Kerry Underwood

Archive for September 2013

IMPACT ASSESSMENTS: 1984 AND ALL THAT

with 3 comments


I would not normally bother dealing with an impact assessment as they are a waste of time and money and no Government has ever let one deflect it from what it wants to do.

 However the one attached to the Ministry of Justice’s Consultation Paper “Reforming mesothelioma claims” plumbs new depths, or reaches new heights, of Orwellian Doublespeak so it is worth a paragraph or two.

 Under “Benefits to claimant representatives (eg lawyers)” it is stated, correctly, that lawyers will have less mesothelioma work.  One might think that a disadvantage, a lack of a benefit, but far from it.  Such lack of work will “free up claimant lawyer resource to be devoted to other profitable activities”.

 Imagine the letter to your staff who had been dealing with such work.

 “Don’t look at this as redundancy but rather a freeing up of your time to be devoted to other employment activities”.

 The author is either stupid, lying and/or thinks that the readers are stupid.  None of those options is attractive.

 Apparently cutting work, and therefore jobs, creates economic growth.  This is Paragraph 2.26 in full:

 “2.26      Claimant lawyers would experience a reduction in aggregate income.  This would not constitute a direct economic cost of the reforms, but instead would reflect their increased economic efficiency.  Fewer resources would be required to achieve the same outcomes, and the resources freed up as a result may be devoted to other productive profit-making activities, with positive implications for economic growth.  Claimant lawyers would also incur initial familiarisation costs, which are likely to be relatively minor”.

 This creates a whole new defence in contract cases:

 “The defendant, in cancelling the order, has not caused the claimant any loss, but rather has freed up the claimant to devote itself to other productive profit-making activities.

 The defendant therefore counter-claims…….”

 Rather than costing firms lost business the changes “generate net resource savings for business.  As such they have been assessed as ZERO NET COST”. (Their capitals – probably in GREEN INK! As well).

 So, remember, closing a factory generates “net resource savings”.

 And so on.

 You can imagine the publisher’s note if Mr Orwell had tried to include that in 1984.

 “Gone a bit far George.  Unrealistic.  Unbelievable. Delete.”

 The Ministry of Justice used to be the Lord Chancellor’s Department, then the Department for Constitutional Affairs, then Windscale/Sellafield.

 Whatever its official title it is rapidly becoming the Ministry of Truth.

Written by kerryunderwood

September 30, 2013 at 12:00 pm

Posted in Uncategorized

PERSONAL INJURY – A MODEST PROPOSAL

with 31 comments


Put the small claims limit in personal injury matters up to £25,000 for matters resolved in the portals but reduce it to zero for all other matters, that is cases that never enter the portal and those that exit the portal.

The recoverable portal costs are almost meaningless now and no solicitor can survive without charging the client. 25% of damages is standard and contrary to popular belief the charge is not limited to 25%.

Let us recognize that and scrap recoverable costs in the portal. This would give defendants an even greater incentive to settle early and reasonably, as otherwise they move from a no-costs regime to a recoverable costs regime.

Clients get their damages quickly and lawyers get their fees quickly. Everybody is happy except those firms who are unable to generate enough work and have to fatten up every file like a pig for market. Those firms need to be driven out.

Increase general damages by 20% to reflect the saving to defendants and to reflect the fact that clients will be paying all of the legal costs out of damages if matters settle early.

A 20% increase in general damages will mean that more money goes to the injured client and we all agree that that is a good thing don’t we?

Where the case is low-value but complicated, and this does not go in the portal, for example clinical negligence, the lawyer gets a proper fee, without the fear of an adverse costs order.

Scrap Part 36 for all work in the portals, pendulum litigation and Fixed Recoverable Costs Schemes, bringing them in line with the Small Claims Track where Part 36 has no application.

Scrap Qualified One Way Costs Shifting and make it One Way Costs Shifting.

Limit the consequences of a claimant failing to beat a defendant’s Part 36 in any personal injury matter to non-recovery of costs, that is remove the draconian penalty of having to pay the other side’s costs, and thus remove the need for After-the-Event insurance. The penalty of not recovering post Part 36 costs is sufficient to incentivize solicitors and clients to accept good offers.

No medical report without leave of the court in any claim worth less than £25,000. In 95% of low-value cases they are unnecessary. Employment Tribunals deal with the most complex issues such as disability, life expectancy and ability to work, without medical reports.

Pendulum litigation for all personal injury claims up to £50,000 where liability has been admitted and the only issue is quantum.

Pendulum litigation is successfully used in some European jurisdictions. At a quantum hearing each party must submit one figure and the Judge must choose one or the other figure; s/he cannot choose something in between. Thus each party tries to make its figure as reasonable as possible to ensure that that is the figure that the Judge goes for. We have the beginnings of that in the portal system; now is the time to go the whole hog. It works.

All personal injury claims not settled by way of a Settlement Agreement or in the Pendulum Litigation process to be dealt with in a new Personal Injury Tribunal. This will be chaired by a Judge sitting with two lay assessors, very much based on the old, successful Employment Tribunal system.

There would be a system of one way Fixed Recoverable Costs with the defendant only able to recover costs in the event of unreasonableness as in the Employment Tribunal Rules.

There will be no court fees and the lay assessors will consist of one from the claimant side and one from the insurance side, again based on Employment Tribunals where there was a trade union nominated tribunal member and an employer organization nominated member.

