Kerry Underwood

Archive for November 2016

PI CONSULTATION: UNIFIED BLOG DEALING WITH ALL MATTERS

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I deal with this subject in detail in my forthcoming book – Personal Injury Small Claims, Portals and Fixed Costs available from Amazon here.

On 17 November 2016 the Ministry of Justice published its consultation paper – Reforming the Soft Tissue Injury (‘Whiplash’) Claims Process – a disingenuous title as it proposes a five-fold increase in the small claims limit for personal injury cases of all kinds, not just whiplash and not just road traffic.

So if a spanner falls on your head at work this consultation covers that accident, which has nothing whatsoever to do with whiplash or motor insurance premiums.

It also covers credit hire claims and the possibility of a tariff system for injuries.

The consultation is open until 5.30pm on Friday 6 January 2017, that is 50 days, including Christmas and the New Year period.

Including the impact assessment, which for once is lengthy and important, it runs to nearly 200 pages.

I have given the link above and the paper can be accessed there and responded to there.

 

PERSONAL INJURY SMALL CLAIMS LIMIT: CONSULTATION IN DETAIL

 

Small Claims Limit

The consultation paper proposes increasing the small claims limit for all personal injury cases from £1,000.00 to “at least £5,000.00.” (Paragraph 66, 82 – my bold).

The Executive Summary refers to £5,000.00 but Part 4 – Raising the Small Claims Track Limit for Personal Injury Claims – (pages 24 – 30 of the report) refers to “at least £5,000.00” (paragraph 66, 82), “whether the increase should be to £5,000.00 or higher.” (Paragraph 87, 94) and paragraph 97 reads:-

“97. The level for the small claims limit for PI claims relates only to the PSLA element of the claim and not to the total value of the claim. Consistent with this, it is intended that the increase should apply only to the PSLA element of the claim. In considering the level of the increase, and to build in an element of future proofing, the government has considered whether the limit should be raised further, for example to £7,500 or even to £10,000, given that the limit for all other claims is £10,000. However, the government has decided that an increase to £5,000 is a proportionate response to the issues identified at this stage, and the accompanying impact assessment uses this figure. We would, however, welcome views from stakeholders on whether the small claims limit should be increased beyond £5,000, and, if so, to what level.”

Question 14 of the consultation, which follows paragraph 97 reads:-

“Question 14: The small claims track limit for personal injury claims has not been raised for 25 years. The limit will therefore be raised to include claims with a pain, suffering and loss of amenity element worth up to £5,000. We would, however, welcome views from stakeholders on whether, why and to what level the small claims limit for personal injury claims should be increased to beyond £5,000?”

The Government says that it is “not minded” to limit the small claims rise to RTA claims only (paragraph 93), although question 13 states:-

“Question 13: Should the small claims track limit be raised for all personal injury or limited to road traffic accident cases only?”

The Ministry of Justice state, correctly, that neither the issue of raising the personal injury small claims limit, nor the types of personal injury claim that such increase will apply to, require primary legislation, that is they can be dealt with by way of a statutory instrument amending the Civil Procedure Rules.

Paragraph 86 reads:-

“Increasing the small claims limit for PI claims does not require primary legislation and can be achieved through changes to the Civil Procedure Rules. Supporting changes will also be required to allow for the recoverability of the fixed cost of a MedCo accredited medical report by the claimant and to ensure that all claims are supported by such a medical report.”

This will involve a major change in the culture of the Small Claims Court where generally expert evidence is not allowed.

Overall the consultation paper is very confused and confusing as to whether litigants in an increased small claims limit will require assistance.
The general tone of the paper is that they do not and yet paragraph 103 reads:-

“The government is considering the issue of the potential for claims management companies (CMC) and paid McKenzie Friends21 to re-enter the PI market in response to these reforms in general, and the increase in the small claims limit in particular. These types of organisation can offer services to claimants whilst operating with lower overheads than many PI lawyers. During the last consultation on this issue, a CMC trade association wrote to the government to argue that this would happen if the small claims limit were increased. We are interested in respondents’ views in relation to whether or not this would be helpful in providing support to otherwise unrepresented litigants.”

Questions 15 and 16, grouped together in the consultation paper, read:-

“Question 15: Please provide your views on any suggested improvements that could be made to provide further help to litigants in person using the Small Claims Track.

Question 16: Do you think any specific measures should be put in place in relation to claims management companies and paid McKenzie Friends operating in the PI sector?

Please explain your reasons why.”

Thus the Government is specifically considering replacing lawyers in personal injury small claims with paid McKenzie Friends and with claims management companies.

How on earth that will reduce, rather than significantly increase, fraudulent claims is beyond me and the issue is not even raised in the consultation paper.

 

SMALL CLAIMS LIMIT INCREASE: KEY DATES FOR PORTALLING & ISSUING

 

As any increase in the small claims limit will be dealt with by amendment to the Civil Procedure Rules, this change could be in as soon as April 2017.

On all previous occasions the key date has been when proceedings are issued.

Thus two passengers are injured in the same accident and both have claims worth £4,000.00. One claim is issued in March 2017 and thus is cost bearing and the other is issued in April 2017 and is not cost bearing.

The non-personal injury small claims limit was increased from £5,000.00 to £10,000.00 in April 2013 and that was how it was implemented.

Likewise under section 57 of the Criminal Justice and Courts Act 2015 the relevant date is when proceedings were issued and not the date of the cause of action. Any claim issued on or after 13 April 2015, whenever the accident occurred, is caught by the fundamental dishonesty provisions.

“Proceedings” under that Act means issued at court and so being in the portal process does not count.

It is likely to be the same with a small claims so that court proceedings must be issued by the end of March 2017 to avoid a sub £5,000.00 claim being allocated to the small claims track.

There is no precedent as the small claims limit for personal injury matters has not risen since 1991, before the portals existed.

It is strongly arguable that reaching Portal Stage 3 means proceedings have been issued, as indeed they have with a court fee paid.

Unfortunately the conduct of the Ministry of Justice is currently not always logical or consistent with the rule of law, and so it cannot be assumed that the rule change will provide that anything in Stage 3 is issued for the purposes of the small claims limit.

Given the 21 days plus three months’ time for a defendant to consider a claim you should aim to have everything in the portal by 30 November 2016 and ensure that you are ready to issue proceedings once the time limit is up.

 

SOFT TISSUE INJURIES: CONSULTATION IN DETAIL

 

The Government proposes either to remove compensation entirely for pain, suffering and loss of amenity in “minor” road traffic accident related soft tissue injury cases, or to fix such damages at £400.00, or £425.00 if there is psychological injury involved as well.
The detail appears in Part 2 – pages 15 – 19 of the paper – Reducing the number and cost of minor RTA related soft tissue injury claims, but with reference to Part 1 – Identifying the issues and defining RTA related soft tissue injuries.

The Government expresses no preference between the two options and therefore complete removal of general damages for minor soft tissue in RTA cases is still very much an option.

The Ministry of Justice expresses the view that “the level of compensation awarded to claimants is out of all proportion to the level of pain and suffering actually experienced by most people following a low speed RTA.”

I was unaware that the current Lord Chancellor, who we know is not a lawyer, is a doctor.
The paper refers to the Judicial College Guidelines and obviously the Government statement is a direct criticism of the Judiciary for setting the figures in the guidelines too high and for awarding too much when matters go to court.

Personal injury lawyers and the public generally should be under no illusion. These arguments will be used to bring general damages down across the board, not just in soft tissue injury matters.

The theory is that this will benefit everyone by reducing motor premiums. That theory completely removes the point of insurance. The concept of insurance is that everyone pays a certain sum and if they are unlucky enough to suffer a misfortune, burglary or injury or whatever, then they get paid out from that common fund.
If that concept is undermined, then there is no point in any insurance of any kind – Devil take the hindmost.

The paper has the nerve to say that having a fixed sum of £400.00, or £425.00, will “protect against under settlement by making claimants aware in advance of the appropriate level of compensation that they are due.”

Please all send me details of the cases where you have settled general damages in a whiplash claim for under £400.00.
The questions in relation to these proposals are:-

“Question 5: Please give your views on whether compensation for pain, suffering and loss of amenity should be removed for minor claims as defined in Part 1 of this consultation?

Please explain your reasons.

Question 6: Please give your views on whether a fixed sum should be introduced to cover minor claims as defined in Part 1 of this consultation?

Please explain your reasons.

Question 7: Please give your views on the government’s proposal to fix the amount of compensation for pain, suffering and loss of amenity for minor claims at £400 and at £425 if the claim contains a psychological element.

Please explain your reasons.”

“Minor”

For the first time a definition has been given of what the Government considered to be “minor” claims.

Again two options are put forward:-

  1. Injury duration of up to and including six months;
  2. Injury duration of up to and including nine months.

Here the Government does express a preference for the six month option.

The Government states that the average amount of compensation at present for an RTA related soft tissue injury of up to and including six months, with or without psychological claims, is around £1,800.00 and in relation to an injury of up to nine months around £2,100.00.

Separately the Government also proposes that all claims with a prognosis period of 12 months or under would automatically transfer to the small claims track, regardless of whether the measure to increase the small claims limit was implemented at the same time. (Paragraph 17).

The definition of soft tissue is the one in paragraph 16(A) of the RTA Portal, that is:-

“A claim brought by an occupant of a motor vehicle where the significant physical injury caused is a soft tissue injury and includes claims where there is a minor psychological injury second in significance to the physical injury.”

Generally it should be noted that as by definition an award of £400.00 or £425.00 is below the current small claims limit, let alone the proposed increased one, such a matter will be a small claim unless special damages bring the total above the ordinary small claims limit, which is currently £10,000.00.

Thus where there is a whiplash injury of up to 6 months duration, the small claims limit is £10,000.00, not £5,000.00.

Medical reports

One option is that no report can be obtained until six months after the injury, so as to allow the examining doctor to see whether or not there are ongoing problems. If there are then the matter does not come within this particular fixed damages scheme:-

“45. The ‘diagnosis approach’ could be used if the government decided to proceed with the option of removing compensation for PSLA from minor claims. This option would require claimants to wait until the end of the prescribed period (e.g. six months) before obtaining a supporting medical report through the MedCo Portal. An examination at this point would enable the medical expert to assess whether the claimant was still suffering from pain or other symptoms related to injuries sustained in their earlier RTA. The medical report would then be used to decide whether the claimant was entitled only to claim for non-PSLA losses, or was alternatively eligible for the new fixed tariff compensation scheme for more significant injuries.

  1. In order to control costs associated with the claim, only the cost of the six month medical report would be recoverable. If the claimant chose to seek a medical report any earlier than this, the cost of that earlier report would not be recoverable. In addition, the requirement to have a medical examination at a specific point may have a positive impact on the practice of claims being brought at the end of the limitation period.”

The Government then suggests, at paragraph 48, that there would be circumstances in which waiting six months would not be helpful to a claimant but gives no indication as to how a court would judge whether or not it had been reasonable for a claimant to obtain such a report:-

“48. However, there could be circumstances in which waiting six months would not be helpful to a claimant. A requirement for the claimant to pay for an earlier report (if one were needed before six months) could be viewed as disproportionate for claimants seeking necessary rehabilitation or who are unable to work and are seeking payment for loss of earnings given that such a report may in any event be required to evidence the claim for these losses (which remain recoverable). In addition, as well as deterring minor, exaggerated and fraudulent claims, such a requirement could also act as a disincentive for genuinely injured claimants.”

It is very obvious that the Ministry of Justice hopes that if a claimant has to wait six months before doing anything at all, then they will give up and not bother making any claim.

It is a sort of a reverse limitation period.

The Government also considers the prognosis approach, essentially the current process but has this to say:-

“53. The difficulty with this approach arises from the potential for pressure to be applied to inflate prognosis periods to just beyond the period defined as covering ‘minor’ road traffic related soft-tissue injury claims. For example, if the definition of ‘minor’ is set at up to and including six months, there is a question as to how many claims would end up with a prognosis period of seven months, thereby qualifying for compensation under the new tariff system. As noted above, the analysis of management information by MedCo will be an important safeguard in this area. The introduction of a tariff for claims as set out in Part 3 of this consultation document will also be a potential mitigation against such claims inflation.”

Thus the Ministry of Justice’s view is that the judges and the Judicial College have got it all wrong in valuing soft tissue injuries and that the doctors will simply lie and say that the prognosis period is seven months, so as to escape the fixed damages of £400.00/£425.00.

The questions in relation to six months/nine months are at questions 3 and 4:-

Question 3: The government is bringing forward two options to reduce or remove the amount of compensation for pain, suffering and loss of amenity from minor road traffic accident related soft tissue injury claims Should the scope of minor injury be defined as a duration of six months or less?

Please explain your reasons, along with any alternative suggestions for defining the scope.

Question 4: Alternatively, should the government consider applying these reforms to claims covering nine months’ duration or less?

Please explain your reasons along with any alternative suggestions for defining the scope.”

The questions in relation to how medical evidence should be obtained are at questions 8 to 10:-

“Question 8: If the option to remove compensation for pain, suffering and loss of amenity from minor road traffic accident related soft tissue injury claims is pursued, please give your views on whether the ‘Diagnosis’ approach should be used.

Please explain your reasons.

Question 9: If either option to tackle minor claims (see Part 2 of the consultation document) is pursued, please give your views on whether the ‘Prognosis’ approach should be used.

Please explain your reasons.

Question 10: Would the introduction of the ‘diagnosis’ model help to control the practice of claimants bringing their claim late in the limitation period?

Please explain your reasons and if you disagree, provide views on how the issue of late notified claims should be tackled.”

 

TARIFF FOR MORE SERIOUS RTA SOFT TISSUE INJURIES

 

Part 3 – Introduction of a Fixed Tariff System for other RTA Related Soft Tissue Injury Claims – is at pages 20 to 23 of the report.

The proposal is for a fixed – not capped – sum for each of six bands, the lowest being the 0 – 6 months band discussed in detail in my post – SOFT TISSUE INJURIES: CONSULTATION IN DETAIL and the highest being for 19 – 24 months duration whiplash injuries.

In each case the extra element for psychological injury is trivial, ranging from £25.00 in the lowest band to £100.00 in the highest band.

The proposals are:-

New Tariff Amounts
Injury

Duration

New tariff amount Psych damages awarded Tariff with psych
0–6 months £400 £25 £425
7–9 months £700 £40 £740
10–12 months £1,100 £50 £1,150
13–15 months £1,700 £60 £1,760
16–18 months £2,500 £75 £2,575
19–24 months £3,500 £100 £3,600

 

Thus psychological injuries are valued at 13.7 pence per day.

To give some idea of how these tariffs compare with the current guidelines I set out below the tariff proposals, together with the current Judicial College Guidelines (12th Edition).

 

Injury Duration Judicial college guidelines amounts

(12th edition)

New Tariff amounts
0–6 months £200 to £3,520 £400
7–9 months £1,705 to £3,520 £700
10–12 months £1,705 to £3,520 £1,100
13–15 months £1,705 to £6,380 £1,700
16–18 months £1,705 to £6,380 £2,500
19–24 months £1,705 to £6,380 £3,500

 

The Government is also consulting on whether, in exceptional cases – undefined – the court should have power to increase these figures by up to 20% for injuries lasting more than six months.

