Below is James Maxey’s response to the consultation: ‘Reducing the number and cost of whiplash claims.’
Express Solicitors is a Personal Injury Practice based in Manchester but serving clients throughout England and Wales. The Practice is 13 years old and in that time has assisted approximately 20,000 personal injury claimants. Approximately 25% of those have been people involved in road traffic accidents but the Practice also represents virtually every type of injured client including cases involving injuries of the utmost severity, employers’ liability cases, occupiers’ and public liability cases and clinical negligence cases. We do not buy work from claims management companies or any other work provider but advertise in a solicitors’ consortium, Injury Lawyers 4U, and directly through our own website and other media and we are then approached directly by members of the public who have been injured. We do not cold call or cold text anyone and we only respond to people who have contacted us after they have been injured.
Nearly every case is conducted under the current conditional fee regime and we do not, by any means, make a ‘fat cat’ profit from success fees in those cases. We do not win 39% of all the cases which we sign up. The nature of personal injury work is that cases need expensive and detailed investigation before one can be certain as to whether or not a case is likely to succeed or not. Success fees go some way to offsetting the write off for the costs of the 39% of cases that we do not win. We are known in our industry for taking difficult and complex cases and often ones that other firms of solicitors have backed away from pursuing.
1. Personal injury is different to other cases, for example, debt or consumer disputes
Our view is that it is, in practical terms, impossible for people to pursue cases against insurers or other compensators who are always able to employ their own legal representation without their own solicitor. In the vast, vast majority of cases that this firm has pursued over the last 13 years, because of this firm’s negotiation and/or litigation on behalf of clients, first offers from insurers have been substantially exceeded by final settlement figures i.e. clients would not have received correct compensation if they did not have the technical skills to deal with insurers whose start point offering is always much less than a claim is worth.
In order to pursue a personal injury claim one must obtain medical evidence. How would an individual injured claimant do that? They would have to find an appropriate expert, let’s say an Orthopaedic Consultant or an Accident & Emergency Consultant, who had a practice in producing medico-legal reports. That expert would have to be happy to accept to accept instructions direct from a member of the public (we very much doubt any would). No doubt the expert would require payment for his/her services up front from a member of the public otherwise how else would he/she practically get paid? The expert would hardly extend credit to member of the public he/she had never met or credit checked or had any business relationship with. Let’s just assume for a crazy moment that the individual injured member of the public had been able to find £400.00 or whatever for the expert report, instructed the expert and got the report back. That injured person then needs to value the claim. How would they do that?
In summary, our submission is that removing costs recoverability from all cases below £5,000 or all whiplash cases below £5,000 in the RTA arena will remove proper legal representation from that arena and that will stop the vast majority of injured claimants from even starting to commence the process to get compensation, let alone ending up with an adequate level of compensation at the end of the process. A recent Association of Personal Injury Lawyers survey showed that 70% of claimants would not consider bringing their own compensation claim. We believe in the real world that this figure would be more like 99%.
We believe that there would be more opportunity for fraud, not less, in a system where there was a £5,000 Small Claims Track limit. Effectively solicitors would be cut out of the process and that void would likely be filled by claims management company type operations offering to negotiate compensation for clients outside of the litigation process and taking large percentages of clients’ damages to do it. In that environment there are none of the checks and balances of a solicitor, instructing an independent medical expert, reviewing medical records and accident circumstances carefully (the independent medical expert owing his duty to the court and not to the party instructing him) etc etc.
If one believes the often quoted figure put forward on behalf of insurers that 7% of whiplash claims are fraudulent then doesn’t a proposal to increase to £5,000 simply penalise the totally innocent 93% who did not ask to be involved in an accident caused by the negligence of another road user? Our firm deals day in and day out with cases where fraud is either alleged or the suggestion of it is raised by defendant insurers. So far as we can tell, this is often because the claimant has an Asian surname. We can recall 2 instances over the last 13 years and 20,000 or so cases handled where claimants were found to be fraudulent by a judge at a trial and the trial was won by the insurers. We can only say that the 7% figure does not accord with our own experience. Of course, we turn away many prospective clients if we are not satisfied about the circumstances of the accident or if we believe that the claims are not genuine and so claimant solicitors play their part under the current system in seeking to reduce fraud. It doesn’t help us on a “No Win, No Fee” case, quite apart from the moral duty, because we will not be paid if a client loses his/her case because they are a fraudster and we will lose a lot of income. See above for the effect of cutting appropriate legal representation out of the system.
3. Other reforms
When the RTA portal with fixed fees of £1,200 (based on the irreducible minimal amount of work to do the claim properly) was introduced it was supposed to be allowed a reasonable period of testing to see what effect it had on reducing costs whilst providing adequate access to justice for injured claimants. It is clear that significant savings have been made for insurers since the portal was introduced. In April this year those fixed fees will be reduced to £500 and there will be no recoverable success fee or after-the-event insurance premium. Costs to the client are supposed to be offset by a 10% increase in general damages.
It seems nonsensical then to bring in a further measure to achieve the same result. There is clearly going to be an absolutely massive saving to the insurance industry on top of the saving already achieved since the portal commenced. If you don’t accept our view on that point then see Professor Fenn’s comments this week “I don’t think he (Jackson) foresaw that his package could be undermined by the government adding an additional overlapping policy, like the possible increase in the small claims limit. These are things that are really alternatives to what the Jackson reforms were intended to do, which was to provide a framework within which the incentives operating on claimant solicitors would be improved and costs controlled”. Our view is that any consideration of a change to the Small Claims Track limit for personal injury should simply be delayed for at least, say, 24 months to assess all of the “Jackson” and “LASPO” reforms which are rolling out from April to July 2013.
We note that yesterday another Transport Select Committee investigation in to the cost of whiplash was rolled out. It seems to be becoming a Ministry of Justice and government fixation.
It is our submission that, at this stage, it would be appropriate to pause and see the effect of the large number of changes including the referral fee ban and the changes referred to above before further steps are carefully considered.
May we conclude by quoting Lord Newberger who on the 5th March told the BBC “My worry is the removal of legal aid for people to get advice about law and get representation in court will start to undermine the rule of law because people will feel like the government isn’t giving them access to justice in all sorts of cases.”