Settling in with experts

With the publicity surrounding personal injury suits, from the tobacco cases to claims arising out of the Hillsborough football ground disaster, it is no surprise that lawyers specialising in this area have been doing their own meticulous research before choosing an expert witness.

According to a survey of PI lawyers carried out by The Lawyer and accountants Levy Gee, the most important criterion for selecting an accountant was the expert witness experience of the firm or the particular individual.

The most important factors in the choice of accountant expert witnesses are: expert witness experience, the experience of the firm, the experience of the individual, the relevant experience in a similar case, the reputation of the firm, the fee level, recommendation, and location.

The survey found that 44 per cent of respondents used one of the Big Six accountancy firms. This figure rose to 54 per cent for large firms (those with more than 10 partners).

President of the Association of Personal Injury Lawyers (Apil), Caroline Harmer, agrees with the main criteria, but considers personal recommendation from fellow practitioners to also be a major factor in selecting expert witnesses.

One finding of the survey, which Harmer highlights, is the maximum level of general damages that respondents considered should be awarded in catastrophic injuries in the UK. Among firms that gave a figure, the average maximum amount was £484,286, with the highest single figure £1m and the lowest £120,000 – 15 per cent of respondents called for unlimited awards.

Harmer cites Apil's research, which was carried out among laypeople, which found that they considered £500,000 to be the maximum level that should be awarded in such major personal injury cases.

Both surveys show that PI lawyers and laypeople agree that the current general damages awards are too low. And the Judicial Studies Board guidelines are shown to be out of synch; its average figure of between £100,000 and £120,000 for general damages is almost 25 per cent of the figure put forward by the respondents, legal and lay.

With 95 per cent of PI lawyers in the small firms surveyed taking on legally-aided clients, and given the increasing pressure on the legal aid budget, it would seem lawyers are increasingly using their experts – in this area, accountants – as a tool to reach out-of-court settlements.

This is also confirmed by the fact that 91 per cent of the lawyers surveyed reported that less than a quarter of their cases ever reach the courts. Harmer considers that this figure is probably closer to less than 10 per cent.

The squeeze on the legal aid budget also means that lawyers and litigants have been looking at alternative ways to fund this litigation. Over half (56 per cent) of those surveyed offer fees conditional on settlement, with this figure rising to 68 per cent in the case of smaller practices. And only 17 per cent of lawyers in large firms use after-the-event insurance, although almost half (47 per cent) of the smaller practices do – this is considered to be quite a low figure, as large firms would be expected to be in a better position, financially and logistically, to take out such insurance.

A more radical alternative, which was put to the PI lawyers, was Alternative Dispute Resolution (ADR). Comments on it ranged from the negative to a cautious acceptance. One partner considered that “it was neither helpful nor constructive”. Another considered that there would be no major impact unless the insurance companies changed their attitude totally.

Others commented that ADR “may not be appropriate at this stage, as greater education is needed all round”.

As for those respondents which considered that there is a role for ADR in this area of practice, one thought that it would “reduce costs, as the time charged is less and the smaller cases could be dealt with more quickly”. Another suggested it would make a positive contribution and would be useful for those cases which are below the arbitration limit, while another firm with practical experience said: “We have negotiated substantial ADR cases, and it radically reduces costs.”

More generally, there was the view that the Woolf report may have a wider impact on this area and ADR may be imposed on PI practitioners.

Harmer agrees that, although relatively few cases are being settled by ADR at the moment, PI lawyers will have to address the matter, and “have to be educated and trained so that clients have this option, and can make an informed decision”.

Copies of the published survey findings will be available from Levy Gee in May.