestic law incompatible with Vnuk, the CJEU delivered a judgment at the end of November (Rodrigues de Andrade) in which it held that where an accident involving a tractor occurred while the tractor was being used as a machine for carrying out work (rather than as a means of transport) it was not subject to the compulsory insurance requirements.
Civil procedure: disclosure. A Judiciary press release published on 2 November 2017 details proposals for a mandatory disclosure pilot scheme to run for two years in the Business and Property Courts. A Disclosure Working Group was set up in May 2016 to look into widespread concerns about the excessive cost, scale and complexity of disclosure with a view to achieving a wholesale cultural change in the disclosure process. "The unanimous view of the Working Group is that a wholesale cultural change is required and that this can only be achieved by the widespread promulgation of a completely new rule and guidelines on disclosure which will apply for the majority of cases proceeding in the Business and Property Courts." The working group was seeking feedback until 28 February 2018 and the proposed scheme is expected to be submitted to the Civil Procedure Rules Committee for review and approval in March/April 2018. Read more about the pilot in Litigation Futures.
Default County Court Judgments – At the end of December the MoJ launched a consultation looking at the processes for money claims issued in the County Court. They have particular interest in views on limiting the circumstances in which an individual can have judgment entered in default against them without their knowledge. DWF submitted a response to highlight the issue of judgment being entered against policyholders in insurance claims when it is an insurer who will ultimate pay the claim – the MoJ had not identified this scenario in its consultation. The consultation closed on 21 February.
The long awaited Civil Liability Bill was published last week. We report on that and developments on the other legislation we are following. There is still no sign though of the Courts Bill.
Update - Whiplash reform: Civil Liability Bill. The MoJ heralded the Civil Liability Bill in a press release last Tuesday (20 March) and published the Bill the next day. As expected, the Bill contains the provisions outlined in last year's Queen's Speech to "ban offers to settle claims without the support of medical evidence and introduce a new fixed tariff of compensation for whiplash injuries with a duration of up to 2 years." And in a not entirely surprising development, Part 2 of the Bill contains provisions on the discount rate. Stakeholders were looking closely at the whiplash provisions to see whether the definition of "whiplash" had been developed since the Prisons and Courts Bill. Whilst the detailed definition will be the subject of subsequent regulations, there has been a change to the high level definition from "an injury, or set of injuries, of the neck or upper torso" to "an injury, or set of injuries, of soft tissue in the neck, back or shoulder". On the discount rate, there have been amendments to the draft clause consulted on last year to reflect the MoJ's response to the Justice Committee report. The Bill has its second reading on 24 April 2018. You can follow its progress and find all related documentation on the Bill's webpage. The MoJ has also published a number of supporting policy documents and you can read more about the detail of the Bill and projected timelines in Simon Denyer's update Civil Liability Bill arrives in a form capable of achieving reform to key issues of whiplash and discount rate
Update - Online court: Courts Bill. This Bill will "reform the courts system in England and Wales to ensure it is more efficient and accessible, and in doing so utilise more modern technology". Presumably, although it has not yet been confirmed, this Bill will pick up from Part 2 of the Prisons and Courts Bill which included provision for the legal foundations for the introduction of new online procedures and online dispute resolution (ODR), and for the creation of a new online court that could deal with low value money claims below £25,000, as recommended by Lord Justice Briggs’ Civil Courts Structure Review. This month, in a debate about imminent court closures, the Lord Chancellor David Gauke said, "I hope to be able to bring forward further news on the courts Bill in the near future". You can also read more below about developments on the online court pilot.
Update - Driverless technology: Automated and Electric Vehicles Bill. This Bill was introduced to the House of Commons on 18 October. Part 1 of the Bill deals with the insurance of automated vehicles and Part 2 makes provision in relation to charging of electric vehicles. By the end of February it had finished its passage through the Commons and had already had its second reading in the House of Lords. It is due to be considered in Committee on a date to be announced. You can follow the progress of the Bill here and a Lords Briefing note has been published on it. Caroline Coates reviewed the Bill when it came out in this article. In the meantime, on 6 March, Roads Minister Jesse Norman announced the start of a 3-year review by the Law Commission of England and Wales and the Scottish Law Commission to examine any legal obstacles to the widespread introduction of self-driving vehicles and highlight the need for regulatory reforms.