It is striking in the Employment Tribunal system how rarely there is a split decision. A similar system in personal injury work may help to end the deeply damaging “them and us” culture that has grown up between the claimant side and the defendant side.

Appeal, with leave, will be direct to the Court of Appeal, which would be a costs-free zone in accordance with powers under the new CPR 52.9A.

Cases must be determined on paper within 14 days of notification to the Personal Injury Tribunal that liability has been admitted. There would be a right of appeal, but the Appeal Judge would still have to choose one or other figure. (Those of you who have attended my lectures will have seen my party piece on this).

Clinical Negligence

A no fault scheme, that is where proof of injury cause by medical treatment is sufficient with no need to prove negligence.

This would not risk opening the floodgates, and given the enormous budget of the NHS, and its 1.7 million employees, extra payments to compensate those injured, whether or not it was anybody’s fault, makes no noticeable financial difference.

In any event society often ends up, through the benefit system, paying out in respect of people severely injured through medical treatment.

A new, Specialist  Clinical Negligence Tribunal, along the lines of the Personal Injury Tribunal above would deal with matters, that is essentially decide quantum.

Allow out and out contingency fee agreements in all personal injury work, and indeed in all civil work.

Scrap Damages-Based Agreements. Pointless and useless. Contingency fee agreements and Conditional fee agreements do the job. CMCs are currently allowed to enter in to DBAs, which is wholly wrong. This does away with that anomaly.

This can be achieved by amending Section 57(2) of the Solicitors Act 1974 which already allows contingency fee agreements in non-contentious business, and by the repeal of section 45 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 and the consequent scrapping of the Damages-Based Agreements Regulations 2013.

Careful drafting of a section 57(2) agreement and a bridging agreement allied to a concurrent Conditional Fee Agreement allows this to be achieved anyway.

A maximum percentage of damages to be charged to the client should be introduced, maybe 30% in personal injury work and 40% in clinical negligence work, such percentages to include everything to be charged to the client with recovery of costs from the other side to continue in the circumstances set out above.

Contrary to popular belief the current law does not impose any limit on the percentage to be charged to the client; it is merely the percentage to be charged by way of a success fee or DBA that is limited.

Scrap the indemnity principle. It is the single biggest cause of the increase in legal costs. There is no logical reason why recovery should be limited to the notional charge to the client. Conditional  fee agreements have rendered it almost meaningless anyway.

Reduce limitation period to six months. If you haven’t lodged a claim in six months then it could not have troubled you much. Make this subject to existing Limitation Act exceptions.

Extend system of Interim awards as per portals.

Ban ABSs from dealing with personal injury work – qualified lawyers only.

Ban Claims Management Companies from having any involvement of any kind in personal injury work. Referral fees in personal injury work are now banned so what justification is there for the continued involvement of CMCs in personal injury work?

Allow barristers direct access in personal injury matters.

Amend Compensation Act to provide for 2 year prison sentence for paying or receiving referral fees, in line with other Compensation Act offences.

Full details of all cases issued should be available to everyone online, with all decisions to be published electronically and on Twitter the day that they are given. This would introduce “Sunshine in Litigation” and works well in those states of the United States where it operates.

Unsolicited telephone calls or text messages soliciting claims to be punishable with a six month prison sentence.

No fee to be recoverable from the other side if a qualified lawyer has not physically met with, and advised, the client.

If this has not happened then the client should be treated as a litigant in person.

The diversity and independence of the legal profession should be encouraged and promoted and the statist big-business mentality that is wholly inappropriate in relation to the practice of law should be discouraged. To help with this, the limit on partnerships must be reintroduced, but perhaps now at 30, rather than 20, with a 25 per cent fee enhancement on Fixed Recoverable Costs for firms with five or fewer partner, and for barristers who should have direct access in all personal injury matters.

 

Third Party Capture and Settlement Agreements

No personal injury claim of any kind to be settled without the injured party taking advice from a qualified, insured lawyer.

Thus any settlement direct between a claimant and an insurance company will be non-binding unless supported by a Settlement Agreement where the claimant has been advised by a solicitor, Fellow of the Chartered Institute of Legal Executives or a barrister. No paralegals here please; this is sufficiently important to justify qualified lawyers only. Barristers should be allowed direct access for the purpose of dealing with Settlement Agreements.

This is exactly what happens in employment matters and for the same reason, that is to prevent exploitation of the weaker party in an unequal relationship – see section 203 Employment Rights Act 1996.

Settlement Agreements in employment work exceptionally well. As the signing of the agreement and payment of the damages, after the receipt of qualified legal advice, debars the claimant from going to court the custom has grown up of the defendant/respondent employer paying the claimant’s legal costs, even though there is no obligation to do so, employment tribunals generally being costs-free zones.

In employment matters the usual fee in a straightforward case is £350.00 plus VAT. For personal injury the appropriate fee may be £750.00 plus VAT, payable by the insurers.

The benefit to the client is very rapid settlement with no deduction from damages. Insurers get the matter off their books at a reasonable cost without the risk of the matter exiting the portal to Fixed Recoverable Costs. It will also cover all non-portal matters, such as clinical negligence.

Quick settlement for the claimant without deduction of damages; reasonable fee for proper lawyers. We are all in favour of that aren’t we?

These are some initial, uncontroversial proposals which I am sure will attract general agreement and I would welcome some more radical proposals from readers 🙂

Written by kerryunderwood

September 26, 2013 at 1:36 pm

Posted in Uncategorized

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