Claims: Q&A with Andrew Parker, Beachcroft

Q. The government is likely to implement most of the Jackson reforms. What’s next for the pro-Jackson lobby?

A. There are still a lot of details to be worked through. Only a small amount of the recommendations are going through to primary legislation – changes about the removal of the recovery of success fees and after-the-event insurance, along with changes to Part 36. They will require primary legislation because they are new concepts.

The rest of the paper focuses on rules and regulations and there is a real need to see they are dealt with. For example, in the consultation paper there are a few interesting ideas on fixed fees that need to be looked at as well. There is the idea that the small claims limit for non PI cases needs to change. I don’t think many people were expecting that. It is expected that the road traffic accident process will extend into other areas and for claims up to £25,000, but there is also a suggestion this will increase to £50,000. The stuff around the edges needs to be looked at carefully.

Q. Will the insurance sector ever see an outright ban on referral fees?

A. Ken Clarke has been quite scathing about the referral fee culture. But I’m not sure we’ll see the ban in the next few years and, if it happens, whether it will have the expected effect. Referral fees are the result of a cause and effect relationship. They are available not just because they are permitted but because there is sufficient margin in the costs lawyers recover to enable them to pay substantial fees.

The real problem is the level of costs paid. So as long as they remain at that level, you will get referral fees or another mechanism for achieving the same objective. The target should not be referral fees, but the system that permits them. Jackson does say ban referral fees, but it’s not as simple as that – as long as the solicitor gets paid more than they need, referral fees will exist.

Q. What impact will the Legal Services Act have on the sector?

A. It offers those who handle claims a different way of doing things. When we talk about referral fees we can’t ignore that the Legal Services Act will provide a way of supporting referral fees. The way referral fees work after the act is in place will be different, but it will be based on the fact there will still be enough costs to share around. There will be business opportunities for the sector to work more closely with lawyers.

Q. How will claims management firms and claimant lawyers react to the changes in the claims arena?

A. Claimant firms are singing cries of doom – it will be an interesting test of their resilience. Those who are efficient and adaptable will survive and thrive; those who are not will have problems. You can’t adapt until you see the detail of the reform. Defendant firms have learnt that fixed fees and a degree of control over costs is how to do things efficiently. That is not what I see from claimant firms.

Q. What about legal expenses insurers?

A. This is going to herald a significant change for those businesses. Some have been in the legal expenses market for a long time and understand the need to adapt to change. For example, there is a strong argument in the Jackson proposals that boosts the case for before the event insurance.

Q. What is your career highlight?

A. Drafting section 2 of the Compensation Act (2006), which outlines that an apology or offer of redress should not to be seen as admission of liability. Yesterday’s announcement comes close.

Q. What’s been the biggest change in insurance law in the past decade?

A. Fixed fees. We’ve got used to them for low-value claims, and that’s driven the way we do business. When they emerged in 1999, we handled small fast-track cases in London; we now do those in lower cost centres. The message from this development is that claimant lawyers have nothing to fear from change. It is possible to do business and thrive in a new environment.