All of these proposed changes require an Act of Parliament and will be in the same legislation restricting or scrapping general damages for RTA related soft tissue injuries lasting six months or less.

The proposal to ban pre-medical offers will also be in that Bill.

Under these proposals the maximum award for general damages would be £3,600.00. If a 20% exceptional circumstances addition is allowed the maximum goes up to £4,320.00, that is a small claim under the proposed reforms.

For the matter not to be a small claim, special damages would need to take the total claim over £10,000.00 – the general civil small claims limit.

Thus for RTA related soft tissue injuries of up to 24 months the small claim limit will, in reality, be £10,000.00.

The questions in relation to this section are:-

“Question 11: The tariff figures have been developed to meet the government’s objectives. Do you agree with the figures provided?

Please explain your reasons why along with any suggested figures and detail on how they were reached.

Question 12: Should the circumstances where a discretionary uplift can be applied be contained within legislation or should the Judiciary be able to apply a discretionary uplift of up to 20% to the fixed compensation payments in exceptional circumstances?

Please explain your reasons why, along with what circumstances you might consider to be exceptional.”

 

BANNING PRE-MEDICAL OFFERS TO SETTLE

 

Part 5 – Introducing a prohibition on pre-medical offers to settle RTA related soft tissue injury claims – is at pages 31 – 32 of the report.

In reality this should be a non-issue. If every firm saw every client, then there is no problem at all as you take a Witness Statement from your client, including details of the injuries, and will be able to judge the acceptance or otherwise of any offer.

In spite of the title the Government is in fact consulting on whether there should be a ban on pre-medical offers in all personal injury claims. Question 17 and 18 read:-

“Question 17: Should the ban on pre-medical offers only apply to road traffic accident related soft tissue injuries?

Please explain your reasons why.                                                                                            

Question 18: Should there be any exemptions to the ban, if so, what should they be and why?”

Of course the first question should be “who is going to pay for the medical report upfront?”

The Ministry of Justice and the Lord Chancellor do not seem to realise that basically law firms act as banks for those clients in relation to medical reports and pay, or agree to pay, the £216.00 fee. Ultimately, in a successful case, this is recoverable from the defendant.

Most solicitors get this on credit. Obviously individual claimants will not be able to get such credit from MedCo reporters and thus will have to find the upfront if unrepresented – and it is of course the Government’s idea that everyone should be unrepresented in such claims.

There is a court fee remission. There is no medical report fee remission scheme.

There are so many ironies in these two pages, that it is hard to know where to begin.

Here is paragraph 105:-

“It has been argued that this type of offer is used to control the costs of the claims process. The argument is that it is not commercially viable to challenge low value PI claims in the fast track. It is not known exactly how many such settlements are made each year, but anecdotal evidence indicates that around 10% (in excess of 50,000 cases) of all RTA PI claims are currently settled without a medical assessment.”

We know that none of these claims will be in the fast-track as the Government is both increasing the small claims limit to £5,000.00 and slashing general damages for RTA related soft tissue injury claims so that they will all be in the small claims track.

In any event, surely a rich and powerful multi-national insurance company should be free to take a commercial view and settle a matter to avoid legal costs.

After all that is what happens up and down the country every day in litigation.

The whole tone of everything coming out of the Government, the Judiciary and everyone else for years has been that matters should be settled, and not subject to litigation, which should be a last resort.

Thus we have the courts punishing parties in costs for not making offers and the Pre-Action Protocols all, without exception, require parties to seek to settle matters.

Yet here is a proposal, which the Government intends to enshrine in an Act of Parliament, making it illegal for one party to potential litigation to make an offer to settle a matter, however generous that offer is.

Take paragraph 106:-

“There is also anecdotal evidence that a proportion of claimant solicitors request such offers on behalf of their clients to close the claim quickly and maximise the profit made from the claim. This can lead to under-settlement for claimants and possible future litigation if the accident actually causes serious long term health issues to a client whose lawyer did not arrange for an appropriate medical examination and report.”

So this is put forward as a client protection measure to prevent under-settlement for claimants.

I do not know whether to laugh or cry. The whole tone of the paper is that soft tissue injuries – and that is all we are talking about here – are massively overcompensated and that the judges, the courts and the Judicial College have all greatly overstated the level of damages for soft tissue injuries.

Hence the Government’s proposal to slash general damages in all but the most serious cases of whiplash – see my post – TARIFF FOR MORE SERIOUS RTA SOFT TISSUE INJURIES and SOFT TISSUE INJURIES: CONSULTATION IN DETAIL

So, for example, on the Government’s own figures a soft tissue injury of 0 – 6 months duration would attract an award under the Judicial College Guidelines of between £200.00 and £3,520.00. That is to be reduced to £400.00, with just £25.00 extra for psychological injuries.

Throughout the tariff system psychological injuries are valued at 13.7 pence per day.

Yet the author of this report talks about the behaviour of claimants’ solicitors leading to under settlement for claimants.

This is beyond parody.

Throughout the report the Government refers to the Judicial College 12th Edition Guidelines.

They were replaced in September 2015 by the 13th Edition and therefore the figures given for existing levels of award are in fact too low. This obviously has the effect that the proposed Government cuts in damages are even greater than appears in the report.

Yes, of course insurance companies take a commercial view – and indeed they are bound by their duty to their shareholders to do so. However the idea that insurance companies are regularly paying up on claims they know to be completely fraudulent is plain nonsense.

How curious that the Government feels the need to protect insurance companies in a way that even the insurance companies do not think necessary.

With fixed tariff damages this leads to absurdities. A client is injured and after four months agrees that s/he has no continuing symptoms and does not suffer psychological injury. By law the damages are £400.00.

Yet the parties cannot settle that aspect of the claim without obtaining a medical report which will cost £180.00 at current rates. That is ridiculous.

Furthermore if there is a need to protect claimants against under settlement and to prevent insurers from taking a commercial view, then why is this prohibition not being implemented across the board, not just the personal injury board, but the entire civil litigation process?

I refer above to the fact that the Government is consulting on having a ban wider than RTA soft tissue injury but it is clear from paragraph 112 that that is their preference.

“In introducing a ban it is important to be clear on the scope of such a ban. The government proposes that a ban on pre-medical offers should apply only to RTA related soft tissue injuries. We have considered whether the ban should be extended to all PI claims, partly to ensure consistency in approach, but we believe it is debatable how much extra benefit there would be in such an extension.”

The government is also concerned that “many major retailers have budgets set aside to settle claims speedily.”

So what are they meant to do? Refuse to settle claims speedily? Fight every claim?

As stated above in every other area of law the whole system is designed for parties to try and settle claims speedily and yet here are supermarkets being criticised for doing just that.

These are the two worst pages of illogical trash that I have ever seen from a Government department.

 

PERSONAL INJURY CONSULTATION PAPER: ANOTHER SERIOUS ERROR OF LAW BY MOJ

 

Part 6 – Implementing the recommendations of the Insurance Fraud Task Force deals with the Claim Notification Form and a proposed amendment in relation to Qualified One-Way Costs Shifting and this part appears at pages 33 and 34 of the Consultation Paper.

One proposal is that the source of referral of any claim be included on the Claim Notification Form and that that information should be notified to the Solicitors Regulation Authority and the Claims Management Regulation if it is suspected by the defendant insurance company that the claimant representative is breaching the referral fee ban.

Question 20 reads:-

Question 20: Should the Claims Notification Form be amended to include the source of referral of claim?

Please give reasons.”

The other proposal is that the provisions relating to Qualified One-Way Costs Shifting should be amended so that a claimant requires the court’s permission to discontinue within 28 days of a trial.

This is to stop late discontinuance by a claimant causing the defendant costs which it will not recover, due to QOCS.

Although superficially attractive this proposal is in fact flawed.

A similar proposal was made in relation to Employment Tribunal proceedings, but ultimately rejected. The problem is that if a claimant faces a potential penalty for discontinuing, but no penalty for going ahead and losing at trial, then the financial incentive is in fact to pursue the claim and lose, rather than doing the sensible thing, which is to discontinue.

The proposal is also based on two misunderstandings of the law, both contained in paragraph 121 of the report which reads:-

“The IFT’s Personal Injury Working Group made a recommendation in relation to QOCS and the late withdrawal of claims. All members of that Group (including claimant and defendant representatives) were concerned that the current arrangements allow for the late withdrawal of fraudulent claims with impunity, although these claims may put the defendant to considerable expense which they will not be able to recover. Part 38.4 of the Civil Procedure Rules (CPR) sets out the rules on qualified one way costs shifting (QOCS). QOCS applies in PI cases and in essence departs from the general costs provision because a losing claimant is not required to pay a successful defendant’s legal costs.”

Firstly Qualified One-Way Costs Shifting is dealt with by CPR 44.13 to 44.17 and not CPR 38.4 which deals with discontinuance.

Furthermore a claimant cannot withdraw what may be a fraudulent claim “with impunity” as the Practice Direction accompanying CPR 44 specifically deals with that situation at Practice Direction 44, 12.4(c) which provides:-

“(c) where the claimant has served a Notice of Discontinuance the court may direct that issues arising out of an allegation that the claim was fundamentally dishonest be determined notwithstanding that the notice has not been set aside pursuant to Rule 38.4;”

As I say in my book – page 148:-
“That clearly envisages that in the absence of an allegation of fundamental dishonesty a Notice of Discontinuance will not of itself trigger a costs liability. Otherwise what is the point of the Practice Direction giving the court the power to determine issues arising out of an allegation of fundamental dishonesty if the power exists anyway?

Otherwise a claimant in such a position who goes to trial and wastes everyone’s time and money and loses will generally pay no costs and will be in a better position than a claimant who sees the weakness of the case and discontinues.”

Thus it is crystal clear already that the court has the power, in a situation where fundamental dishonesty is alleged, to determine that issue and disqualify QOCS protection, whether or not the claimant has discontinued and whether or not that Notice of Discontinuance has been set aside.

It is a shame that the Ministry of Justice just reprint ABI press releases without even considering the law.

Question 21 asks:-

“Question 21: Should the Qualified One-way Costs Shifting provisions be amended so that a claimant is required to seek the court’s permission to discontinue less than 28 days before trial (Part 38.4 of CPR)?

Please state your reasons.”

 

PI CONSULTATION PAPER: OTHER MATTERS

 

Part 7 – Call for evidence on related issues – appears at pages 35 – 42 of the paper.

The Ministry of Justice seeks views on reforms to:-

  1. Credit Hire;
  2. Early Notification of Claims;
  3. Rehabilitation;
  4. Recoverability of disbursements; and
  5. Introducing a Barème type system.

The Government states that it is not minded to undertake reform immediately in these areas but “will reflect carefully on responses to this consultation and decide how best to proceed.”

Credit hire

The Government invites views on one of four potential models for dealing with credit hire agreements and question 22 reads:-

“Question 22:

Which model for reform in the way credit hire agreements are dealt with in the future do you support?

  1. a) First Party Model
  2. b) Regulatory Model
  3. c) Industry Code of Conduct
  4. d) Competitive Offer Model
  5. e) Other

Please provide supporting evidence/reasoning for your view (this can be based on either the models outlined above or alternative models not discussed here).”

First party model

Under this model the temporary replacement vehicle would be provided by the policyholder’s own insurer, regardless of who was at fault for the accident.
Thus the policyholder would be required to use their own insurance cover and so credit hire charges would cease to be the subject of litigation.

Regulatory model

This would not change the current legal position but would involve the introduction of formal regulation of temporary replacement vehicle providers.

Industry code of conduct

Competitive offer model

This model would allow the at fault party, effectively their insurer, to get their own quote which could be used to challenge the cost of the temporary replacement vehicle from the insurer of the party not at fault.

The Government expresses no preference.  

Early notification of injury/intention to claim

This involves notifying the insurer within a set time period.
Consideration is also to be given as to whether a claimant must seek medical treatment within a short period of time. For example in Sweden it is 72 hours.

The Government suggests a possibility of four weeks in this country, failing of which there would be a rebuttable presumption that the claim is minor.

Questions 25 and 26 read:-

Question 25: Do you think a system of early notification of claims should be introduced to England and Wales?

Please provide reasons and/or evidence in support of your view.

Question 26: Please give your views on the option of requiring claimants to seek medical treatment within a set period of time and whether, if treatment is not sought within this time, the claim should be presumed to be ‘minor’.

Please explain your reasons.”

Rehabilitation

The options set out are:-

“a) Option 1: Rehabilitation vouchers – which could only be redeemed for rehabilitation sessions received/attended. The rehabilitation provider would then be paid for only the actual vouchers used by the claimant, not for the number of sessions scheduled. This would help prevent phantom rehabilitation claims, but may be complex to administer as the rehabilitation provider could only be paid after the insurer has proof that the rehabilitation treatment has occurred.

 

  1. b) Option 2: All rehabilitation arranged and paid for by the defendant – some claimants and insurers have suggested that private treatment/rehabilitation should be arranged through the defendant’s side, possibly providing the claimant with a choice of a small number of providers. This would help speed up access to treatment and allow greater independence and transparency of the process.
  1. c) Option 3: No compensation payment made towards rehabilitation in low value claims – this option would mean the claimant would need to fund any rehabilitation costs themselves. The cost of rehabilitation is currently recoverable through the payment of other compensation for losses incurred (this is commonly referred to as special damages), the availability of which the government has already made clear it does not intend to restrict, and further primary legislation would be required to implement such a change.
  1. d) Option 4: MedCo to be expanded to include rehabilitation providers – the MedCo system could be extended to cover rehabilitation services in addition to medical reporting services. The addition of rehabilitation providers would need to be considered carefully, including the identification of the legislative route required to implement changes in this area.
  1. e) Option 5: Introducing fixed recoverable damages for rehabilitation treatment – this may help prevent unnecessary claims. There could, however, be difficulty in setting the overall rates as different claimants would be likely to have different rehabilitation needs. Thought would need to be given to whether the damages would be set per session or by fixing an upper value limit which could not be exceeded.”

Questions 27 and 28 refer:-

Question 27: Which of the options to tackle the developing issues in the rehabilitation sector do you agree with (select 1 or more from the list below)?

Option 1: Rehabilitation vouchers

Option 2: All rehabilitation arranged and paid for by the defendant

Option 3: No compensation payment made towards rehabilitation in low value claims

Option 4: MedCo to be expanded to include rehabilitation

Option 5: Introducing fixed recoverable damages for rehabilitation treatment

Other:

Please give your reasons.

Question 28: Do you have any other suggestions which would help prevent potential exaggerated or fraudulent rehabilitation claims?”

Recoverability of disbursements

The Government is looking at claimants having to fund their own medical reports without being able to recover the cost, even if they win. The key sentence:-

“Rather than the assumption that the defendant would nearly always pay for the provision of medical evidence, the onus would be transferred to the claimant.”

Question 29 reads:-

Question 29: Do you agree or disagree that the government explore the further option of restricting the recoverability of disbursements, e.g. for medical reports?

Please explain your reasons.”

A potential future option – a points-based / Barème approach

This is a points system with 100 representing the highest possible rating, that is the most serious injury and moving down from there.

Question 30 relates and states:-

Question 30: A new scheme based on the ‘Barème’ approach, could be integrated with the new reforms to remove compensation from minor road traffic accident related soft tissue injury claims and introduce a fixed tariff of compensation for all other road traffic accident related soft tissue injury claims. What are the advantages and disadvantages of such a scheme?