Update - Claims management regulation: Financial Guidance and Claims Bill. The provisions in the Bill relating to claims management regulation are those which came out of the 2016 Carol Brady review and the consultation on capping fees. The most straightforward provision has been the transfer of regulation to the FCA. More controversial have been the calls for a cap on the fees CMCs can charge in personal injury claims and for a complete ban on cold calling. After some confusion over what the government was promising in relation to a cold calling ban, the Committee stage last month resulted in a clause prohibiting calls for direct marketing of claims management services except where the recipient of the call has given consent i.e. not a blanket ban. The extension of regulation to CMCs in Scotland was also added in Committee. DWF had contributed to the debate by submitting written evidence before the Committee stage. This month, the Bill was due to be considered at the Report stage on 12 March. In advance, the government had written a letter (pdf) outlining how consent would work in relation to the clause on claims management cold calling and why the proposed clause is more appropriate than implementing a ban through the FCA (Read more in Legal Futures). This was followed by pressure from the claimant lobby to implement a total ban on cold calling in personal injury claims. The Report stage did not in fact go ahead on 12 March and was relisted for 27 March but again was postponed due to emergency business taking priority. You can continue to follow progress of the Bill here and in the meantime, a new Commons Briefing Paper outlines the provisions of the Bill and the debates on it to date.
Data Protection Bill. Having been introduced in the House of Lords on 13 September the Bill has now completed its passage through the Lords and has had its first reading in the Commons. The Bill widens the reach of GDPR which as a Regulation is already directly applicable in the UK. At 218 pages including 18 schedules the Bill is by no means straightforward and may yet be subject to further change as it proceeds through parliament. The Bill moved from the Lords to the Commons with a new clause at paragraph 15 of Schedule 1 permitting the processing of special category data that is necessary for an insurance purpose. The Bill had its Second Reading in the Commons on 5 March in advance of which a new Commons Briefing Paper was published On 6 March the Public Bill Committee invited written submissions on the Bill to be considered during the Committee Debates which were due to conclude by 27 March. You can continue to follow the Bill's progress here
The following Law Commission draft Bills are also awaiting further developments:
Update - Deprivation of liberty: Mental Capacity (Amendment) Bill. In 2014 the Law Commission began a review of the Deprivation of Liberty Safeguards (DoLS) under the Mental Capacity Act. The DoLS aim to protect people who lack mental capacity, but who need to be deprived of liberty so they can be given care and treatment in a hospital or care home. In March 2017 the Law Commission published its final report along with a draft Bill. It recommended that the DoLS be repealed with pressing urgency and sets out a replacement scheme called the Liberty Protection Safeguards. In addition the draft Bill makes wider reforms to the Mental Capacity Act which ensure greater safeguards for persons before they are deprived of their liberty. Last month the Joint Select Committee on Human Rights launched an inquiry into the proposed reform of the DoLS and whether it is striking the right balance between adequate protection for human rights with the need for a scheme which is less bureaucratic and onerous. This month the government has published its final response in which it sets out its provisional views on the individual proposals. Broadly it agrees with the Liberty Protection Safeguards model but it also wishes to consider the proposals as part of its review of the Mental Health Act and in the wider health and social care context, so work will continue to be done to move towards implementation. Read more from the Law Commission and the Gazette.
Insurance contract law reform: draft Insurable Interest Bill. In April 2016 the Law Commission and the Scottish Law Commission published a draft Bill following their review of the issue of Insurable Interest, having previously made proposals for reform in 2008 and 2011. They were asked to return to the issue due to the increased numbers of requests to write policies which include cover for children, cohabitants and to insure ‘key employees’ for substantial amounts. The draft Bill is intended to reflect the proposals set out in the issues paper and the Law Commissions invited comments on the draft Bill by 20 May 2016 with a view to publishing a final draft Bill and report in autumn 2016 but there have been no further developments to date. The project webpage now notes that the project is on hold due to other priorities within the team but they aim to publish a revised draft of the bill for consultation in due course.
Also on the horizon...
Insurance Fraud Taskforce. The IFT published its final report in January 2016 and in a written ministerial statement in May 2016 the Government welcomed the report and accepted the recommendations in relation to low value personal injury claims. In the whiplash consultation in late 2016 the government took the opportunity to obtain views on the implementation of certain of the IFT's recommendations. These included a recommendation to amend the QOCS rules where a claimant discontinues less than 28 days before the start of a trial. As mentioned above, part two of the consultation response, which covers the IFT recommendations, is still awaited. In the meantime, last August the IFT published a report (completed in February) outlining the progress made during 2016 on the original recommendations. Both the IFB and the MIB published their support for the report with the latter adding further updates on the current position of projects outlined in the report. In October, following an IFT recommendation the Claims and Underwriting Exchange (CUE) was expanded to accept data relating to travel insurance claims. In December Justice Minister Dominic Raab answered a question on the steps being taken to implement the IFT's recommendations and to reduce personal injury fraud generally. Last month the SRA published a report on what it has been doing in response to the IFT report. Read more in Legal Futures.
