If my memory serves me, the whole purpose of the Ministry of Justice (MOJ) reviewing the personal injury process was because the general opinion from both insurers and lawyers alike was that the current process was cumbersome, complex and too costly.
Having read and re-read the response, however, I can only conclude that the government avoided any difficult decisions and instead decided that only the most straightforward of cases would be appropriate for a new streamlined system. Let’s be honest, raising the fast-track limit from £15,000 to £25,000 is hardly revolutionary. Furthermore, having fixed costs for road traffic cases up to £10,000 is something that already exists. So where is the reform in that?
To suggest that cases must come out of the new regime when issues such as contributory negligence or causation arise is somewhat bemusing. There is no suggestion that lawyers are being excluded from this process, and surely these are exactly the types of issues that they are trained to deal with. Moreover, any personal injury lawyer worth his or her salt will be very well versed in both areas of the law. As such, it’s hard to believe that a more appropriate system could not have been introduced, e.g. either provide a simple fix fee (and deal with the swings as well as the roundabouts) or alternatively introduce a slightly altered scale of fees (where there are issues relating to causation and liability).
To completely exclude accidents at work, and public liability cases, is equally puzzling. Effectively, what is proposed is a two-tier system, where two people with identical injuries would have to go through completely different processes to receive their compensation. To say that this totally ignores the interest of the consumer is in my opinion an understatement.
As with a lot of these things I expect that the devil will be in the detail. What we are yet to see are any kind of proposals with regards to the appropriate level of fixed fees, and indeed what, if any, sanctions will be applied for failure to comply with the new rules and regulations. Unless these rules are drafted very carefully and, dare I say it, very differently to previous sets of rules, we could almost be guaranteed to see cases of satellite litigation. For example, I can see lawyers having a field day defining what an “unreasonable offer” is or was, or indeed, what is meant by “unnecessarily caused a case to go to a hearing”.
The proposals surrounding after the event policies and the recoverability of the premiums relating to those policies will be equally intriguing. Let’s be frank; unless there are some significant differences in relation to the level of the fixed fees or as to recoverability then, quite honestly, it will simply be business as usual save for a handful of cases that can be dealt with under the new regime.
It is clear from reactions in the press that we have seen on behalf of insurers that they too are less than impressed by the response. This isn’t surprising given the amount of hard work both the ABI and insurers themselves put in, in relation to providing information and assistance to the MOJ. You have to wonder whether any of this was considered? Think, for example, about the position of motor insurers bureau (MIB) who are soon to be under a duty to respond to a new claim within 15 days, and possibly admit liability and causation when they know absolutely nothing about the case. It could well be that this is simply an oversight, and that the rules will reflect the reality, however I’m sure at this moment in time the MIB are wondering whether all the work that was put in was in fact a waste of time.
Let’s not forget that hot on the heels of process review was a consultation surrounding damages. Will insurers be disappointed again, or will government be brave, and heed the advice from the insurance industry on issues such as the cost and provision of future care?
Anthony Hughes is Vice President of Forum of Insurance Lawyers (FOIL) and partner at DWF.