Please give reasons for your answer and state which elements, if any, should be considered in its development.”

Other matters

Question 31 reads:-

“Question 31: Please provide details of any other suggestions where further government reform could help control the costs of civil litigation.”

Part 8 – Legislative timetable and implementation

This is a very short piece on page 43 and simply says that the Government intends to implement the main reforms in relation to the small claims limit, whiplash injuries and banning pre-medical offers as soon as possible.

Part 9 – pages 44 – 74 is a list of the questions.

Part 10 is an introduction to the Impact Assessment, the full text of which appears later in the document.

Broadly it is a whole series of questions asking if those responding to the consultation agree with the assumptions made by the Government in the Impact Assessment.

These further questions appear at pages 75 – 78 of the report.

A reminder that the deadline for responding to the whole consultation paper is 5.30pm on Friday 6 January 2017.

Written by kerryunderwood

November 30, 2016 at 12:01 pm

Posted in Uncategorized

PROPORTIONATE COST ORDERS AND PROPORTIONALITY – A HIGH COURT DECISION

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In Amey LG Ltd v Cumbria County Council [2016] EWHC 2946 (TCC) (18 November 2016)

 

the Technology and Construction Court, part of the High Court, considered the interplay between the confusing terms of proportionate costs orders and proportionality.

 

The key rule for these purposes is CPR 44.2(2) which reads:-

 

“(2) If the court decides to make an order about costs –

 

  • the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but

 

  • the court may make a different order.”

 

CPR 44.2(4) reads:-

 

“(4)        In deciding what order (if any) to make about costs, the court will have regard to all the circumstances, including –

 

  • the conduct of all the parties;

 

  • whether a party has succeeded on part of its case, even if that party has not been wholly successful; and

 

  • any admissible offer to settle made by a party which is drawn to the court’s attention, and which is not an offer to which costs consequences under Part 36 apply.”

 

Thus the sort of orders made under these provisions are that, although successful, a party will only receive say 50% of its costs as it lost on certain issues, or recovered a much smaller sum than it had claimed.

 

In this case the High Court ordered that the successful claimant should recover 85% of its costs.

 

These orders are generally referred to as “proportionate costs orders” because the successful party is awarded only a proportion of its costs, rather than all of its costs.

 

This is completely separate from any reduction on detailed assessment; it is a statement in principle that whatever costs are allowed should not be allowed in full but should be subject to a percentage deduction to reflect issues in the case. In other words it is not an “all or nothing” approach.

 

The key issue in this case, and relevant to other cases, is whether the separate concept of proportionality should come into play at this stage.

 

Here the court said that if proportionality was intended to be a relevant factor under CPR 44.2 it would have been specifically mentioned in the rule, and it is not.

 

The court expressed concern about the risk of “double jeopardy” whereby the court took account of proportionality issues at the CPR 44.2 stage and, subsequently the, the Costs Judge assessing the bill further reduced the costs under the well-known proportionality test in CPR 44.3.

 

This point, in the context of conduct, had previously been considered, with the same concerns being expressed in Ultraframe v Fielding [2006] EWCA Civ 1660.

 

Nevertheless the court here recognised that considerations of proportionality might feed into the process by which the court discounted what would otherwise have been an order for 100% costs, subject as always to detailed assessment.

 

The court suggested the following approach:-

 

  • In most, if not all, cases “a clear dividing line” can be drawn between the CPR 44.2 factors and proportionality.

 

  • The trial judge’s task should be limited to addressing the “relevant circumstances” (including conduct, success and admissible offers), their impact on costs, and whether (and how) they should be reflected in the costs order.

 

  • The judge should make a proportionate costs order based on those considerations, but not further consider what costs would have been incurred if the action had been pursued in a proportionate manner.

 

  • Although the judge might have some costs information (for example, from costs budgets in budgeted cases, which this was not), whether, and to what extent, costs had been unreasonably incurred, were matters for the detailed assessment.

 

  • If a trial judge does take account of proportionality when deciding what proportionate costs order to make (and makes a discount reflecting his assessment) that should be clearly stated in the order or judgment, so that, when conducting the detailed assessment, the costs judge knows what the trial judge has taken into account, and why.

 

Please see my related blogs:-

 

PROPORTIONALITY AND REASONABLENESS: ANOTHER JUDGE ALL OVER THE PLACE

 

PROPORTIONALITY: THE EMPEROR’S NEW CLOTHES

 

PROPORTIONALITY AGAIN : COURT CHOPS REASONABLE COSTS BY 60%

Written by kerryunderwood

November 30, 2016 at 10:27 am

Posted in Uncategorized

PERSONAL INJURY CONSULTATION PAPER: OTHER MATTERS

with one comment


I deal with this subject in detail in my forthcoming book – Personal Injury Small Claims, Portals and Fixed Costs available from Amazon here.

 

On 17 November 2016 the Ministry of Justice published its consultation paper – Reforming the Soft Tissue Injury (Whiplash) Claims Process which can be accessed and responded to here .

 

In other blogs, listed at the bottom of this piece, I have dealt with the key proposals in relation to the personal injury small claims limit, scrapping or restricting general damages for RTA whiplash injuries, creating a tariff system for more serious whiplash injuries and banning pre-medical report offers, amending the rule concerning discontinuance in Qualified One-Way Costs Shifting and disclosing on the Claim Notification Form the source of the claim.

 

This post deals with the remaining issues.

 

Part 7 – Call for evidence on related issues – appears at pages 35 – 42 of the paper.

 

The Ministry of Justice seeks views on reforms to:-

 

  1. Credit Hire;
  2. Early Notification of Claims;
  3. Rehabilitation;
  4. Recoverability of disbursements; and
  5. Introducing a Barème type system.

 

The Government states that it is not minded to undertake reform immediately in these areas but “will reflect carefully on responses to this consultation and decide how best to proceed.”

 

Credit hire

 

The Government invites views on one of four potential models for dealing with credit hire agreements and question 22 reads:-

 

“Question 22:

 

Which model for reform in the way credit hire agreements are dealt with in the future do you support?

 

  1. a) First Party Model
  2. b) Regulatory Model
  3. c) Industry Code of Conduct
  4. d) Competitive Offer Model
  5. e) Other

 

Please provide supporting evidence/reasoning for your view (this can be based on either the models outlined above or alternative models not discussed here).”

 

First party model

 

Under this model the temporary replacement vehicle would be provided by the policyholder’s own insurer, regardless of who was at fault for the accident.
Thus the policyholder would be required to use their own insurance cover and so credit hire charges would cease to be the subject of litigation.

 

Regulatory model

 

This would not change the current legal position but would involve the introduction of formal regulation of temporary replacement vehicle providers.

 

Industry code of conduct

 

Competitive offer model

 

This model would allow the at fault party, effectively their insurer, to get their own quote which could be used to challenge the cost of the temporary replacement vehicle from the insurer of the party not at fault.

 

The Government expresses no preference.  

 

Early notification of injury/intention to claim

 

This involves notifying the insurer within a set time period.
Consideration is also to be given as to whether a claimant must seek medical treatment within a short period of time. For example in Sweden it is 72 hours.

 

The Government suggests a possibility of four weeks in this country, failing of which there would be a rebuttable presumption that the claim is minor.

 

Questions 25 and 26 read:-

 

Question 25: Do you think a system of early notification of claims should be introduced to England and Wales?

 

Please provide reasons and/or evidence in support of your view.

 

Question 26: Please give your views on the option of requiring claimants to seek medical treatment within a set period of time and whether, if treatment is not sought within this time, the claim should be presumed to be ‘minor’.

 

Please explain your reasons.”

 

Rehabilitation

 

The options set out are:-

 

“a) Option 1: Rehabilitation vouchers – which could only be redeemed for rehabilitation sessions received/attended. The rehabilitation provider would then be paid for only the actual vouchers used by the claimant, not for the number of sessions scheduled. This would help prevent phantom rehabilitation claims, but may be complex to administer as the rehabilitation provider could only be paid after the insurer has proof that the rehabilitation treatment has occurred.

 

  1. b) Option 2: All rehabilitation arranged and paid for by the defendant – some claimants and insurers have suggested that private treatment/rehabilitation should be arranged through the defendant’s side, possibly providing the claimant with a choice of a small number of providers. This would help speed up access to treatment and allow greater independence and transparency of the process.

 

  1. c) Option 3: No compensation payment made towards rehabilitation in low value claims – this option would mean the claimant would need to fund any rehabilitation costs themselves. The cost of rehabilitation is currently recoverable through the payment of other compensation for losses incurred (this is commonly referred to as special damages), the availability of which the government has already made clear it does not intend to restrict, and further primary legislation would be required to implement such a change.

 

  1. d) Option 4: MedCo to be expanded to include rehabilitation providers – the MedCo system could be extended to cover rehabilitation services in addition to medical reporting services. The addition of rehabilitation providers would need to be considered carefully, including the identification of the legislative route required to implement changes in this area.

 

  1. e) Option 5: Introducing fixed recoverable damages for rehabilitation treatment – this may help prevent unnecessary claims. There could, however, be difficulty in setting the overall rates as different claimants would be likely to have different rehabilitation needs. Thought would need to be given to whether the damages would be set per session or by fixing an upper value limit which could not be exceeded.”

 

Questions 27 and 28 refer:-

 

Question 27: Which of the options to tackle the developing issues in the rehabilitation sector do you agree with (select 1 or more from the list below)?

 

Option 1: Rehabilitation vouchers

 

Option 2: All rehabilitation arranged and paid for by the defendant

 

Option 3: No compensation payment made towards rehabilitation in low value claims

 

Option 4: MedCo to be expanded to include rehabilitation

 

Option 5: Introducing fixed recoverable damages for rehabilitation treatment

 

Other:

 

Please give your reasons.

 

Question 28: Do you have any other suggestions which would help prevent potential exaggerated or fraudulent rehabilitation claims?”

 

Recoverability of disbursements

 

The Government is looking at claimants having to fund their own medical reports without being able to recover the cost, even if they win. The key sentence:-

 

“Rather than the assumption that the defendant would nearly always pay for the provision of medical evidence, the onus would be transferred to the claimant.”

 

Question 29 reads:-

 

Question 29: Do you agree or disagree that the government explore the further option of restricting the recoverability of disbursements, e.g. for medical reports?

 

Please explain your reasons.”

 

A potential future option – a points-based / Barème approach

 

This is a points system with 100 representing the highest possible rating, that is the most serious injury and moving down from there.

 

Question 30 relates and states:-

 

Question 30: A new scheme based on the ‘Barème’ approach, could be integrated with the new reforms to remove compensation from minor road traffic accident related soft tissue injury claims and introduce a fixed tariff of compensation for all other road traffic accident related soft tissue injury claims. What are the advantages and disadvantages of such a scheme?

 

Please give reasons for your answer and state which elements, if any, should be considered in its development.”

 

Other matters

 

Question 31 reads:-

 

“Question 31: Please provide details of any other suggestions where further government reform could help control the costs of civil litigation.”

 

Part 8 – Legislative timetable and implementation

 

This is a very short piece on page 43 and simply says that the Government intends to implement the main reforms in relation to the small claims limit, whiplash injuries and banning pre-medical offers as soon as possible.

 

Part 9 – pages 44 – 74 is a list of the questions.

 

Part 10 is an introduction to the Impact Assessment, the full text of which appears later in the document.

 

Broadly it is a whole series of questions asking if those responding to the consultation agree with the assumptions made by the Government in the Impact Assessment.

 

These further questions appear at pages 75 – 78 of the report.

 

A reminder that the deadline for responding to the whole consultation paper is 5.30pm on Friday 6 January 2017.

 

Please see my related blogs:-

 

PERSONAL INJURY CONSULTATION PAPER: ANOTHER SERIOUS ERROR OF LAW BY MOJ

 

SOFT TISSUE INJURIES: CONSULTATION IN DETAIL

 

PERSONAL INJURY SMALL CLAIMS LIMIT: CONSULTATION IN DETAIL

 

ANYWHERE COUNTY COURT 2018: SEND IN THE CLOWNS

 

TARIFF FOR MORE SERIOUS RTA SOFT TISSUE INJURIES

 

BANNING PRE-MEDICAL OFFERS TO SETTLE

 

SMALL CLAIMS LIMIT INCREASE: KEY DATES FOR PORTALLING & ISSUING

 

PORTAL, PORTAL LITTLE CLAIM

Written by kerryunderwood

November 29, 2016 at 9:03 am

Posted in Uncategorized

PERSONAL INJURY CONSULTATION PAPER: ANOTHER SERIOUS ERROR OF LAW BY MOJ

with one comment


I deal with this subject in detail in my forthcoming book – Personal Injury Small Claims, Portals and Fixed Costs available from Amazon here.

 

On 17 November 2016 the Ministry of Justice published its consultation paper – Reforming the Soft Tissue Injury (Whiplash) Claims Process which can be accessed and responded to here .

 

In other blogs, listed at the bottom of this piece, I have dealt with the key proposals in relation to the personal injury small claims limit, scrapping or restricting general damages for RTA whiplash injuries, creating a tariff system for more serious whiplash injuries and banning pre-medical report offers.

 

 

Part 6 – Implementing the recommendations of the Insurance Fraud Task Force deals with the Claim Notification Form and a proposed amendment in relation to Qualified One-Way Costs Shifting and this part appears at pages 33 and 34 of the Consultation Paper.

 

One proposal is that the source of referral of any claim be included on the Claim Notification Form and that that information should be notified to the Solicitors Regulation Authority and the Claims Management Regulation if it is suspected by the defendant insurance company that the claimant representative is breaching the referral fee ban.

 

Question 20 reads:-

 

Question 20: Should the Claims Notification Form be amended to include the source of referral of claim?

 

Please give reasons.”

 

The other proposal is that the provisions relating to Qualified One-Way Costs Shifting should be amended so that a claimant requires the court’s permission to discontinue within 28 days of a trial.

 

This is to stop late discontinuance by a claimant causing the defendant costs which it will not recover, due to QOCS.

 

Although superficially attractive this proposal is in fact flawed.

 

A similar proposal was made in relation to Employment Tribunal proceedings, but ultimately rejected. The problem is that if a claimant faces a potential penalty for discontinuing, but no penalty for going ahead and losing at trial, then the financial incentive is in fact to pursue the claim and lose, rather than doing the sensible thing, which is to discontinue.

 

The proposal is also based on two misunderstandings of the law, both contained in paragraph 121 of the report which reads:-

 

“The IFT’s Personal Injury Working Group made a recommendation in relation to QOCS and the late withdrawal of claims. All members of that Group (including claimant and defendant representatives) were concerned that the current arrangements allow for the late withdrawal of fraudulent claims with impunity, although these claims may put the defendant to considerable expense which they will not be able to recover. Part 38.4 of the Civil Procedure Rules (CPR) sets out the rules on qualified one way costs shifting (QOCS). QOCS applies in PI cases and in essence departs from the general costs provision because a losing claimant is not required to pay a successful defendant’s legal costs.”

 

Firstly Qualified One-Way Costs Shifting is dealt with by CPR 44.13 to 44.17 and not CPR 38.4 which deals with discontinuance.

