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