Insult to injury
2 February 2004
23 April 2014
8 September 2014
7 February 2014
30 June 2014
28 August 2014
Personal injury (PI) has come a long way from the dizzy aftermath of Donoghue v Stevens, the 1930s landmark case that extended the tort of breached duty of care. The combination then of the law of negligence and a sophisticated regime of statutory duties produced a framework that encouraged safety consciousness, focused on accident prevention and created a safety net of improving compensation, about which few of the wrongly injured complained. It also spawned a talented and committed group of professionals on both sides, expert in their art and largely efficient and effective.
However, the steady ascent to progress and excellence appears more recently to have gone into reverse. The sideshow of the costs phoney war has left the PI market looking more like a battlefield.
As a result of the costs row, much damage has been done to a respected and sophisticated area of legal practice, with substantial loss on all sides and no real gain. There can be few who can survey the devastation with any sense of achievement.
The extensive guerrilla campaign and satellite litigation was a distraction that served to obscure both the real issues and the better mechanisms that should have been used to resolve them.
It was a phoney war because it was fuelled by misleading information that implied costs were often disproportionate. This was based on limited evidence from a relative handful of trials and assessments, plus a couple of untypical test cases. The reality, as most experienced practitioners knew, was that the vast majority of cases were resolved cheaply and proportionately.
It was also phoney because the real reason was the diminishing capacity of institutional payers to meet their responsibilities. This was for reasons that had nothing to do with the system of claims resolution, but had to do with the fierce competitiveness in an industry that allowed premiums to fall while the cost of claims rose, coinciding with diminishing returns from investment portfolios.
Like all wars, some things may have come out of it that at first blush look superficially attractive. The regime of predictable costs, although in its infancy, may yet be a lasting tonic. But we must progress cautiously. It is by no measure safely tested and we may reopen wounds if we force the pace.
Among the biggest casualties was the perception of PI and its professionals in the eyes of external beholders, whether judiciary, public, press or politician.
The label of compensation culture is utterly unjustifiable. Most statistics expose the slogan for the mischief that it is. Yet the label has stuck and shows no signs of going away. This, coupled with the emergence of the new forces of bulk deliverers and the now dispersed ragtag army of often dubious bulk introducers exacerbated the perception of adverse change. Much of PI is perceived as the domain not of the expert producing a high-quality result using, as one recent Lord Chief Justice described it, “arcane” ways (with visions of wizardry), but rather as the picking fields for largely unimpressive operators whose motivation for costs recovery apparently exceeds all others.
Thankfully, not all PI lawyers can be so labelled and there remains a significant residual group firmly committed to the interest of the client. It is essential to reverse their marginalisation, although even the briefest perusal of cost judgments over the last few years brings acute awareness of the other and growing side of the divide.
The root of the fallout can be traced back to the introduction of conditional fee arrangements (CFAs) and the opportunity given to those with less ethical structures to exploit the client market for everything they could. While most who jumped on the bandwagon have had their fingers suitably torched, it is too early to dismiss them. The carpetbaggers have not gone away.
The potential for the recent Law Society decision on referral fees to fuel that appetite is substantial. The society will have its work cut out to ensure that its laudable objective is not abused.
The emergence of bulk deliverers proposes a whole range of additional concerns. While the concept is not a new one (see for example the historical and effective role of trade unions), new pressures in the increasingly competitive legal environment beg the question of whether the enshrined principle of the primacy of a client’s interest can survive. The perception that the more challenging cases on liability or quantum are sacrificed on the altar of efficient process does not rely on the purely anecdotal.
On the other hand, is this a bad thing? Perhaps our historical measure of expectation from the professional is misplaced in a tough, commercial world. Should standards be proportionate to value? If so, it is a matter of change by consensus, not stealth.
All professionals involved in PI must be acutely aware that others have a darkened view. It is not a coincidence that, at the same time as judicial pressure to extend the predictable cost regime and to further simplify CFAs (defoliage by any other name), the Department for Work and Pensions is examining the cost of work dispute resolutions on businesses, and the Better Regulation Task Force is considering whether the litigation process is the most effective way of dispute resolution.
Then there is the shadow of David Clementi, the Office of Fair Trading (OFT) and the unmeasurable but potentially huge impact of large-scale corporate intervention into the PI market.
Those of us only trying to do a good job by securing the right compensation quickly and effectively, and hopefully being paid fairly quickly too, cannot afford to be complacent. There is no point in licking our war wounds and flashing our campaign scars because, while we pick up the pieces, those who stayed at home have other ideas.
We have to survive without the carpetbaggers, which means making ourselves significantly more accessible and user-friendly to the public. We have to work together, both claimant and defendant, to achieve the proper and effective result without unnecessary confrontation and related cost. We have to show that our focus is on the solution and not the process.
At its simplest, all we need to resolve claims are a communications system, access to acceptable medical evidence and a calculator. Those simple features, overlayered with the essential legal skill (the wizardry that only the profession currently delivers effectively), are the essentials.
Beyond that we must resist the temptation of those whose objective is to sell us something we do not need to get from A to Z. Instead we must be proactive in finding new and better liability and damage solutions.
Examine the adversarial procedure. Where if anywhere does it deliver value? Look constructively at burdens of proof. Commit to injury rehabilitation programmes.
Encourage periodic payments as an alternative to lump sum damages. It is a long list, but our imagination is the only limitation.
Over the last few years we have moved from litigation to dispute resolution. We must now move further, taking the dispute out of resolution. We need to focus on simpler mechanisms. An example would be mandatory resolution meetings at the conclusion of the protocol period – the court process used only to catch those residual cases that we really cannot resolve. This is not putting the clock back, it is moving forward, putting resolution – and the client – first.
And to preserve the best for the clients, to compete against the new challenges and, in short, for PI law firms to survive, our businesses must seriously restructure. Whether the partnership model can survive the response to mass corporatism is doubtful. We need structure, with lawyers and managers at the top tracking business, analysing and defining legal issues and the parameters of compensation and expectation, and thereafter devolving to paralegals. And the paralegals must have the skills to communicate effectively rather than simply to process. No great wizardry there, but courage and conviction is needed.
With determination and the careful nurturing of our ethics, our skill, our motivation and our track record, we will succeed against those who seek only to trample and pick over what they can. If we do not grasp this challenge, then compensation for the injured will become the realm of mass corporate activity and damages a fossilised tariff regime. Those for whom we exist will be the losers.
Fraser Whitehead is a partner at Russell Jones & Walker