Legal blog: Time is ripe for reform

Memory – now there’s a funny thing. You can’t see it, can’t feel it, and can’t necessarily control it, yet it can help you, or play tricks on you and even save you from some embarrassing moments. My memory is pretty good – the odd ‘senior moment’ now and then but overall it still serves me pretty well.

So when I started reading the TUC’s recent parliamentary brief on the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Bill I thought to myself: I’ve read this somewhere before, haven’t I?

The TUC has issued its ‘call to arms’ urging Peers to intervene and remove employers’ liability (EL) claims from the scope of the LASPO Bill and so, in effect, remove those claims from Jackson’s proposals and any kind of reform. Their rationale is, they say, founded on access to justice, fairness and an inequality of arms between employer and employee.

Stretching reality

Some of the claims in the brief stretch reality – they say that the claimant will have to pay up to 25% of their damages as a success fee; again, my memory tells me that the 25% only relates to pain suffering and loss of amenity and the TUC forgets to mention the 10% uplift on that element of the claim proposed by Jackson. Additionally, there is no mention of the fact that the damages that the claimants recover at trial can be increased substantially by effective claimant offers as a result of the pending reforms of Part 36.

It claims that 25% of EL claims will not be brought post-reform and yet fails to include any evidence to support this proposition. It also fails to mention that with qualified one-way costs shifting claimants will, in most circumstances, be protected against adverse costs liability.

So, engage memory and let’s examine the facts. In 2004, the Department of Work and Pensions undertook a year’s project engaging all compensators to devise a new streamlined process for lower-value EL claims.

At its heart were proposals around rehabilitation and delivering compensation quicker to injured people in a less adversarial system. All stakeholders were engaged in designing the process and we were only one week from launching that pilot when the TUC withdrew its support - support for a process that would clearly benefit the injured victim. Why?

Move forward to 2007. The then Department of Constitutional Affairs consulted on personal injury reform. In scope was RTA, EL, personal liability (PL) and long-tail disease. After TUC objections, that consultation process was watered down to RTA under £10,000 and the protocol and portal that we know today. Why?

TUC is fighting change

In 2012, the TUC continues to fight change and yet the case for reform is overwhelming. The TUC claims that the real problem is RTA claims and whiplash. Yet, if you look at the level of disproportionate costs in low-value EL claims where the claimant lawyer still enjoys payment on an hourly-rate basis, you find real examples of where the system is totally dysfunctional. UK plc is bearing this cost (that is us, through taxes, council tax and insurance premiums) and under the current system, remind me please who is benefiting from referral fees in these cases?

Employers’ liability claims are crying out for a new process and fixed costs. This should apply not just to lower value accident claims but also to the volume legacy classes such as deafness and vibration claims. We need to move the injured claimant back into the centre of the process and focus on delivering swift redress to allow that individual to move on from the accident. That should be our primary focus and if that is achieved and the business models of claimant (or defendant) lawyers or the TUC struggle to cope, then access to justice demands that those business models should change.

No longer sustainable

FOIL will be urging the government to maintain its current path. We are encouraged by the most recent consultation from the minister that clearly places both EL and PL firmly in scope of reform – both in terms of process and fixed cost. We support access to justice and swift redress but the current mechanism for delivering that is no longer sustainable.

EL claims need to be kept in scope and reform designed to deliver a better deal for all consumers - those who receive the redress and those who pay for it. Oh, and I’ve just remembered, the proposed package of reforms essentially reinstates the structure that existed until April 2000. I seem to remember that there was a fair amount of claims and litigation knocking about prior to that date.

Found the glasses; just where I left them. Having read the TUC brief – a stirring call to arms about the protection of claimants rights – I keep them on to re-read Lord Lofthouse’s report on the Coal Miners Compensation Scheme – remind me again, were injured victims and their rights at the centre of that process?

Don Clarke is president of Forum of Insurance Lawyers (Foil)