An uncertain future
8 February 2008
Personal injury lawyers now have another deadline. The Ministry of Justice has at last made a statement on the proposed claims process reforms for personal injury claims, following the consultation which closed in July last year.
However, the statement from Bridget Prentice, the Parliamentary Under-Secretary of State, says only that they will aim to publish their response to consultation by the end of March 2008. The original deadline was as long ago as October and so we are looking at a minimum of six months delay, with every prospect of the Government granting itself a further extension.
So what is the problem? Bridget Prentice's statement mentions that the proposals "represent a significant reform" of the claims process and the Government needs to "give careful consideration" to the range of views expressed.
It would frankly be surprising if those views are very different from the views that they expected, with polarised positions from claimant lawyers and defendant insurers.
The bold decision to set out a new way of handling injury claims seems to have been replaced by second or even third thoughts.
It is always difficult to grasp the nettle of reform when there is no consensus as to what should be done. The reality is, however, that a low-value personal injury claim is a simple concept and there have been too many vested interests keeping the system complex. It suits claimant lawyers and claims farmers to perpetuate the mystique, to enable them to retain business and charge by the hour.
This is one reason why we still hear the tired complaint that insurers try to avoid payment, when it is well understood that their business model relies on paying genuine claims quickly.
There are rumours of backtracking and watering down of the proposals, but such rumours are inevitable when there is no sign of movement.
The recent announcement goes a little way towards dispelling the rumours but the Government is doing no more than buying time. Having come out in 2007 by saying the system is broken, it would be surprising if the conclusion was now that it doesn't need fixing.
The procedural reforms ushered in by Lord Woolf in 1999 were designed to control cost and delay, but a last minute decision to shelve fixed costs proposals has fuelled rampant cost inflation.
The growth of claims farmers and the recoverability of success fees and after the event insurance premiums has led to a situation where there is a real danger of the tail wagging the dog. When after the event (ATE) insurers oppose reform on the basis that it would affect their market, something has gone badly wrong.
There is in truth a compelling case for sweeping away the current system and replacing it with a far simpler one. Many of the reforms represent no more than best practice and business sense for both sides.
There should be no need for any argument over the right figure for a low value claim. A tariff, or an agreed and independent assessment tool, would do away with such disputes and dispel the bar room valuations that claimants sometimes seek.
Indeed, why should we argue over low value claims at all?
If a claim cannot be agreed by negotiation, then it could be submitted to some form of early neutral evaluation by an agreed panel of barristers or judges. That evaluation could either be binding on both parties or binding on the defendant alone, with the claimant at risk as to the cost of proceeding if the valuation is rejected.
We have spent much of the last eight years arguing more about costs and the rights of lawyers than about damages and the rights of claimants. It is high time the Government showed some real resolve: no-one will benefit from more dithering and uncertainty, except the lawyers.
Andrew Parker is a partner at Beachcroft