MedCo. In October 2016 the MoJ published revised Qualifying Criteria for MROs, effective from 8 November 2016. MedCo immediately suspended 134 shell companies for failing to comply with the new Qualifying Criteria and over the course of the next 6 months or so, MedCo reported on a range of enforcement action. Last August MedCo warned against "inappropriate behaviour" during the audit process and in October MedCo published an FAQ document (pdf) to address common issues arising out of the Guidance supporting the revised Qualifying Criteria. In November MedCo published its annual report and financial statements and in December gave an update on its audit programme. More details of these developments can be found on the MedCo homepage.
Update - Claims Management Regulation. Carol Brady published a final report following her independent review of claims management regulation in March 2016. The Treasury and the MoJ had commissioned the review to examine the perception of widespread misconduct among CMCs and to make recommendations to improve the regulatory regime. It was then announced that responsibility for regulating CMCs would be transferred from the MoJ to the FCA and this is being taken forward in the Financial Guidance and Claims Bill discussed further above. At September's PI Futures conference, Claims Management Regulator Kevin Rousell indicated that it would be 2018 or 2019 before the FCA take over regulation of CMCs and also confirmed that CMCs will have to be authorised afresh by the FCA. A CMR bulletin in December provides a helpful roundup of recent developments in relation to claims management regulation. In January the Commons issued a briefing note describing the regulatory framework which applies to CMCs, no doubt in preparation for the Financial Guidance and Claims Bill's journey through the Commons which we comment on further above. This month the Gazette reports on the latest complaints data from the ICO which shows that concerns reported to the organisation about unwanted contact from CMCs is decreasing.
Update - Holiday sickness claims. Following media reports last year of an explosion in fake holiday sickness claims, the government moved swiftly to announce (July) that it had asked the Civil Procedure Rule Committee to look at the rules governing the costs of holiday claims with a view to bringing them into the fixed recoverable costs regime. The press release also indicated that ministers would soon be asking the Civil Justice Council to look at the rules around how low value personal injury claims more generally are handled to reduce the incentives to bring claims lacking merit. We have reported above on the call for evidence which also notes that the Claims Management Regulation Unit and the Solicitors Regulation Authority are already working together to deal quickly and effectively with any misconduct. Last month holiday claims featured heavily in the CMR's quarterly enforcement update – read more on this in Legal Futures. This month, as we report above, the proposed Pre-Action Protocol for handling gastric illness claims is nearing completion. In the meantime, there continue to be high profile examples of the type of behaviour the government is trying to address – Leon Roberts and Jade Muzoka received suspended jail sentences and Chelsea Devine and Jamie Melling were ordered to pay £15,000 to TUI for making fake claims. Read more about recent developments in Miles Hepworth's update.
NIHL claims: Government action. In June 2015 the ABI published its report Tackling the Compensation Culture: Noise Induced Hearing Loss, improving the claims system for everyone which highlighted concerns about the increasing numbers and cost of NIHL claims. In response to those concerns the MoJ asked the Civil Justice Council to consider the issue and make recommendations. The CJC published its long awaited report in September 2017, although Jackson LJ had spoilt the surprise by announcing and endorsing the agreed fixed recoverable costs matrix as part of his own review (see Simon Denyer's review of the proposals). The new news then was the proposals for reform of the claims handling process. You can read more about the proposals in our comprehensive update. We also took the opportunity to comment on the handling of NIHL claims in the call for evidence in relation to holiday sickness claims and low value personal injury claims.
Mesothelioma claims: LASPO funding provisions. In late 2014 following a Justice Select Committee inquiry, the Government decided not to end the LASPO exemption on recoverability of additional liabilities in mesothelioma claims. They said a further review of the likely effects of the funding reforms on mesothelioma claims would form part of the Post Implementation Review of LASPO. A Commons Briefing Note on mesothelioma claims last year speculated this would happen over 2017/2018. In January, the then Justice Minister, Dominic Raab responded to a written question about CFAs and DBAs saying, "the government is committed to carrying out a post-implementation review of Part 2 of the LASPO Act, to be completed by summer recess 2018." However, following an appearance by the Lord Chancellor before the Justice Committee this month, we now know that the review of Part 1 of LASPO is unlikely to be completed before the summer and it would therefore not be a surprise if the review of Part 2 were similarly delayed.