 

Furthermore a claimant cannot withdraw what may be a fraudulent claim “with impunity” as the Practice Direction accompanying CPR 44 specifically deals with that situation at Practice Direction 44, 12.4(c) which provides:-

 

“(c) where the claimant has served a Notice of Discontinuance the court may direct that issues arising out of an allegation that the claim was fundamentally dishonest be determined notwithstanding that the notice has not been set aside pursuant to Rule 38.4;”

 

As I say in my book – page 148:-
“That clearly envisages that in the absence of an allegation of fundamental dishonesty a Notice of Discontinuance will not of itself trigger a costs liability. Otherwise what is the point of the Practice Direction giving the court the power to determine issues arising out of an allegation of fundamental dishonesty if the power exists anyway?

 

Otherwise a claimant in such a position who goes to trial and wastes everyone’s time and money and loses will generally pay no costs and will be in a better position than a claimant who sees the weakness of the case and discontinues.”

 

Thus it is crystal clear already that the court has the power, in a situation where fundamental dishonesty is alleged, to determine that issue and disqualify QOCS protection, whether or not the claimant has discontinued and whether or not that Notice of Discontinuance has been set aside.

 

It is a shame that the Ministry of Justice just reprint ABI press releases without even considering the law.

 

Question 21 asks:-

 

“Question 21: Should the Qualified One-way Costs Shifting provisions be amended so that a claimant is required to seek the court’s permission to discontinue less than 28 days before trial (Part 38.4 of CPR)?

 

Please state your reasons.”

 

 

 

Please see my related blogs:-

 

SOFT TISSUE INJURIES: CONSULTATION IN DETAIL

 

PERSONAL INJURY SMALL CLAIMS LIMIT: CONSULTATION IN DETAIL

 

ANYWHERE COUNTY COURT 2018: SEND IN THE CLOWNS

 

TARIFF FOR MORE SERIOUS RTA SOFT TISSUE INJURIES

 

BANNING PRE-MEDICAL OFFERS TO SETTLE

 

SMALL CLAIMS LIMIT INCREASE: KEY DATES FOR PORTALLING & ISSUING

 

 

 

Written by kerryunderwood

November 28, 2016 at 12:25 pm

Posted in Uncategorized

THE TWELVE DAYS OF CHRISTMAS, BOLTON STYLE

with 11 comments


by Jonathan Maas and Kerry Underwood

 

On the first day of Christmas,
my council gave to me:
Financial transparency.

On the second day of Christmas,
my council gave to me:
Newspaper House
and financial transparency.

On the third day of Christmas,
my council gave to me:
A rooftop lounge,
Newspaper House
and financial transparency.

On the fourth day of Christmas,
my council gave to me:
Four barbeques,
A rooftop lounge,
Newspaper House
And financial transparency.

On the fifth day of Christmas,
my council gave to me:
Threeeee hundred grand,
Four barbeques,

A rooftop lounge,
Newspaper House
And financial transparency.

On the sixth day of Christmas,
my council gave to me:
Six Lamborghinis,
Threeeee hundred grand,
Four barbeques,

A rooftop lounge,
Newspaper House
And financial transparency.

On the seventh day of Christmas,
my council gave to me:
Seven fitted kitchens,
Six Lamborghinis,
Threeeee hundred grand,
Four barbeques,

A rooftop lounge,
Newspaper House
And financial transparency.

On the eighth day of Christmas,
my council gave to me:
Eight carat doorknobs,
Seven fitted kitchens,
Six Lamborghinis,
Threeeee hundred grand,
Four barbeques,

A rooftop lounge,
Newspaper House
And financial transparency.

On the ninth day of Christmas,
my council gave to me:
Nintendo consoles,
Eight carat doorknobs,
Seven fitted kitchens,
Six Lamborghinis,
Threeeee hundred grand,
Four barbeques,

A rooftop lounge,
Newspaper House
And financial transparency.

On the tenth day of Christmas,
my council gave to me:
Ten leather sofas,
Nintendo consoles,
Eight carat doorknobs,
Seven fitted kitchens,
Six Lamborghinis,
Threeeee hundred grand,
Four barbeques,

A rooftop lounge,
Newspaper House
And financial transparency.

On the eleventh day of Christmas,
my council gave to me:
Elevenses of Champagne,
Ten leather sofas,
Nintendo consoles,
Eight carat doorknobs,
Seven fitted kitchens,
Six Lamborghinis,
Threeeee hundred grand,
Four barbeques,

A rooftop lounge,
Newspaper House
And financial transparency.

On the twelfth day of Christmas,
my council gave to me:
Twelve Samsung TVs,
Elevenses of Champagne,
Ten leather sofas,
Nintendo consoles,
Eight carat doorknobs,
Seven fitted kitchens,
Six Lamborghinis,
Threeeee hundred grand,
Four barbeques,

A rooftop lounge,
Newspaper House
And financial transparency.

 

 

 

Written by kerryunderwood

November 25, 2016 at 12:27 pm

Posted in Uncategorized

COSTS IN CASES AGAINST PUBLISHERS: CONSULTATION

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On 1 November 2016 the Government announced the opening of a consultation in relation to legal costs in publishing cases, including libel, slander, breach of confidence, misuse of private information, malicious falsehood and harassment – Consultation on the Leveson Inquiry and its Implementation.

 

Section 40 of the Crime and Courts Act 2013 and Part 2 of the Leveson Inquiry provides that a member of a recognised self-regulator that loses a relevant media case in court will not have to pay the winning side’s costs.

 

However a publisher that is not a member of such a scheme has to pay both sides’ costs, even if the publisher wins the case.

 

Thus a publisher who joins a recognised self-regulator scheme operates in a costs free environment in court, whereas a publisher that is not a member of such a scheme has to pay all of the costs in any event.

 

This proposal is based on the fact that recognised self-regulators have to have a low cost arbitration scheme that replaces the need for court action.

 

Section 40 has never been brought into force.

 

A self-regulator has now been approved and on 11 October 2016 the House of Lords voted to amend the Investigatory Powers Bill so as to implement Section 40 but that amendment was defeated in the House in Commons on 1 November 2016.

 

The consultation seeks views on four options:-

 

  • to keep Section 40 “actively under review”;

 

  • to commence Section 40 in full;

 

  • to repeal Section 40 on the ground that the incentive to join a self-regulator is no longer required;

 

  • to commence Section 40 in part, so that it would protect members of a recognised self-regulator, that is in effect those signed up to the approved regulator – IMPRESS, but not to implement the section which punishes a non-member by ordering them to pay both sides’ costs in any event.

 

The text of Section 40 of the Crime and Courts Act 2013 reads:-

 

40. Awards of costs

 

(1)This section applies where—

 

  • a relevant claim is made against a person (“the defendant”),

 

  • the defendant was a relevant publisher at the material time, and

 

  • the claim is related to the publication of news-related material.

 

(2) If the defendant was a member of an approved regulator at the time when the claim was commenced (or was unable to be a member at that time for reasons beyond the defendant’s control or it would have been unreasonable in the circumstances for the defendant to have been a member at that time), the court must not award costs against the defendant unless satisfied that—

 

  • the issues raised by the claim could not have been resolved by using an arbitration scheme of the approved regulator, or

 

  • it is just and equitable in all the circumstances of the case to award costs against the defendant.

 

(3) If the defendant was not a member of an approved regulator at the time when the claim was commenced (but would have been able to be a member at that time and it would have been reasonable in the circumstances for the defendant to have been a member at that time), the court must award costs against the defendant unless satisfied that—

 

  • the issues raised by the claim could not have been resolved by using an arbitration scheme of the approved regulator (had the defendant been a member), or

 

  • it is just and equitable in all the circumstances of the case to make a different award of costs or make no award of costs.

 

(4)The Secretary of State must take steps to put in place arrangements for protecting the position in costs of parties to relevant claims who have entered into agreements under section 58 of the Courts and Legal Services Act 1990.

 

(5)This section is not to be read as limiting any power to make rules of court.

 

(6)This section does not apply until such time as a body is first recognised as an approved regulator.

 

The consultation ends on 10 January 2017.

Written by kerryunderwood

November 25, 2016 at 9:20 am

Posted in Uncategorized

PORTAL, PORTAL LITTLE CLAIM

leave a comment »


Here is a response to the consultation paper on soft tissue injuries that the Ministry of Justice may just about understand. To the tune of Twinkle, Twinkle Little Star – but you may have guessed that. Or sing along to Johnny Cash’s Ballad of a Teenage Queen.

Portal, portal little claim

Now there’s no-one we can blame

Even though your neck is broke

English law thinks that’s a joke

Go and play the small claims track

You won’t get your money back

All the sums are out of date

Might as well claim off the state

Soon we’ll have no courts at all

Life will then be such a ball

If you’re rich and powerful

If you’re poor just sit and bawl

Related blog:-

Anywhere County Court 2018: Send in the Clowns

2016: Some Predictions

Briggs Online Live Open Court (BOLLOC)

A Christmas Carol by the High Court

2017: Some Predictions

The Legal Christmas Song Contest

Written by kerryunderwood

November 24, 2016 at 11:02 am

Posted in Uncategorized

SMALL CLAIMS LIMIT INCREASE: KEY DATES FOR PORTALLING & ISSUING

with 3 comments


On 17 November 2016 the Ministry of Justice published its consultation paper – Reforming the Soft Tissue Injury (Whiplash) Claims Process which can be accessed and responded to here and I wrote about the personal injury small claims limit proposal in detail in my post PERSONAL INJURY SMALL CLAIMS LIMIT: CONSULTATION IN DETAIL.

 

As any increase in the small claims limit will be dealt with by amendment to the Civil Procedure Rules, this change could be in as soon as April 2017.

 

On all previous occasions the key date has been when proceedings are issued.

 

Thus two passengers are injured in the same accident and both have claims worth £4,000.00. One claim is issued in March 2017 and thus is cost bearing and the other is issued in April 2017 and is not cost bearing.

 

The non-personal injury small claims limit was increased from £5,000.00 to £10,000.00 in April 2013 and that was how it was implemented.

 

Likewise under section 57 of the Criminal Justice and Courts Act 2015 the relevant date is when proceedings were issued and not the date of the cause of action. Any claim issued on or after 13 April 2015, whenever the accident occurred, is caught by the fundamental dishonesty provisions.

 

“Proceedings” under that Act means issued at court and so being in the portal process does not count.

 

It is likely to be the same with a small claims so that court proceedings must be issued by the end of March 2017 to avoid a sub £5,000.00 claim being allocated to the small claims track.

 

There is no precedent as the small claims limit for personal injury matters has not risen since 1991, before the portals existed.

 

It is strongly arguable that reaching Portal Stage 3 means proceedings have been issued, as indeed they have with a court fee paid.

 

Unfortunately the conduct of the Ministry of Justice is currently not always logical or consistent with the rule of law, and so it cannot be assumed that the rule change will provide that anything in Stage 3 is issued for the purposes of the small claims limit.

 

Given the 21 days plus three months’ time for a defendant to consider a claim you should aim to have everything in the portal by 30 November 2016 and ensure that you are ready to issue proceedings once the time limit is up.

 

Please see my related blogs:-

 

SOFT TISSUE INJURIES: CONSULTATION IN DETAIL

 

PERSONAL INJURY SMALL CLAIMS LIMIT: CONSULTATION IN DETAIL

 

ANYWHERE COUNTY COURT 2018: SEND IN THE CLOWNS

 

TARIFF FOR MORE SERIOUS RTA SOFT TISSUE INJURIES

 

BANNING PRE-MEDICAL OFFERS TO SETTLE

 

 

 

Written by kerryunderwood

November 24, 2016 at 8:35 am

Posted in Uncategorized

BANNING PRE-MEDICAL OFFERS TO SETTLE

with 10 comments


I deal with this subject in detail in my forthcoming book – Personal Injury Small Claims, Portals and Fixed Costs available from Amazon here.

This is the fourth of my pieces analysing the proposals in the Ministry of Justice consultation paper – Reforming the Soft Tissue Injury (Whiplash) Claims Process which can be accessed and responded to here.

The consultation closes on 6 January 2017 at 5.30pm.

Part 5 – Introducing a prohibition on pre-medical offers to settle RTA related soft tissue injury claims – is at pages 31 – 32 of the report.

In reality this should be a non-issue. If every firm saw every client, then there is no problem at all as you take a Witness Statement from your client, including details of the injuries, and will be able to judge the acceptance or otherwise of any offer.

In spite of the title the Government is in fact consulting on whether there should be a ban on pre-medical offers in all personal injury claims. Question 17 and 18 read:-

“Question 17: Should the ban on pre-medical offers only apply to road traffic accident related soft tissue injuries?

 

Please explain your reasons why.

                                                                                                                               

Question 18: Should there be any exemptions to the ban, if so, what should they be and why?”

Of course the first question should be “who is going to pay for the medical report upfront?”

The Ministry of Justice and the Lord Chancellor do not seem to realise that basically law firms act as banks for those clients in relation to medical reports and pay, or agree to pay, the £216.00 fee. Ultimately, in a successful case, this is recoverable from the defendant.

Most solicitors get this on credit. Obviously individual claimants will not be able to get such credit from MedCo reporters and thus will have to find the upfront if unrepresented – and it is of course the Government’s idea that everyone should be unrepresented in such claims.

There is a court fee remission. There is no medical report fee remission scheme.

There are so many ironies in these two pages, that it is hard to know where to begin.

Here is paragraph 105:-

“It has been argued that this type of offer is used to control the costs of the claims process. The argument is that it is not commercially viable to challenge low value PI claims in the fast track. It is not known exactly how many such settlements are made each year, but anecdotal evidence indicates that around 10% (in excess of 50,000 cases) of all RTA PI claims are currently settled without a medical assessment.”

We know that none of these claims will be in the fast-track as the Government is both increasing the small claims limit to £5,000.00 and slashing general damages for RTA related soft tissue injury claims so that they will all be in the small claims track.

In any event, surely a rich and powerful multi-national insurance company should be free to take a commercial view and settle a matter to avoid legal costs.

After all that is what happens up and down the country every day in litigation.

The whole tone of everything coming out of the Government, the Judiciary and everyone else for years has been that matters should be settled, and not subject to litigation, which should be a last resort.

Thus we have the courts punishing parties in costs for not making offers and the Pre-Action Protocols all, without exception, require parties to seek to settle matters.

Yet here is a proposal, which the Government intends to enshrine in an Act of Parliament, making it illegal for one party to potential litigation to make an offer to settle a matter, however generous that offer is.

Take paragraph 106:-

“There is also anecdotal evidence that a proportion of claimant solicitors request such offers on behalf of their clients to close the claim quickly and maximise the profit made from the claim. This can lead to under-settlement for claimants and possible future litigation if the accident actually causes serious long term health issues to a client whose lawyer did not arrange for an appropriate medical examination and report.”

So this is put forward as a client protection measure to prevent under-settlement for claimants.

I do not know whether to laugh or cry. The whole tone of the paper is that soft tissue injuries – and that is all we are talking about here – are massively overcompensated and that the judges, the courts and the Judicial College have all greatly overstated the level of damages for soft tissue injuries.

Hence the Government’s proposal to slash general damages in all but the most serious cases of whiplash – see my post – TARIFF FOR MORE SERIOUS RTA SOFT TISSUE INJURIES and SOFT TISSUE INJURIES: CONSULTATION IN DETAIL

So, for example, on the Government’s own figures a soft tissue injury of 0 – 6 months duration would attract an award under the Judicial College Guidelines of between £200.00 and £3,520.00. That is to be reduced to £400.00, with just £25.00 extra for psychological injuries.

