With all the procedural changes to
personal injury law, it's been a difficult time for lawyers dealing with this field of work. Indeed many have been made redundant as law
firms scramble to keep pace with the rate of reforms and like nervous
soothsayers guess what it all might mean for the future of their
businesses. The cascade of suggested
further reforms follow on from the enactment of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 and have been put forward by both government
and the insurance industry.
At long last a voice has
been heard setting out a different perspective; one in which individuals who
have been injured and wish to claim compensation are not automatically
considered liars and fraudsters and their lawyers not shysters only interested
in milking the system and taking the cream off the top as well. The Transport Select Committee launched an
enquiry into road traffic accident claims and in particular claims for whiplash
injuries, a hot topic both between the different groups of professionals
involved and the media with its regular reports on how outrageous it is for
people to try to claim compensation when they have been injured. Indeed, so regular are these reports that we
have become accustomed to seeing the same photographs being used to illustrate
them over and over again. Their report was published at the end of July 2013.
In the consultation document on whiplash claims, Helen Grant MP boldly stated that, “Britain has become the
whiplash capital of the world.” The
Transport committee examined this statement and came to the conclusion that
there simply wasn’t the data to show whether this was correct or not. So, a government creating policies and laws
that have lead to people being made
redundant and businesses being closed down has been shown not to have the data
to justify these policies and laws.
One point that struck me in
reading the report is that the committee was surprised that Defendant insurers
will sometimes make offers to settle injury claims even before the medical
evidence has been obtained. This is a
common tactic by insurers seeking to close down a case as economically as
possible and is particularly cunning at a time of austerity when for many
people money is in limited supply.
Lawyers acting for injured people often have a challenge in persuading
clients to wait longer for their compensation so their cases can be
investigated properly. It’s not just
the smaller cases where this tactic is applied. Insurers use it in bigger
cases, often where some initial medical evidence is obtained indicating that
the injured person has a substantial claim but where it is not yet the time to
finalize the medical evidence.
The report by the committee
makes another interesting point about medical evidence. When instructing a
medical expert to provide a report on an injured person’s condition, it makes
sense to obtain their medical notes beforehand so that the expert has a full
account of not only the claimant’s injuries from the accident but also their
general medical background. In a whiplash claim especially it is clearly helpful
for the expert to know if the claimant had a history of neck or back problems
prior to the accident or had any previous accidents or anything else that might
be relevant to the case.
Sensibly and unambiguously
the committee’s report says that it is essential that the medical expert
is provided with Claimant’s medical records.
The report states, “reports prepared without this information are likely
to be of limited value”. It is
difficult to disagree with this in terms of the quality of the evidence of what
is supposed to be a medico-legal report drawn up for the assistance of the
Court.
Yet the government’s reforms
prevent this from happening in just those cases where it would be most useful
in preventing fraud. The new rules
state that for cases under £10,000 in value (which would in reality include
most whiplash claims) it is expected that the medical expert will not need to
see any medical records (see paragraph 7.5 of the new pre-action protocol for low value personal injury claims in road traffic accidents and the equivalent
protocol for employment and public liability claims). This will mean for instance that if you are dealing with a claim
less than £10,000 in value and you obtain the GP and hospital notes to send to
the medical expert, you are unlikely to be able to recover the disbursements
involved. As a result, solicitors will
not get the notes despite the obvious utility in doing so. These rules are presumably due to the
insurance industry’s clamour for the costs of claims to be cut down.
Yet on the other hand the
insurance industry has long complained about the allegedly high number of
fraudulent whiplash claims being made.
If you deal with a case in which an insurer suspect fraud, one of the first
points they will make is the importance of scrutinising the claimant’s medical
notes. As already noted, they can provide very useful information on the
claimant’s background and so it is entirely right that they be obtained.
So, on the one hand the
insurance industry wants less fraud and requires the obtaining of medical
records to combat this, just as the Transport Select Committee recommends. On the other hand, the government (as
enacted in the rules) and the self same insurance industry don’t want lawyers
to obtain medical notes so that the costs of a claim are reduced. It can’t work
both ways.
One of the major points of
concern for personal injury solicitors is whether the small claims personal
injury limit will be increased. At
present this is £1,000 and the government’s consultation on road traffic claims
sought views on this issue. Three
proposed changes were suggested; increasing it for all claims, just for road
traffic accident claims or just for whiplash claims (which might be a
definitional challenge). Generally this
is regarded as involving an increase to £5,000, although Professor Regan
reports that Lord Jackson himself thought a seemingly inflation-derived
increase to £1,750 was appropriate.
Any increase to £5,000 would
in one move drastically alter the claimant personal injury profession as in the
majority of claims the injury is valued at less than this amount. Solicitors
would simply not be able to deal with them as it would be uneconomic. The current rate of firms closing down and
redundancies might become a flood. There is no doubt that the
insurance industry would welcome such a dramatic reform and the Lord Chancellor has even suggested the small claims limit could be increased to £15,000.
The Committee’s conclusion
on this important point is admirably clear: they did not support increasing the
small claims personal injury limit.
Without the assistance of solicitors, claimants will be on their own.
They expressed concern that claimants will find making a personal injury claim
a complex and intimidating process.
Insurers, they say, will use legal professionals to contest claims which
will add to the problem. APIL, MASS and
others have been saying just this thing for a long time. Justice could be impaired if the small
claims limit is increased to £5,000.
They go onto say that
solicitors will not be able to help with these cases if the small claims limit
increases as they simply will not be able to earn a living from them. Instead, cases of this size, the most common
sort and often of great importance to claimants, will be run by claims
management companies. It is the CMCs
that have been the focus of much public opprobrium, linked as they are in the
press with non-step text messages and cold calling. All of this will only get worse if the small claims limit is
lifted.
In one particularly
interesting section, the report notes that the committee was disappointed to
hear from witnesses from the legal profession that they had not been invited to
the Prime Minister's summit on insurance and nor were they aware of any
substantive contact with Department for Transport ministers. This, the report
says, is particularly surprising given that legal reforms were clearly under
discussion. This has long been a point of contention and the Committee was
clearly concerned about the government’s apparent reluctance to act on the
views of anyone apart from the insurance industry about these issues.
The report from the
Transport Select Committee is a welcome rebuttal of many of the proposals
advanced by the insurance industry. Genuine claimants, to use the report’s own
words, should not be demonised. The onus is very much back on the government
and insurers and they will have to work harder to justify any further reforms
especially an increase in the small claims personal injury limit. The lack of quality data about these issues
has been exposed and so any further bold statements about Britain being the
capital of the world are going to look even more outrageous.
For a long time an increase
in the small claims personal injury limit has seemed all but inevitable. The government of course may simply
disregard the report as it did the Civil Justice Council’s review of the roadtraffic accident portal in January 2013.
The government has said it will make its announcement in the autumn
which now of course is approaching quickly.
With such a powerful committee coming out against such a decision, it
will be interesting to see how the government justifies any change.
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