Legal blog: Seasonal goodwill is in short supply

Apparently, it is the season of goodwill.

However, you could be forgiven for questioning this having heard that the Association of Personal Injury Lawyers (APIL) is considering a judicial review of the Ministry of Justice’s (MoJ) proposed extensions to the portal and fixed costs, now that these have been released. 

What will be achieved should the association succeed in forcing the MoJ to consult again,?

It will please the Law Society, which has requested that the implementation of the Jackson reforms be delayed “for at least six months” on the ground that implementation in April 2013 “may cause meltdown in the civil justice system”. In the meantime, the current (unacceptable) system will continue notwithstanding that Lord Justice Jackson’s report was published as long ago as January 2010.

Were the MoJ to accede to the Law Society’s proposals or if it is forced to consult again as a result of APIL’s actions, what will happen to general damages following the two decisions in Simmons v Castle? Will the Court of Appeal be asked to postpone the increase in general damages until such time as the Jackson reforms have been implemented?

The Forum of Insurance Lawyers’ (FOIL) position has always been clear and unequivocal. In order to succeed, the Jackson reforms have to be implemented as a package with no cherry-picking. I accept that much remains to be done and the devil is in the detail. I also accept that new business models will need to be reviewed for those who acting for claimants. However, it seems to me that the most likely recipe for chaos is to delay implementation beyond April Fools’ Day (which is also Easter Monday).

The MoJ’s proposed fixed fees, inside and outside the portal, have now been released for consultation. Most people I have spoken to regard this as a move in the right direction. To me, this is the key issue that will help to achieve the aims of Lord Justice Jackson. I have always regarded the banning of referral fees as a sideshow. The truth is that claims have a value, as a result of which they have been traded. Referral fees were merely a means of payment. There are plenty of other ways in which this could be achieved, including joint ventures, alternative business structures and other well-documented schemes. A reduction in the costs awarded is the only way of effectively reducing the value of the claim, which, in turn, will considerably reduce, if not stop, some of the behaviours that we all wish to see eradicated. Although many points will be well made with regard to the proposals, I would welcome someone explaining to me the difference in dealing with an employer’s liability, public liability or road traffic accident claim once liability has been admitted …

Are you costs budgeting?

One of the reforms that seems to have received little attention to date is the proposal for costs budgeting on multi-track claims. This is something that the insurance industry needs to consider and prepare for carefully. Many insurers instruct separate firms or organisations to deal with costs and claims. If costs budgeting takes off,  a considerable amount of work will have to be done at the beginning of the claim to ensure that the case progresses cost-effectively. Although it remains to be seen how the judiciary will handle this, and how much time will be allowed to debate costs (which might take days if dealt with at a detailed assessment), we all need to be prepared to challenge the claimant’s solicitor’s costs budget where appropriate. Complaining will not be enough, empirical evidence will be required. This is an area where the industry needs to work together with a common aim to ensure that costs in multi-track claims are proportionate, which many would argue has not been the case to date.

Rod Evans, president, Forum of Insurance Lawyers