Throughout the tariff system psychological injuries are valued at 13.7 pence per day.

Yet the author of this report talks about the behaviour of claimants’ solicitors leading to under settlement for claimants.

This is beyond parody.

Throughout the report the Government refers to the Judicial College 12th Edition Guidelines.

They were replaced in September 2015 by the 13th Edition and therefore the figures given for existing levels of award are in fact too low. This obviously has the effect that the proposed Government cuts in damages are even greater than appears in the report.

Yes, of course insurance companies take a commercial view – and indeed they are bound by their duty to their shareholders to do so. However the idea that insurance companies are regularly paying up on claims they know to be completely fraudulent is plain nonsense.

How curious that the Government feels the need to protect insurance companies in a way that even the insurance companies do not think necessary.

With fixed tariff damages this leads to absurdities. A client is injured and after four months agrees that s/he has no continuing symptoms and does not suffer psychological injury. By law the damages are £400.00.

Yet the parties cannot settle that aspect of the claim without obtaining a medical report which will cost £180.00 at current rates. That is ridiculous.

Furthermore if there is a need to protect claimants against under settlement and to prevent insurers from taking a commercial view, then why is this prohibition not being implemented across the board, not just the personal injury board, but the entire civil litigation process?

 

I refer above to the fact that the Government is consulting on having a ban wider than RTA soft tissue injury but it is clear from paragraph 112 that that is their preference.

“In introducing a ban it is important to be clear on the scope of such a ban. The government proposes that a ban on pre-medical offers should apply only to RTA related soft tissue injuries. We have considered whether the ban should be extended to all PI claims, partly to ensure consistency in approach, but we believe it is debatable how much extra benefit there would be in such an extension.”

The government is also concerned that “many major retailers have budgets set aside to settle claims speedily.”

So what are they meant to do? Refuse to settle claims speedily? Fight every claim?

As stated above in every other area of law the whole system is designed for parties to try and settle claims speedily and yet here are supermarkets being criticised for doing just that.

These are the two worst pages of illogical trash that I have ever seen from a Government department.

Please see my related blogs:-

SOFT TISSUE INJURIES: CONSULTATION IN DETAIL

PERSONAL INJURY SMALL CLAIMS LIMIT: CONSULTATION IN DETAIL

ANYWHERE COUNTY COURT 2018: SEND IN THE CLOWNS

TARIFF FOR MORE SERIOUS RTA SOFT TISSUE INJURIES

Written by kerryunderwood

November 23, 2016 at 9:54 am

Posted in Uncategorized

TARIFF FOR MORE SERIOUS RTA SOFT TISSUE INJURIES

with 6 comments


I deal with this subject in detail in my forthcoming book – Personal Injury Small Claims, Portals and Fixed Costs available from Amazon here.

This is the third of my pieces analysing the proposals in the Ministry of Justice consultation paper – Reforming the Soft Tissue Injury (Whiplash) Claims Process which can be accessed and responded to here.

The consultation ends on 6 January 2017 at 5.30pm.

Part 3 – Introduction of a Fixed Tariff System for other RTA Related Soft Tissue Injury Claims – is at pages 20 to 23 of the report.

The proposal is for a fixed – not capped – sum for each of six bands, the lowest being the 0 – 6 months band discussed in detail in my post – SOFT TISSUE INJURIES: CONSULTATION IN DETAIL and the highest being for 19 – 24 months duration whiplash injuries.

In each case the extra element for psychological injury is trivial, ranging from £25.00 in the lowest band to £100.00 in the highest band.

The proposals are:-

New Tariff Amounts
Injury

Duration

New tariff amount Psych damages awarded Tariff with psych
0–6 months £400 £25 £425
7–9 months £700 £40 £740
10–12 months £1,100 £50 £1,150
13–15 months £1,700 £60 £1,760
16–18 months £2,500 £75 £2,575
19–24 months £3,500 £100 £3,600

Thus psychological injuries are valued at 13.7 pence per day.

To give some idea of how these tariffs compare with the current guidelines I set out below the tariff proposals, together with the current Judicial College Guidelines (12th Edition).

Injury Duration Judicial college guidelines amounts

(12th edition)

New Tariff amounts
0–6 months £200 to £3,520 £400
7–9 months £1,705 to £3,520 £700
10–12 months £1,705 to £3,520 £1,100
13–15 months £1,705 to £6,380 £1,700
16–18 months £1,705 to £6,380 £2,500
19–24 months £1,705 to £6,380 £3,500

The Government is also consulting on whether, in exceptional cases – undefined – the court should have power to increase these figures by up to 20% for injuries lasting more than six months.

All of these proposed changes require an Act of Parliament and will be in the same legislation restricting or scrapping general damages for RTA related soft tissue injuries lasting six months or less.

The proposal to ban pre-medical offers will also be in that Bill.

Under these proposals the maximum award for general damages would be £3,600.00. If a 20% exceptional circumstances addition is allowed the maximum goes up to £4,320.00, that is a small claim under the proposed reforms.

For the matter not to be a small claim, special damages would need to take the total claim over £10,000.00 – the general civil small claims limit.

Thus for RTA related soft tissue injuries of up to 24 months the small claim limit will, in reality, be £10,000.00.

The questions in relation to this section are:-

“Question 11: The tariff figures have been developed to meet the government’s objectives. Do you agree with the figures provided?

 

Please explain your reasons why along with any suggested figures and detail on how they were reached.

 

Question 12: Should the circumstances where a discretionary uplift can be applied be contained within legislation or should the Judiciary be able to apply a discretionary uplift of up to 20% to the fixed compensation payments in exceptional circumstances?

 

Please explain your reasons why, along with what circumstances you might consider to be exceptional.”

 

A reminder that the consultation ends on 6 January 2017 at 5.30pm. The link to the paper is above.

Please see my related blogs:-

SOFT TISSUE INJURIES: CONSULTATION IN DETAIL

PERSONAL INJURY SMALL CLAIMS LIMIT: CONSULTATION IN DETAIL

ANYWHERE COUNTY COURT 2018: SEND IN THE CLOWNS

Written by kerryunderwood

November 22, 2016 at 8:45 am

Posted in Uncategorized

SOFT TISSUE INJURIES: CONSULTATION IN DETAIL

with 10 comments


I deal with this subject in detail in my forthcoming book – Personal Injury Small Claims, Portals and Fixed Costs available from Amazon here.

The paper can be accessed and responded to here – consultation ends on 6 January 2017 at 5.30pm.

The Government proposes either to remove compensation entirely for pain, suffering and loss of amenity in “minor” road traffic accident related soft tissue injury cases, or to fix such damages at £400.00, or £425.00 if there is psychological injury involved as well.
The detail appears in Part 2 – pages 15 – 19 of the paper – Reducing the number and cost of minor RTA related soft tissue injury claims, but with reference to Part 1 – Identifying the issues and defining RTA related soft tissue injuries.

The Government expresses no preference between the two options and therefore complete removal of general damages for minor soft tissue in RTA cases is still very much an option.

The Ministry of Justice expresses the view that “the level of compensation awarded to claimants is out of all proportion to the level of pain and suffering actually experienced by most people following a low speed RTA. “

I was unaware that the current Lord Chancellor, who we know is not a lawyer, is a doctor.
The paper refers to the Judicial College Guidelines and obviously the Government statement is a direct criticism of the Judiciary for setting the figures in the guidelines too high and for awarding too much when matters go to court.

Personal injury lawyers and the public generally should be under no illusion. These arguments will be used to bring general damages down across the board, not just in soft tissue injury matters.

 

The theory is that this will benefit everyone by reducing motor premiums. That theory completely removes the point of insurance. The concept of insurance is that everyone pays a certain sum and if they are unlucky enough to suffer a misfortune, burglary or injury or whatever, then they get paid out from that common fund.
If that concept is undermined, then there is no point in any insurance of any kind – Devil take the hindmost.

The paper has the nerve to say that having a fixed sum of £400.00, or £425.00, will “protect against under settlement by making claimants aware in advance of the appropriate level of compensation that they are due.”

Please all send me details of the cases where you have settled general damages in a whiplash claim for under £400.00.
The questions in relation to these proposals are:-

“Question 5: Please give your views on whether compensation for pain, suffering and loss of amenity should be removed for minor claims as defined in Part 1 of this consultation?

 

Please explain your reasons.

 

Question 6: Please give your views on whether a fixed sum should be introduced to cover minor claims as defined in Part 1 of this consultation?

 

Please explain your reasons.

 

Question 7: Please give your views on the government’s proposal to fix the amount of compensation for pain, suffering and loss of amenity for minor claims at £400 and at £425 if the claim contains a psychological element.

 

Please explain your reasons.”

“Minor”

 

For the first time a definition has been given of what the Government considered to be “minor” claims.

Again two options are put forward:-

  1. Injury duration of up to and including six months;
  1. Injury duration of up to and including nine months.

Here the Government does express a preference for the six month option.

The Government states that the average amount of compensation at present for an RTA related soft tissue injury of up to and including six months, with or without psychological claims, is around £1,800.00 and in relation to an injury of up to nine months around £2,100.00.

Separately the Government also proposes that all claims with a prognosis period of 12 months or under would automatically transfer to the small claims track, regardless of whether the measure to increase the small claims limit was implemented at the same time. (Paragraph 17).

The definition of soft tissue is the one in paragraph 16(A) of the RTA Portal, that is:-

“A claim brought by an occupant of a motor vehicle where the significant physical injury caused is a soft tissue injury and includes claims where there is a minor psychological injury second in significance to the physical injury.”

Generally it should be noted that as by definition an award of £400.00 or £425.00 is below the current small claims limit, let alone the proposed increased one, such a matter will be a small claim unless special damages bring the total above the ordinary small claims limit, which is currently £10,000.00.

Thus where there is a whiplash injury of up to 6 months duration, the small claims limit is £10,000.00, not £5,000.00.

 

Medical reports

 

One option is that no report can be obtained until six months after the injury, so as to allow the examining doctor to see whether or not there are ongoing problems. If there are then the matter does not come within this particular fixed damages scheme:-

“45. The ‘diagnosis approach’ could be used if the government decided to proceed with the option of removing compensation for PSLA from minor claims. This option would require claimants to wait until the end of the prescribed period (e.g. six months) before obtaining a supporting medical report through the MedCo Portal. An examination at this point would enable the medical expert to assess whether the claimant was still suffering from pain or other symptoms related to injuries sustained in their earlier RTA. The medical report would then be used to decide whether the claimant was entitled only to claim for non-PSLA losses, or was alternatively eligible for the new fixed tariff compensation scheme for more significant injuries.

  1. In order to control costs associated with the claim, only the cost of the six month medical report would be recoverable. If the claimant chose to seek a medical report any earlier than this, the cost of that earlier report would not be recoverable. In addition, the requirement to have a medical examination at a specific point may have a positive impact on the practice of claims being brought at the end of the limitation period.”

The Government then suggests, at paragraph 48, that there would be circumstances in which waiting six months would not be helpful to a claimant but gives no indication as to how a court would judge whether or not it had been reasonable for a claimant to obtain such a report:-

“48. However, there could be circumstances in which waiting six months would not be helpful to a claimant. A requirement for the claimant to pay for an earlier report (if one were needed before six months) could be viewed as disproportionate for claimants seeking necessary rehabilitation or who are unable to work and are seeking payment for loss of earnings given that such a report may in any event be required to evidence the claim for these losses (which remain recoverable). In addition, as well as deterring minor, exaggerated and fraudulent claims, such a requirement could also act as a disincentive for genuinely injured claimants.”

It is very obvious that the Ministry of Justice hopes that if a claimant has to wait six months before doing anything at all, then they will give up and not bother making any claim.

It is a sort of a reverse limitation period.

The Government also considers the prognosis approach, essentially the current process but has this to say:-

“53. The difficulty with this approach arises from the potential for pressure to be applied to inflate prognosis periods to just beyond the period defined as covering ‘minor’ road traffic related soft-tissue injury claims. For example, if the definition of ‘minor’ is set at up to and including six months, there is a question as to how many claims would end up with a prognosis period of seven months, thereby qualifying for compensation under the new tariff system. As noted above, the analysis of management information by MedCo will be an important safeguard in this area. The introduction of a tariff for claims as set out in Part 3 of this consultation document will also be a potential mitigation against such claims inflation.”

Thus the Ministry of Justice’s view is that the judges and the Judicial College have got it all wrong in valuing soft tissue injuries and that the doctors will simply lie and say that the prognosis period is seven months, so as to escape the fixed damages of £400.00/£425.00.

The questions in relation to six months/nine months are at questions 3 and 4:-

Question 3: The government is bringing forward two options to reduce or remove the amount of compensation for pain, suffering and loss of amenity from minor road traffic accident related soft tissue injury claims Should the scope of minor injury be defined as a duration of six months or less?

 

Please explain your reasons, along with any alternative suggestions for defining the scope.

 

Question 4: Alternatively, should the government consider applying these reforms to claims covering nine months’ duration or less?

 

Please explain your reasons along with any alternative suggestions for defining the scope.”

 

The questions in relation to how medical evidence should be obtained are at questions 8 to 10:-

 

“Question 8: If the option to remove compensation for pain, suffering and loss of amenity from minor road traffic accident related soft tissue injury claims is pursued, please give your views on whether the ‘Diagnosis’ approach should be used.

 

Please explain your reasons.

Question 9: If either option to tackle minor claims (see Part 2 of the consultation document) is pursued, please give your views on whether the ‘Prognosis’ approach should be used.

 

Please explain your reasons.

 

Question 10: Would the introduction of the ‘diagnosis’ model help to control the practice of claimants bringing their claim late in the limitation period?

 

Please explain your reasons and if you disagree, provide views on how the issue of late notified claims should be tackled.”

The consultation ends on 6 January 2017.

Please see my related blogs:-

PERSONAL INJURY SMALL CLAIMS LIMIT: CONSULTATION IN DETAIL

ANYWHERE COUNTY COURT 2018: SEND IN THE CLOWNS

Written by kerryunderwood

November 21, 2016 at 6:33 am

Posted in Uncategorized

ANYWHERE COUNTY COURT 2018: SEND IN THE CLOWNS

with 8 comments


Scene: One of the four remaining County Courts. A personal injury small claim hearing is taking place.

 

Judge:  

 

Good morning. Please introduce yourself.

 

Claimant’s Representative:

 

I am Fat Fred from the Dog and Duck.

 

Judge:

 

I have a note from the Ipswich Union Insurance Company saying:-

 

“Do your worst – £400.00. In fact as part of our Corporate Social Responsibility kick throw in the extra £25.00 for the psychological injury – that will get a nice bunch of flowers.”

 

Fat Fred:

 

I want as much as possible as quickly as possible. I am on 60% of damages.

 

Judge:

 

You mean 40% for you and 60% for your client?

 

Fat Fred:

 

I know what I mean. I am a McKenzie Friend. I can do what I want.

 

Judge:

 

I see. The medical evidence is from a Doctor Doolittle Is he here?

 

Fat Fred:

 

Yes, that’s me. I am a McKenzie Doctor – cheaper and I just make the evidence up.

 

Judge:

 

Well I am not sure about anything, so I am not going to make a decision at all – I am going to pretend that today never happened.