Update - Civil Courts Structure Review: LJ Briggs' Final Report. In July 2016, Lord Justice Briggs published his final report following his review of the structure of the civil courts. The headline recommendation was the introduction of an online court capable of handling claims with a value up to £25,000. A detailed summary can be found in the press release accompanying the report and you can read more in Simon Denyer’s analysis. In January 2017 the Lord Chief Justice and the Master of the Rolls issued a Joint Statement endorsing the report and supporting the recommendations. The Courts Bill proposed in the Queen's Speech is expected to reintroduce the provisions enabling the creation of the new online court but the Bill is still awaited. In November the Gazette looked at recent developments and concerns about the online civil court. In the meantime a pilot began in September to trial a procedure that will allow legal representatives to file claims online at the CCMC. This month Litigation Futures reports from the February CPRC meeting that the judiciary has threatened to pull out of the Online Court pilot over the lack of communication from officials, but in another article later this month, they also report on recent comments from the Master of the Rolls that the pilot will move to the 'Public Beta' phase "in the not too distant future".
SRA: thematic review of personal injury sector. In February the SRA announced that it was starting a review to better understand the personal injury market, and in August it began approaching a number of firms to participate in its survey. In October the SRA published its research and in December the SRA published its review which found that firms generally had adequate systems and processes in place, yet also found some issues which could lead to misconduct. At the same time the SRA issued a revised warning notice arising from concerns about how law firms handle personal injury claims, especially when dealing with CMCs. Last month an SRA report (pdf) on its work following the Insurance Fraud Taskforce report revealed the number of complaints it had received about referral fees and cold calling, and also the scale of law firms' dependence on the personal injury market.
Update - CMA legal services study. In January 2016 the Competition and Markets Authority launched a market study to “examine long-standing concerns about the affordability of legal services and standards of service.” An interim report was published in July and the final report followed in December 2016. The CMA found that competition in legal services for individual consumers and small businesses is not working well, and made recommendations to address the issues. In December 2017 the government responded and ruled out a review of legal regulation, although Lord Keen did agree that improvements to the framework can be made through incremental changes. We have also been reporting on the SRA's work in this area: in January 2017 the SRA confirmed that it was preparing rules on publishing price information for consultation in the summer. In September the SRA launched a consultation "Looking to the future: better information, more choice" which includes proposals for law firms to publish information on prices and services for certain types of work, such as conveyancing, wills and personal injury work. It is also considering publishing data collated by firms on the complaints they receive. Controversially the consultation also proposes to allow solicitors to provide non-reserved legal services outside of firms regulated by the SRA. The consultation closed on 20 December. In January, the SRA published research on "Price transparency in the legal services market" which was carried out off the back of the CMA market study. This month the SRA has launched a consultation on proposed changes to legal insurance and compensation rules which they say should make users of legal services "benefit from a more competitive market place and increased choice". The consultation runs until 15 June 2018. Read more in Legal Futures.
In the long grass?
Issues where there has been no activity for some time:
QOCS: Civil Justice Council report. In 2014 a new CJC working group was set up to advise on issues arising from the implementation of the Jackson reforms. Part of their remit, was to investigate and report on arguments for and against extending QOCS to other categories of case characterised by an asymmetric relationship between the parties such as actions against the police and solicitors’ professional negligence in injury claims. The report (pdf) was published on in June 2016 and concluded there is a strong case for extending the principle to police claims. For solicitors’ negligence claims, whilst there may be a case in principle for extending QOCS here, there does not appear to be a similar push for its application. In both cases, they say that any decision to extend QOCS would be a matter of policy for the Ministry of Justice.
Damages Based Agreements: Civil Justice Council (CJC). The Government's response to the CJC review of DBAs is still awaited. In September 2015 the CJC made a number of recommendations but the main issue of interest going into the review was the Government’s decision not to permit hybrid DBAs, and in particular concurrent hybrid DBAs. The Working Group was divided on whether these should be allowed but it concluded, “it was a policy decision which was ultimately one for the Government". Read more in the CJC media release. We understand from a Practical Law update following a Westminster Policy Forum in October that the government might reconsider DBAs within its forthcoming review of Part 2 of LASPO. Last month the Gazette reported on a suggestion that the way DBAs may be introduced into Scotland could demonstrate how their use in England and Wales could be increased.
Legal services regulation: removing barriers to competition. In July 2016 the MoJ announced a consultation on proposals to reduce barriers to market entry, and regulatory burdens on Alternative Business Structures in legal services. Lord Faulks’ ministerial statement also mentioned the government’s intention to consider a further consultation on regulatory independence. The current consultation closed on 3 August 2016 but to date there has been no response. In December 2017, while responding to the CMA Legal Services Market Study, the government confirmed it would not be going ahead with a consultation on regulatory independence as it believes there is scope to make more progress within the existing framework.
For further information please contact Alex Fusco, Professional Support Lawyer on 0161 603 5211.
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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.