Have you suffered an accident that wasn’t your fault? Well, tough, because the case is too risky to take on.
At least that is what the Association of Costs Lawyers is claiming will happen on the back of a snapshot survey of the personal injury sector which “paints a grim picture” of life post-Jackson reforms.
The ACL is predicting less work, redundancies and firms looking to move away from this type of work.
A whopping 78 per cent of respondents predict they will suffer a dip in instructions after part two of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 comes into force next April. And an even bigger slice – 84 per cent – believe it will reduce their profitability.
More than two thirds – 70 per cent – of lawyers surveyed think the Jackson reforms will make their firms less willing to take on riskier cases, with uncertainty over who would pay for after the event insurance where success fees are no longer recoverable from the losing side.
Then there’s the 62 per cent that think the government’s swipe at the perceived “ambulance-chasing” side of the legal profession will lead to the dreaded ‘R” word – redundancies.
The ACL released its findings against the backdrop of a slugfest being fought out between the Association of British Insurers (ABI) and the claimant lobby.
Lord Justice Jackson’s civil litigation costs reform proposals were seen to be a victory for the defendant insurance market, which has pushed for a reform of litigation funding to reduce the burden on its clients, whereas claimant lawyers argue the Ministry of Justice is potentially blocking access to justice by endorsing the Jackson reforms and slashing the legal aid budget.
A Court of Appeal ruling that redresses the balance for claimants with a 10 per cent rise in damages is set to be challenged by the ABI (3 Sept 2012).
But all this lobbying and challenging can get a bit heavy-going.
Slater & Gordon’s household name and personal injury consumer brand Claims Direct is going for a different tactic. (Remember Slater & Gordon is the Australian firm which acquired Russell Jones & Walker in January). Gone are the cheap and cheerful, wince-inducing adverts with staged falls from ladders and crocked footballers.
Welcome to pastel colours, tuneful ditties and a more personable approach to personal injury law.
Claims Direct is aiming to shift the brand slightly with Jackson in mind to try and prevent claimants from being stigmatised and appeal to a broader range of clients who may previously have been reluctant to be seen as “compo” chasers.
Even the timing of the adverts has been considered. Not just your Jeremy Kyle mid morning slots aimed at quick payouts, but prime-time middle class Sunday night Downton Abbey viewers will be exposed to the softer side of personal injury firms with the underlying message “we can help get you back to work”.
Will it succeed and keep PI firms profitable? The ACL survey says 58 per cent of firms are now looking to move away from personal injury and diversify into other areas of law.
Devereux Chambers’ barrister Stephen Cottrell, a personal injury specialist, says the results of the survery accurately reflect the “general pessimism” at the junior PI bar over a diminished level of service from law firms and lower damages for clients. This means it will be harder to see talented new practitioners attracted to PI work, he says.
“The bar has always adapted and a cadre of specialist, dedicated professionals will remain fighting for justice for injured people,” Cottrell says, “but claimant lawyers in serious injury cases will face a stark choice – either take success fees from injured clients’ damages or take all of the risk of a CFA case with no reward.
“My guess is that the PI profession is likely to become polarised, with those representing seriously injured clients less likely to take a success fee from damages and those practitioners subsisting on volume work having fewer qualms about taking their uplifts from their client’s whiplash damages.”
Cottrell’s other concern from the Jackson reforms is, he says, a rise in small cases going to trial because of the absence of the deterrent of a success fee on insurers “chancing their arm” on assessments of damages and unmeritorious fraud and ‘low-velocity’ defences.
“It will be vital for the Personal Injury Barristers’ Association to ensure that the fixed fast track trial fees are payable to counsel only and cannot be divvied up between counsel and solicitors,” Cottrell suggests.
Iain Stark, chairman of the ACL, agrees, quoting one respondent who simply said lower fees means less-qualified fee-earners and therefore less compensation.
“It is easy for the public and policymakers to be indifferent to the impact of the Jackson reforms on claimant lawyers,” said Stark. “But the responses to our survey indicate a demoralised group of people who will not be able to hold open the door so that injured people can access justice.”
“It is often said that, like water, lawyers will find a way to continue, but at what cost?”