 

Fat Fred:

 

But you are a trained and qualified lawyer! It is your job to make a decision.

 

Judge:

 

Me? Trained? Qualified? Lawyer? Whatever gave you that idea?

 

I have no training, no qualifications, no knowledge, no experience, no ethics, no nothing.

 

I am the Lord Chancellor.

 

 

 

 

 

See my blog:-

 

PERSONAL INJURY SMALL CLAIMS LIMIT: CONSULTATION IN DETAIL

Written by kerryunderwood

November 18, 2016 at 10:48 am

Posted in Uncategorized

PERSONAL INJURY SMALL CLAIMS LIMIT: CONSULTATION IN DETAIL

with 20 comments


On 17 November 2016 the Ministry of Justice published its consultation paper – Reforming the Soft Tissue Injury (‘Whiplash’) Claims Process – a disingenuous title as it proposes a five-fold increase in the small claims limit for personal injury cases of all kinds, not just whiplash and not just road traffic.

So if a spanner falls on your head at work this consultation covers that accident, which has nothing whatsoever to do with whiplash or motor insurance premiums.

It also covers credit hire claims and the possibility of a tariff system for injuries.

The consultation is open until 6 January 2017,  that is 50 days, including Christmas and the New Year period.

Including the impact assessment, which for once is lengthy and important, it runs to nearly 200 pages.

I have given the link above and the paper can be accessed there and responded to there.

In view of the length and complexity of the consultation paper I am doing separate blogs in relation to each proposal and in this first one I deal with the small claims limit proposal.

Small Claims Limit

 

The consultation paper proposes increasing the small claims limit for all personal injury cases from £1,000.00 to “at least £5,000.00.” (Paragraph 66, 82 – my bold).

The Executive Summary refers to £5,000.00 but Part 4 – Raising the Small Claims Track Limit for Personal Injury Claims – (pages 24 – 30 of the report) refers to “at least £5,000.00” (paragraph 66, 82), “whether the increase should be to £5,000.00 or higher.” (Paragraph 87, 94) and paragraph 97 reads:-

“97. The level for the small claims limit for PI claims relates only to the PSLA element of the claim and not to the total value of the claim. Consistent with this, it is intended that the increase should apply only to the PSLA element of the claim. In considering the level of the increase, and to build in an element of future proofing, the government has considered whether the limit should be raised further, for example to £7,500 or even to £10,000, given that the limit for all other claims is £10,000. However, the government has decided that an increase to £5,000 is a proportionate response to the issues identified at this stage, and the accompanying impact assessment uses this figure. We would, however, welcome views from stakeholders on whether the small claims limit should be increased beyond £5,000, and, if so, to what level.”

Question 14 of the consultation, which follows paragraph 97 reads:-

“Question 14: The small claims track limit for personal injury claims has not been raised for 25 years. The limit will therefore be raised to include claims with a pain, suffering and loss of amenity element worth up to £5,000. We would, however, welcome views from stakeholders on whether, why and to what level the small claims limit for personal injury claims should be increased to beyond £5,000?”

 

The Government says that it is “not minded” to limit the small claims rise to RTA claims only (paragraph 93), although question 13 states:-

“Question 13: Should the small claims track limit be raised for all personal injury or limited to road traffic accident cases only?”

 

The Ministry of Justice state, correctly, that neither the issue of raising the personal injury small claims limit, nor the types of personal injury claim that such increase will apply to, require primary legislation, that is they can be dealt with by way of a statutory instrument amending the Civil Procedure Rules.

Paragraph 86 reads:-

“Increasing the small claims limit for PI claims does not require primary legislation and can be achieved through changes to the Civil Procedure Rules. Supporting changes will also be required to allow for the recoverability of the fixed cost of a MedCo accredited medical report by the claimant and to ensure that all claims are supported by such a medical report.”

This will involve a major change in the culture of the Small Claims Court where generally expert evidence is not allowed.

Overall the consultation paper is very confused and confusing as to whether litigants in an increased small claims limit will require assistance.
The general tone of the paper is that they do not and yet paragraph 103 reads:-

“The government is considering the issue of the potential for claims management companies (CMC) and paid McKenzie Friends21 to re-enter the PI market in response to these reforms in general, and the increase in the small claims limit in particular. These types of organisation can offer services to claimants whilst operating with lower overheads than many PI lawyers. During the last consultation on this issue, a CMC trade association wrote to the government to argue that this would happen if the small claims limit were increased. We are interested in respondents’ views in relation to whether or not this would be helpful in providing support to otherwise unrepresented litigants.”

Questions 15 and 16, grouped together in the consultation paper, read:-

“Question 15: Please provide your views on any suggested improvements that could be made to provide further help to litigants in person using the Small Claims Track.

 

Question 16: Do you think any specific measures should be put in place in relation to claims management companies and paid McKenzie Friends operating in the PI sector?

Please explain your reasons why.”

 

Thus the Government is specifically considering replacing lawyers in personal injury small claims with paid McKenzie Friends and with claims management companies.

How on earth that will reduce, rather than significantly increase, fraudulent claims is beyond me and the issue is not even raised in the consultation paper.

A reminder that the consultation closes on 6 January 2017 at 5.30pm.

Written by kerryunderwood

November 18, 2016 at 8:11 am

Posted in Uncategorized

WHAT FIXED COSTS ARE PAYABLE WHEN AT ALLOCATION A MATTER IS LISTED FOR TRIAL?

leave a comment »


I deal with this subject in detail in my forthcoming book – Personal Injury Small Claims, Portals and Fixed Costs available here.

 

Recently I considered the issue of the correct level of fixed costs when a matter is listed for a disposal hearing, following the decision of the Court of Appeal in Bird v Acorn – see my post – DISPOSAL HEARINGS: KEY COURT OF APPEAL DECISION.

 

What fixed costs are payable where, on allocation, or shortly after, the court gives directions through to trial, including listing the matter for trial and giving a trial date?

 

Thus the matter moves from being in the first post-issue stage of   Issued – Post-Issue Pre-Allocation straight through to the third stage of IssuedPost-Listing Pre-Trial without ever being in the second stage of Issued – PostAllocation Pre-Listing.

 

Thus on the face of it the defendant loses the chance of settling the claim in that second phase as the matter has already been listed for trial.

 

It makes a significant difference in costs:

 

RTA                 £775

EL                     £930 plus 5% of damages

PL                     £725 plus 5% of damages

 

It also obviously makes the jump between costs on a case settled pre-allocation and one settled post allocation much greater. The figures become:

 

RTA                 £1,495

EL                    £1,950 plus 10% of damages

PL                    £1,340 plus 10% of damages

 

A number of courts are following this procedure, and indeed it makes perfect sense.

 

It has been suggested that the pre-trial checklist could be used as the trigger point for the third and final phase of pre-trial costs and that prior to that it will be in the second phase.

 

I do not think that that is correct – if the matter has been listed then it is post-listing, whether or not a pre-trial checklist has been done.

 

In any event many courts are dispensing with pre-trial checklists.

 

In Bird v Acorn Ltd [2016] EWCA Civ 1096

 

the Court of Appeal held that listing a case for a disposal hearing is a listing for trial thus triggering third stage costs – that is issue – post-listing pre-trial.

 

It seems to me that if a matter is actually listed for trial on allocation then it does indeed move straight through to third stage higher costs.

 

Clearly the matter has been allocated and therefore the first post-issue stage is out of the way – that is the issue – post-issue pre-allocation stage.

 

Logically it cannot be issued – post-allocation pre-listing as it has been listed.

 

Thus I am satisfied that where, on allocation, or shortly after, the court gives directions through to trial, including listing the matter for trial and giving a trial date then column 3 costs are engaged, that is the highest level of pre-trial costs.

 

The principle here is important anyway, but will have much greater importance as and when Fixed Recoverable Costs spread to other types of civil litigation and to much higher value claims.

 

Please see my blog:-

 

JACKSON LJ TO REVIEW FIXED RECOVERABLE COSTS

Written by kerryunderwood

November 17, 2016 at 6:43 am

Posted in Uncategorized

FIXED COSTS DO NOT APPLY TO ALL EX-PORTAL CLAIMS: QADER OVERTURNED: PARLIAMENT IGNORED

with 18 comments


In Qader & Others v Esure Ltd & Khan v McGee [2016] EWCA Civ 1109, 16 November 2016

 

the Court of Appeal held that the Fixed Recoverable Costs Regime does not apply to a claim started in the RTA Portal, which subsequently exited the portal and was allocated to the multi-track after proceedings were issued under Part 7 of the Civil Procedure Rules.

 

The result may be just, but the Court of Appeal accepted that to achieve that result it needed to add in words to the Civil Procedure Rules, even though there was no irrationality in the wording and no irrationality or inherent unfairness in giving effect to that clear wording.

 

The lead, and only judgment, was given by Lord Justice Briggs, author of the extremely controversial report proposing to abolish court hearings for most claims under £25,000. Here, as a judge, he re-writes the law passed by Parliament, to reflect what he thinks was the minister’s and the Government’s – not Parliament’s mind – intention.

 

Whatever view you take this decision has enormous constitutional implications. The full contribution of Lords Justice Gross and Tomlinson sitting on this appeal were:  “ I agree”.

 

Well, I disagree, but I am bothering to explain why.

 

The Court of Appeal recognized that it could re-write what is secondary legislation if it is in conflict with the Human Rights Act, as Parliament has given it that power in the Human Rights Act itself.

 

Clearly restricting a winning party to fixed costs where they have incurred significant costs is a potential breach of the European Convention on Human Rights, scheduled to the Human Rights Act as it could constitute breach of, among other things the right to a fair trial under Article 6.

 

To go down that legitimate route would of course have called in to question the whole issue of fixed costs, no costs, QOCS, small claims etc. – so they bottled it.

 

The decision is a constitutional outrage, and I deal with that further below. But most of you will want first, or only, to know the effect on your personal injury cases, so here it is.

 

The Court of Appeal set out the problem in the first paragraph of the judgment:-

 

“The issue turns mainly on the interpretation of section IIIA of CPR Part 45, read together with the relevant provisions of the RTA Protocol, and against the background of the process of consultation which preceded the making of that section in 2013, by way of implementation of fixed costs proposals in the reports of Jackson LJ in his Review of Civil Litigation Costs. It requires the court not merely to interpret the relevant provisions, but to consider whether they suffer from an obvious drafting mistake which can be put right so as to bring them into compatibility with the intention of the relevant legislator, namely the Civil Procedure Rule Committee, pursuant to the court’s exceptional jurisdiction to do so as explained by Lord Nicholls in Inco Europe Limited v First Choice Distribution [2000] 1 WLR 586, at 592.”
At paragraph 8 of the judgment the Court of Appeal made it clear that although this judgment concerns cases started within the RTA Portal “it is likely that that outcome will affect the interpretation and application of the similar and indeed overlapping provisions in Part 45 about the EL/PL Protocol.”

 

At paragraph 9 the court said:-

 

“Viewed as a whole, at first sight section IIIA appears to make comprehensive provision for the recovery only of fixed costs in all cases which start but no longer continue under either of the relevant Protocols, subject only to expressly stated exceptions.”

 

The only stated exception is disease claims – see CPR 45.29A(2).

 

The court recognised that claims allocated to the multi-track would involve higher, and often much higher expenditure of costs than claims resolved in the fast-track.

 

“Just as personal injury claims for less than £1,000 are inappropriate for the Protocols, so are claims for more than £25,000, so that there is an initial apparent symmetry between the scope of the Protocols and the fast track, in terms of the amount claimed.” (Paragraph 15 of the judgment).

 

The Court of Appeal then looked at three situations where an ex-portal matter was likely to be allocated to the multi-track:-

 

  • where it is revalued at a substantially higher level than the upper portal limit of £25,000.00;

 

  • where vehicle-related damages, excluded for portal purposes from the calculation of the upper limit, means that the claim is a substantial one;

 

  • as here where there is an allegation of fraud.

 

The second example is an interesting one as that envisages a claim worth say £75,000.00 being suitable for the portal process, but not the fast track, which is a curious conclusion.

 

The court recognised that the wording of the rules means that fixed costs apply to all ex-portal claims:-

 

“On the contrary, the language of Part 45.29A and B, taken together, appears unambiguously to apply the fixed costs regime to all cases which start within the relevant Protocols but no longer continue under them.”

 

The Court of Appeal recognised the existence of the escape provision in CPR 45.29J.

 

Nevertheless the Court of Appeal held that fixed costs should be “automatically dis-applied in any case allocated to the multi-track, without the requirement for the claimant to have recourse to Part 45.29J.” (Paragraph 35).

 

The court made the point that to achieve the escape under CPR 45.29J the claimant has to show exceptional circumstances.

 

Thus the law now is that any case allocated to the multi-track for any reason takes the case out of Fixed Recoverable Costs.

 

The Court of Appeal here accepted that the clear wording of the rules, and indeed the judgments of the two lower courts, where not “irrational or, on its face, one which could not possibly have been intended, so as to compel the court to some other conclusion, even though it would, subject to relief under Part 45.29J, lead potentially, albeit only until the end of the trial, to rough justice for some claimants.” (Paragraph 35(c) of the judgment).

 

Thus the Court of Appeal here, following no canons of construction known to me, have, apparently for policy reasons, altered the wording of the Civil Procedure Rules which have been approved by Parliament by way of a statutory instrument.

 

Traditionally courts could never have recourse to anything discussed in Parliament, but had to look at the wording of legislation as passed by Parliament and without considering any background material. That rule was changed by the case of Pepper v Hart [1992] UKHL 3 which held that in certain exceptional circumstances Hansard, the official record of the proceedings of Parliament, could be referred to in order to assist in the interpretation of Parliamentary legislation.

 

This decision extends that principle enormously with the Court of Appeal taking the view that it is able to consider the process of consultation which proceeded the Civil Procedure Rules which “demonstrate that it was not in fact the intention of those legislating for this regime in 2013 that it should ever apply to a case allocated to the multi-track.” (Paragraph 35(d) of the judgment).

 

The Court of Appeal went on to say:-

 

“A conclusion that it should so apply is a result which can only have arisen from a drafting mistake, which the court has power to put right by way of interpretation even if, as here, it requires the addition of words, rather than giving the words actually used a meaning different from their natural and ordinary meaning. It should normally be possible to understand procedure rules just by reading them in their context, but this is a rare case where something has gone wrong, and where the court’s interpretative powers must be used, as far as possible, to bring the language into accord with what it is confident was the underlying intention.”

 

This is very dangerous territory. If a court is free at any time to change the wording of laws to reflect “the intention of those legislating” then where does it stop?

 

Members of Parliament voting for a particular provision may have very different intentions. For example Michael Foot and Enoch Powell joined together to defeat the Reform of the House of Lords because Enoch Powell wanted it to stay exactly as it was and Michael Foot wanted it scrapped altogether.

 

How would a court interpret those totally different intentions?

 

The key in any legislation is the wording as passed by Parliament. To start looking at “the intention of those legislating” gives the court virtually unfettered power to rewrite laws as it wants. It should also be remembered that the Rules Committee did allow for an escape– that is what CPR 45.29J is all about and therefore there is an existing mechanism to avoid injustice to claimants.

 

The Court of Appeal went on to say at paragraph 43:-

 

“But for what I am about to describe about the background to the making section IIIA of Part 45, it could not be said that it would have been irrational for the Rule Committee to have gone down the more rigorous route of making fixed costs applicable to all cases coming out of the relevant Protocols, leaving the combination of Part 45.29J and Part 36 to make appropriate provision, where necessary, for cases allocated to the multi-track. Looking simply and objectively at the CPR, that would appear to have been what the Rules Committee intended.”
To justify rewriting the clear wording of the Civil Procedure Rules, and the clear intention, the Court of Appeal then looked at what it called “the history of the making of this fixed costs scheme”.

 

It had this to say:-

 

“44. It is however clear that this rigorous approach is not what the Rule Committee actually intended. The original impetus for what became the fixed costs scheme for RTA and EL/PL Protocol cases came from Jackson LJ’s reports. At appendix 5 to his December 2009 Final Report is to be found a composite table (“table B”) of fixed costs for RTA, EL and PL cases which, although the amounts recoverable are different, has a structure which was eventually adopted almost precisely in Tables 6B, 6C and 6D in section IIIA of Part 45. His appendix is entitled “Fixed costs matrix for fast track personal injury claims”.

 

  1. In March 2011 the Ministry of Justice published a consultation paper headed “Solving disputes in the County Courts: creating a simpler, quicker and more proportionate system”. At paragraphs 57 to 59 it noted Jackson LJ’s proposals for a regime of fixed recoverable costs for personal injury cases in the fast track. At paragraph 83 it noted that Jackson LJ’s fast track proposals could be used for cases which left the RTA Protocol process, for example where liability was not admitted. Paragraph 60 made express reference to the fixed costs table B in appendix 5 to Jackson LJ’s final report.

 

  1. In February 2012 the Ministry of Justice published the Government’s response to that consultation. At paragraph 15 it announced its intention to increase the financial limit of the RTA Protocol to £25,000. At paragraph 20 it announced the Government’s intention to extend the system of fixed recoverable costs, subject to further discussions with stakeholders, in a way similar to that proposed by Jackson LJ in his review.

 

  1. In a consultation letter dated 19 November 2012 Helen Grant MP, the Parliamentary Under-Secretary of State for Justice, notified stakeholders of the Government’s intention to introduce a matrix of fixed recoverable costs which would apply to RTA, EL and PL claims which “exit the Protocol process” based on Jackson LJ’s table B (in appendix 5 to his Final Report), but amended to take account of inflation since the table was produced in 2009, and reduced throughout by an amount intended to reflect the forthcoming ban on referral fees. She attached as Annexe B to her letter a tabular form of her proposals, modelled on Jackson LJ’s template and containing, for the most part, precisely the amounts now set out in Table 6B for RTA Protocol cases. She sought further views and evidence on (among other things):

 

“The interface between proposed FRC arrangements within and outside the Protocols, particularly with regard to incentives for either side to exit.”

 

  1. In a further response to consultation dated 27 February 2013 the Ministry of Justice stated, at paragraph 6, that it was the Government’s intention to ask the Rule Committee to make rules which would fix recoverable costs in low-value personal injury cases at the level set in Annexe A. Annexe A continued to adopt the structure of Jackson LJ’s table B, with amounts which in all respects, save for slightly different trial advocacy fees, were later included in Table 6B for RTA Protocol cases.

 

  1. Paragraph 87 of that response stated as follows:

“Respondents were unclear as to whether the proposals are intended to apply to multi-track, as well as fast track, cases between £10,001 and £25,000. There was a clear view (whilst still arguing the proposed levels of FRCSs were too low in any event) that any proposals should only apply to fast track cases. It has always been the Government’s intention that these proposals apply only to cases in the fast track and if a case falling out of the protocols is judicially determined to be suitable for multi-track, normal multi-track costs rules will apply”.”

 

So the Court of Appeal now thinks it acceptable to take into account consultations, results of those consultations, ministerial letters etc.

 

On that basis virtually any piece of legislation could be reworded in any way the court wants at any time.

 

The Court of Appeal justifies its decision by saying “there is no evidence that the government ordered its policy in relation to multi-track cases falling outside the fixed costs regime…”

 

Legislation is that which is passed by Parliament. It is not necessarily Government policy. Parliament is a check on the Government.

 

More worryingly the Court of Appeal said:-
“Furthermore it is plain that the fixed amounts recoverable were all based upon a table originally proposed by Jackson LJ and then amended after consultation, specifically chosen for fast track cases.”

 

So the Judiciary commission  a report from Lord Justice Jackson and then amend the wording of the Civil Procedure Rules so that the law is as Lord Justice Jackson recommended, and not as passed by Parliament.

 

It may well be that here the outcome is sensible and just. That is not the point. Parliament makes the laws and the courts interpret them.

 

In other cases, any other approach could lead to very dangerous results indeed.

 

The Court of Appeal here unequivocally add words to the Civil Procedure Rules. At paragraph 56 the court says:-

 

“The best way to give effect to that intention seems to me to be to add this phrase to Part 45.29B, after the reference to 45.29J:

 

“…and for so long as the claim is not allocated to the multi-track…””

 

The £25,000.00 limit

 

The Court of Appeal discussed this at some length – that is the fact that Part A of Table B has a reference to an upper damages ceiling of £25,000.00 and thus it remains unclear as to whether a claim which is for over £25,000.00, and where it is determined by settlement or judgment, but which is in the fast-track is subject to Fixed Recoverable Costs or not.

 

The Court of Appeal had this to say:-

 

“I recognise also that my proposed insertion of words to Part 45.29B does nothing about the anomaly represented by the £25,000 apparent damages ceiling in part A of Table 6B. It is unnecessary in the context of these appeals to do so, both because neither of them reached settlement prior to the issuing of Part 7 proceedings, and because the damages claimed are well below £25,000. It is a continuing anomaly which, in my view, the Rule Committee should be invited to consider at the earliest available opportunity. It may also be minded to devise an amendment to section IIIA of Part 45 which fully reflects the concerns which underlie this judgment, not merely in relation to the RTA Protocol, but to the EL/PL Protocol as well.”

 

The irony of this is that Lord Justice Jackson has himself proposed that fixed costs should apply to the lower reaches of the multi-track and so it is strongly arguable that the Rules Committee have drafted the rules in accordance with Lord Justice Jackson’s intentions.

 

All of the talk about more work in the multi-track etc. making it unsuitable for a fixed costs regime is going to look a bit weak next July when Lord Justice Jackson proposes a massive extension of fixed costs, to include a huge number of multi-track claims.

 

 

Written by kerryunderwood

November 16, 2016 at 2:18 pm

Posted in Uncategorized

COSTS ALLOWED FOR INTER-FEE EARNER DISCUSSIONS & SUPERVISION OF PARALEGALS

with 2 comments


In TUI UK Ltd v Tickell & Others [2016] EWHC 2741 (QB)

 

the Queen’s Bench Division of the High Court was hearing an appeal against an assessment of costs made by a High Court Master.

 

Although the case contains no new points of law it does contain some interesting findings on costs for discussion between fee earners and costs of supervising paralegals.

 

Inter-fee earner discussions

 

The claimants’ solicitors claimed for time spent by fee earners discussing the matters and the defendant, the paying party, said that no such discussions were necessary and all of these costs should be disallowed.

 

The Master disagreed, and so did the High Court on appeal.

 

This was an action involving 205 claimants who had suffered illness on a cruise and the awards broadly ranged from £500.00 to £1,500.00 in each case.

 

The average time worked out at 40 minutes per claimant per year for inter-fee earner time, taking into account that the time was doubled up as one person was talking to another.

 

The High Court said this about the Master’s decision:-

 

“Having spent three days looking at the bills he said that it was quite clear to him that the vast majority of the work had been done by paralegals. It was unrealistic to say there should have been no inter-fee earner discussions. Quite clearly there had to be discussions between the relevant fee earners who were doing different jobs in the litigation. He accepted Mr Mallalieu’s submission that there had been a proper team approach. Where possible the work had been pushed down to the lowest grade of fee earner.”

 

“It was a well-run and well-documented piece of litigation”, the Master continued.

 

The High Court said:-

 

“It is quite clear from the context and from the Master’s acceptance of Mr Mallalieu’s submissions that the Master was referring to the work on the case as a whole, and quite clear that he was right to say that that work had been done by the lowest level of fee earner possible.

 

“I agree with the Master that, in principle, if, as here, much of the work on files was being done by paralegals under the supervision of legal executives, it was necessary, from time to time, to have discussions between fee earners, specifically supervising solicitors, including partners. In the course of this short ruling the Master referred twice, correctly, to the test he had to apply. “

 

Comment

 

An excellent judgment which brings home the point that having paralegals who require supervision working on a case is not necessarily much cheaper than having an expert lawyer who can see the issues very quickly.

 

Unfortunately some paying parties want it both ways – that is paralegals dealing with a case but no costs allowed for supervision and discussions etc.

 

This case puts that argument to bed once and for all.

 

Fixed Recoverable Costs will soon be with us for almost everything – see my post:

 

One of the key decisions for law firms is whether it is more profitable to have lower paid paralegals who take more time and require supervision, or senior lawyers who cost more but can spot and deal with the issues more quickly.

 

The judgment is worth reading for the other, frankly ludicrous, points of dispute raised by the paying party, all dismissed by the Master and all dismissed on appeal.

 

 

Written by kerryunderwood

November 16, 2016 at 6:45 am

Posted in Uncategorized

INSURERS: BREACH OF WARRANTY BY CLAIMANT SOLICITORS & REQUEST FOR INFORMATION

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In many posts I have criticised the conduct of insurance companies in personal injury work in writing direct to clients, after solicitors have contacted the insurance company, asking those clients if they have in fact instructed those solicitors and offering to settle the matter direct.

 

I stand by those criticisms insofar as insurers are offering to settle the matter direct, but it is clear from the number and range of those acting for defendants who have contacted me that there are many instances of solicitors writing to insurers when they have not been instructed.

 

This seems normally to happen because of dubious relationships between some claimant solicitors and referrers.

 

One of my own clients showed me a letter from a firm of a personal injury solicitors purporting to act for my client when my client had never heard of them, let alone met them or spoke to them. My client’s son worked for my firm as an assistant solicitor.

 

I have today posted a blog – SOLICITOR’S BREACH OF WARRANTY: IMPORTANT CASE FOR INSURERS – which examines the decision in Zoya Ltd v Ahmed T/A Property Mart & Others [2016] EWHC 2249 (Ch).

 

This is a reminder that if this happens the insurance company can sue the solicitor personally for breach of warranty, that is for wrongfully warranting that they act for the client.

 

The usual measure of damages is the costs incurred in dealing with such a case, but the court has power to award aggravated damages and in a case where the breach of warranty arises from systematic breach of the rules by obtaining cases from a referrer without contacting the client, then aggravated damages could, and should in my view, be awarded.

 

The solicitor is also potentially liable for wasted costs under Section 51 of the Senior Courts Act 1981 and under Section 67(2) of the Criminal Justice and Courts Act 2015 where the court makes a wasted costs order it must inform the approved regulator.

 

As well as giving this advice this post is a plea to insurance companies, compensators and those acting for them to let me have information about any cases where claimant solicitors have written to insurers claiming to act when in fact they have not been instructed.

 

This can be on a confidential basis, or with the view to me writing about specific cases.

 

It is in the interests of all decent solicitors and insurers, and the vast majority are, to clean up the personal injury stable and those solicitors who wrongly claim to be acting for a party deserve to have the book thrown at them.

 

So help please!

 

I can be contacted by email on kerry.underwood@lawabroad.co.uk or 01442 430 900, or you can post a reply to this blog.

 

Please see my related blog:-

 

SOLICITOR’S BREACH OF WARRANTY: IMPORTANT CASE FOR INSURERS

Written by kerryunderwood

November 15, 2016 at 7:35 am

Posted in Uncategorized

SOLICITOR’S BREACH OF WARRANTY: IMPORTANT CASE FOR INSURERS

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In Zoya Ltd v Ahmed T/A Property Mart & Others [2016] EWHC 2249 (Ch)

 

the Chancery Division of the High Court refused the defendant’s application that the claimant’s solicitors should pay their costs on the basis of breach of warranty or authority to act for the claimant. The court suggested that it will often be more appropriate to order the unauthorised instructor to pay the costs.

 

Here the solicitors issued proceedings in the name of Zoya Ltd on instructions from Mr Haastrup, who claimed to be Zoya’s sole director and shareholder.

 

The defendant disputed his authority to act on Zoya’s behalf and at a preliminary hearing the court found that Mr Haastrup was not validly appointed as a director of Zoya Ltd and had no authority to instruct solicitors on its behalf.

 

The claim was subsequently struck out and a third party costs order made against Mr Haastrup.

 

The defendant sought a wasted costs order against the solicitors, who accepted that by issuing proceedings they were giving a warranty of authority.

 

The court held that until the preliminary hearing the solicitors warranted that they were representing Zoya Ltd, but thereafter they did not.

 

The court held that the defendant was unable to recover from the solicitors the costs of the preliminary issue as the defendant had failed to establish that the warranty had induced him to act to his prejudice as required by Yonge v Toynbee [1910] 1 KB 215.

 

As the defendant had from the outset contended that the solicitors lacked authority to act for Zoya Ltd they had not been induced to do anything.

 

The wasted costs application against the solicitors was rejected. Two categories of conduct were relied upon, one of which was the breach of warranty issue dealt with above.

 

The other was the filing of a witness statement by Mr Haastrup on the eve of trial containing what was described as inflammatory, false and irrelevant allegations.

 

The court had this to say about that:-

 

“11. So far as the witness statement is concerned it is my view that the evidence was wholly irrelevant to the issues before the court, was insufficiently substantiated and was expressed in unnecessarily tendentious terms. I am also satisfied that the Solicitors should not have permitted that evidence to be adduced, because it was obviously irrelevant and was not adduced in a manner which could possibly have assisted the court. However, I am not satisfied that this means that any act or omission of the Solicitors did in fact cause any additional costs to be incurred, and consider that it is most improbable that it did. For that reason I concluded that the first category of conduct did not justify the relief sought.”

 

This reflects the fact that a party seeking a wasted costs order must prove that the costs were incurred as a result of improper, unreasonable or negligent act or omission on the part of the lawyer – see section 51(7) of the Senior Courts Act 1981.

 

In relation to the breach of warranty, that alone could entitle the party to recover costs, even in the absence of a wasted costs order.

 

The applicant also made an application for a wasted costs order against the solicitors on the ground that they had failed to make proper enquiries as to the authority of John Haastrup to give instructions in the name of Zoya and that conduct alone, apart from being a breach of warranty, constituted conduct which could be shown to be improper, unreasonable or negligent such as to satisfy the requirements of Section 51(7)(a) of the 1981 Act.

 

The court had this to say about that point:-

 

“13. I confess that I hesitated on this point, In the end, however, I was not satisfied that the Solicitors’ reliance on the instructions which they received from John Haastrup, combined with the documentation that he produced, including most particularly a copy of the Certificate (as described in paragraph 35 of the July Judgment) and a Letter of Authority dated 21 July 2014, was sufficiently clearly conduct that amounted to an improper, unreasonable or negligent act within the meaning of section 51 (7)(a). I was also concerned by the fact that a partner in the Solicitors, Mrs Isi Inyang, gave evidence that John Haastrup had refused to waive privilege in relation to the instructions he gave them regarding his authority to act for Zoya. This is a fault-based jurisdiction, and in the context of the summary approach that I am invited to take, I do not consider that Mr Ahmed has established with sufficient clarity that the Solicitors were guilty of conduct, which justifies the grant of the relief sought.”

 

The applicant had submitted that it was a matter of strict liability, that is that the solicitors are liable notwithstanding the state of their knowledge as to their authority as set out in Richmond v Branson & Son [1914] 1 Ch 968, 974.  

 

Another example of this jurisdiction being exercised was Warner v. Merriman White [2008] EWHC 1129 (Ch).

 

The remedy for breach of the warranty is damages, which will normally be the costs thrown away in the action, which has been described by the courts as being an obligation “to pay the costs of the party misled.”

 

In Adams v. Ford [2012] 1 WLR 3211 the court identified the nature of the recoverable loss  as follows :

 

“ a solicitor who acts in litigation without authority to act on behalf of the supposed client is responsible for the costs thereby incurred by the other party.”

 

Comment

 

This case shows the difficulties in obtaining wasted costs orders, but is also a reminder that a solicitor can be responsible for costs in circumstances other than having a wasted costs order made against them.

 

This case has significance in relation to personal injury work, where it is common for insurers to ask solicitors to confirm they are acting for the client, or to ask the client if the solicitor is in fact acting for them.

 

This conduct brings howls of protest from claimant solicitors, including me, but insurers say that due to the dodgy arrangements between solicitors and referrers and others it is common for solicitors to purport to represent clients who they have never met or spoken to and in circumstances where they have no authority to act.

 

I must admit that one of my own clients showed me a letter from a firm of personal injury solicitors purporting to act for my client when my client had never heard of them, let alone met them or spoke to them.

 

In such circumstances the defendant, realistically the insurance company, will have a cast iron case for an action against the solicitors for breach of warranty, as well as a wasted costs application.

 

This is of particular significance in personal injury work, where, due to Qualified One-Way Costs Shifting, defendants generally will not recover costs even if successful.

 

Please see my related blog:-

 

INSURERS – BREACH OF WARRANTY BY CLAIMANT SOLICITORS & REQUEST FOR INFORMATION

Written by kerryunderwood

November 15, 2016 at 7:34 am

Posted in Uncategorized

PROPORTIONALITY AND REASONABLENESS: ANOTHER JUDGE ALL OVER THE PLACE

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In Agents’ Mutual Limited v Gascoigne Halman Ltd [2016] CAT 21

 

the Competition Appeal Tribunal held that when considering whether to approve the phases in a costs budget, the tribunal should approach those costs on the assumption that eventually there would be an assessment on the standard basis and therefore proportionality should be taken into account at the budget stage.
The tribunal said that that was reinforced by the fact that Precedent H now requires the solicitor to certify that the budget “is a fair and accurate statement of the incurred and estimated costs which it would be reasonable and proportionate for my client to incur in this litigation” (judge’s emphasis).

 

It follows that costs that could be reasonably and necessarily incurred can still be removed at the budget stage as being potentially disproportionate.

 

Having said that the court here still fell into the same trap as very many courts of conflating reasonableness and proportionality.

For example at paragraph 14 the judge refers to the total of £300,000.00 for preparing Witness Statements as “unreasonable and disproportionate”. The judge then goes on to say that much of the work should be done by an assistant solicitor rather than a partner, with the assistant solicitor’s charging rate being significantly lower.

 

The court said:-

 

“I think it is reasonable to expect that a much greater share of the work would be undertaken by more junior lawyers, subject only to review by the partners.”

 

That is a “reasonable and necessary” test which has always applied and has nothing to do with proportionality.
The judge then goes on to say:-

 

“Taking a broad view, I consider a reasonable and proportionate sum under this head is £200,000.”

 

The problem with that is that it is impossible to tell from that paragraph, and the judgment generally, as to what the court is allowing as reasonable and necessary, or rather disallowing as unreasonable and unnecessary, and what the court is then deducting on proportionality grounds.

 

The judgment continues in similar vein. For example at paragraph 18 there is reference to the costs of an expert as being “unreasonable and wholly disproportionate”. Again what the judge should have done is to determine a reasonable figure and then, if appropriate, have made a further, specific reduction on the grounds of proportionality.

 

The judge also seems to have been heavily influenced by comparing the respective budgets of the parties. Such an approach must be taken with great caution. A party that thinks it may lose has an incentive to put in a relatively low budget. A party that thinks it will lose and plans to make a Part 36 offer has every incentive to put in a high future budget so as to put greater pressure on the recipient of the Part 36 offer.

 

I am not saying that comparing budgets is never appropriate, but it requires far greater thought and consideration than appears to have been given to the exercise by this judge in this case.

 

The judgment does provide an interesting example of attribution of costs to each phase as set out below.

 

Appendix

                                                          A                                        B                                        C

         
Witness Statements 53,194 246,625 146,806 200,000
Expert reports 153,933 163,200 86,067 240,000
PTR 105,725 40,000 40,000
Trial preparation 98,175 80,000 80,000
Trial 842,195 550,000 550,000
ADR 237 19,525 19,762 19,762
TOTALS 207,364 1,475,445 922,635 1,129,762

 

 

 

Written by kerryunderwood

November 14, 2016 at 7:59 am

Posted in Uncategorized

JACKSON LJ TO REVIEW FIXED RECOVERABLE COSTS

with 4 comments


On 11 November 2016 the Judicial Office announced that Lord Justice Jackson has been commissioned to undertake a review of Fixed Recoverable Costs, such review to be completed by 31 July 2017.

The review has been commissioned by the Lord Chief Justice and the Master of the Rolls and the review’s recommendations will be followed by a Government Public Consultation on proposed reforms to extend Fixed Recoverable Costs to further areas of civil litigation.

The terms of reference for the review are:-

  1. To develop proposals for extending the present civil fixed recoverable costs regime in England and Wales so as to make the costs of going to court more certain, transparent and proportionate for litigants.
  1. To consider the types and areas of litigation in which such costs should be extended, and the value of claims to which such a regime should apply.

Lord Justice Jackson has invited written evidence or submissions to assist the review to be sent to him by Monday 23 January 2017 at fixed.costs@judiciary.gsi.gov.uk.

This has been agreed with the Government.

Lord Justice Jackson said:-

“I have set out my present views on the principles of fixed recoverable costs in the final report of my review and in recent lectures and publications.

“I have been commissioned to undertake this review because it is integral to the overall package of reforms which I originally proposed.  Chapter 16 of my final report recommended that serious consideration should be given to extending fixed recoverable costs to the lower reaches of the multi-track after the other reforms had bedded in.

“Although the momentum is heavily for reform, the review will provide ample opportunity for comments and submissions on the form and scope that reform should take.  I am inviting the views of practitioners, users of the civil courts and any other interested parties on these points. Seminars will be held in London and elsewhere to discuss the issues.  There is a great deal to be done on the detail of the review, which will inform the Government as it prepares proposals for formal consultation in due course.”

Evidence submitted should take into account the concept of proportionality as set out in the Civil Procedure Rules, and in particular the factors set out in CPR 44.3(5).

Views are also sought on the level of claim which Fixed Recoverable Costs should stop and costs budgetting should apply instead.

Views are also sought on whether claimant’s costs and defendant’s costs should be different.

Suggestions are also invited as to how to accommodate counsel’s fees, expert’s fees and other disbursements within a Fixed Recoverable Costs Regime.

For Lord Justice Jackson’s recent lectures on Fixed Recoverable Costs see Fixed Costs – The Time Has Come and The future for civil litigation and the fixed costs regime.

Comment

 

I fully support the extention of Fixed Recoverable Costs and back Lord Justice Jackson 100% on this one.

Lord Justice Jackson: be bold. Extend Fixed Recoverable Costs to every civil case of every kind without financial limit.

Please see my related blog:-

DISPOSAL HEARINGS: TODAY’S KEY COURT OF APPEAL DECISION

Written by kerryunderwood

November 11, 2016 at 2:34 pm

Posted in Uncategorized

DISPOSAL HEARINGS: KEY COURT OF APPEAL DECISION

with 9 comments


In Bird v Acorn Group Ltd [2016] EWCA Civ 1096, judgment delivered on 11 November 2016, the Court of Appeal, in a ruling of enormous importance, has held that where a disposal hearing takes place then the full, highest level of pre-trial fixed costs are payable.

Table 6B Part B lists the three stages within which the settlement can be reached:-

–              on or after the date of issue, but prior to the date of allocation under Part 26;

–              on or after the date of allocation under Part 26, but prior to the date of listing;

–              on or after the date of listing but prior the date of trial.

The issue has been which stage should apply when a matter has been listed for a disposal hearing but has not been allocated to a track and settles before that hearing, or at the hearing.

Clearly it can be argued that that is on or after the date of issue, but prior to the date of allocation under Part 26 and therefore the fixed costs should be the stage 1 costs of £1,160.00 plus 20% of damages.

Equally it can be argued that if a matter has been given a date for the disposal hearing then it is in stage 3, that is “on or after the date of listing but prior to the date of trial”. In that the case the fees payable are £2,655.00 plus 20% of damages.
Thus the difference in each road traffic accident matter is £1,495.00 plus VAT, that is £1,794.00 including VAT.

The principles apply in relation to employers’ liability and public liability cases, as well as road traffic accident cases and will also apply to any other type of work where fixed costs are introduced, for example clinical negligence.

However numerically road traffic accidents dominate and in the four months between 1 May 2016 and 31 August 2016, 270,306 matters were issued on the RTA Portal, giving a projected annual figure for 2016/17 of 810,918 RTA Portal claims, and therefore potentially Fixed Recoverable Costs claims.

Not only is this decision a huge boost for claimants and their solicitors, but it is also indicative of a recent trend in decisions of the Supreme Court and the Court of Appeal, which, depending on your viewpoint, have been pro-claimant or redressing the balance.

As my previous blogs have indicated the wording of the rules left it open to the courts to adopt either position, and unsurprisingly some took one view and other courts took a different view. Both were perfectly legitimate and proper under the wording of the Civil Procedure Rules.
This key ruling should also help to quell the fears of civil litigators about the extension of Fixed Recoverable Costs to all civil work.

For a more detailed analysis of the wording of the Civil Procedure Rules and the issues involved here please go to my post: Disposal Hearings: Which Fixed Costs are Payable.

Please see another one of my related blogs:-

JACKSON LJ TO REVIEW FIXED RECOVERABLE COSTS

Written by kerryunderwood

November 11, 2016 at 2:20 pm

Posted in Uncategorized

THIRD PARTY FUNDING DISCLOSURE

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In Wall v the Royal Bank of Scotland plc 2016 EWHC 2460 (Comm)

 

the Commercial Court, part of the High Court, ordered the claimant to disclose the name and address of any party that had, or had agreed to, contribute to his costs in return for a share of any proceeds of the litigation.

 

CPR 25.14(2)(b) enables a court to order security for costs against such a third party funder.

 

Where there is reasonable belief that there is a third party funder and a serious, as opposed to speculative or fanciful, possibility that security for costs may be granted, then the court may order disclosure of the funder’s details so as to facilitate the application.

 

Thus the issue was whether the court had the power to order the claimant to disclose the identity of any third party funder, it being clear from CPR 25.14 that the court had the power to order security against a third party funder.

 

Although CPR 25.14 does not specifically provide for such disclosure, the court held that the rule conferred an “inherent, ancillary power” for the court so to do.

 

The claimant had initiated litigation worth £700 million in a legal system allowing for public identification of third party funders and therefore had no reasonable or legitimate expectation of privacy concerning any funder and this his right to private life under Article 8 of the European Convention on Human Rights was not engaged.

 

CPR 25.14 contained an inherent ancillary power to order a claimant to identify any third party funder so as to enable a defendant to seek security – see Reeves v Sprecher et al. [2007] EWHC 3226 (Ch) and Raiffeisen Zentralbank Osterreich Ag v Crossseas Shipping Limited and others [2003] EWHC 1381 (Comm).

 

The relevant conditions were satisfied here.

 

CPR 25.14 reads:-

 

“Security for costs other than from the claimant

 

25.14

 

(1) The defendant may seek an order against someone other than the claimant, and the court may make an order for security for costs against that person if –

 

(a) it is satisfied, having regard to all the circumstances of the case, that it is just to make such an order; and

 

(b) one or more of the conditions in paragraph (2) applies.

 

(2) The conditions are that the person –

 

(a) has assigned the right to the claim to the claimant with a view to avoiding the possibility of a costs order being made against him; or

 

(b) has contributed or agreed to contribute to the claimant’s costs in return for a share of any money or property which the claimant may recover in the proceedings; and

 

is a person against whom a costs order may be made.

 

(Rule 46.2 makes provision for costs orders against non-parties)”

 

The fact that the claimant had, or may have, after After-the-Event insurance which would defeat a security for costs application against him was not relevant in relation to a potential application for security for costs against a third party funder.

 

Paragraphs 41 and 42 of the judgment reads as follows:-

 

“41. There is, as it seems to me, a serious argument as to whether Mr Wall’s ATE insurance position will matter, in an application against third party funders under CPR 25.14, even if it would ‘see off’ a security for costs application against a corporate claimant following cases such as Geophysical Service Centre v Dowell Schlumberger (ME) Inc [2013] EWHC 147 (TCC) and NGM Sustainable Developments Ltd v Wallis [2015] EWHC 461 (Ch). On an application against a claimant, the court must balance the defendant’s desire to be paid its costs if it succeeds in the litigation against the fact that an impecunious claimant may be deprived of access to the court if security is required. RBS will submit, says Mr Mitchell, that the position is different in an application against a third party funder buying a stake in the claim or its proceeds: the application is then not against an impecunious claimant seeking to vindicate rights, but against a professional entity seeking to profit from the litigation of others and likely to be well able to secure the defendant’s costs. That seems to me a serious and important argument and RBS should have a proper opportunity to pursue it. Mr Davies suggested that it would be curious for RBS to be in a better position as regards security for costs, arising at least indirectly out of the impecuniosity of Mr Wall as claimant, than it would be in if OPG had sued, as an insolvent corporate claimant. As it presently strikes me, though, Mr Mitchell is not contending for RBS to be better off in that way, at all events if the proper comparison is drawn. The proper comparison is with the position if OPG were litigating in its own name, insolvent but funded such that CPR 25.14(2)(b) applied. RBS would then be in the same position, on its case, as regards security for costs from the funder; and it would be in either the same position, or a better position, as regards security for costs from the claimant, since it could at least apply for security from OPG (whether or not that application would succeed as a matter of discretion), whereas it cannot from Mr Wall.

 

  1. There is also, as it seems to me, a serious argument – that RBS should have a full opportunity to pursue – as to whether Mr Wall’s ATE insurance arrangements are such as would defeat a security for costs application against a corporate claimant. Those arrangements have been evolving, in the face of RBS’s pursuit of this application and the related threat of an application for security for costs under CPR25.14 if this application first succeeds. But even as they now stand, with improvements (as Mr Wall contends) since this topic was initially raised at the first CMC before Phillips J., in my judgment RBS has serious grounds for contending that they should not be treated as a complete answer to any security for costs application.”

Written by kerryunderwood

November 11, 2016 at 6:37 am

Posted in Uncategorized

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