This Thursday saw an early start for me and a drive over to the waterfront in Liverpool to speak at the PI Futures Conference on behalf of the Association of Personal Injury Lawyers (APIL).
The panel session I was speaking at was called “The reforms: Where are we now?” and the invited speakers were introduced as those most likely to know where the current proposals for reforms announced by the government in the 2015 Autumn Statement were up to. As Vice President of APIL, I wanted to ensure that the role of APIL in challenging these reforms, and the reasons for that, were known.
As a solicitor who acts only for injured persons, a legal trainer, and a member of the Civil Procedure Rule Committee, I am very well placed to give an insight into how damaging these reforms could be to the injured person, the problems that could be caused by rushing ahead with them, and the missed opportunities for reform in other areas related to the injured person. Below I set out the points that I made in the speech I gave as part of that panel session.
What We Know About The Proposed Reforms
- We know that the plan is based upon a belief that insurance premiums are too high. That is perhaps the one thing on which there is some agreement.
- We know that the proposed way to deal with this is to remove the right to compensation for bodily injury for whiplash. The phrase used, soft tissue injury is something that is not defined but the target seems clear. Concurrently proposed is a raise in the small claims limit, perhaps to £5,000, to supposedly reduce the costs of claims.
- We know that the government of the time believed that the insurance industry would pass on savings of approximately £50 per policy per year on the back of those proposals.
What we really don’t know is the important detail of the process or the timing of it. The proposals were in the autumn statement in 2015 yet we have heard nothing more substantively. Most recently Oliver Heald, a minister of state at the MOJ, when asked about timing replied on the 12th September 2016:
“We are currently looking at the whiplash proposals and will set out our plans in due course.”
The uncertainty is damaging.
If the government remain committed to the general damages changes then primary legislation will be needed. If the proposals focus on the small claims track alone then the timescales could be shorter as a simple rule change would likely be enough. Rule changes ordinarily happen in April or October.
The Problems With The Proposed Reforms
The best we can say at the moment is that they are ill-judged and based upon a number of false premises:
Firstly, it is foolish to expect insurers to pass on any savings they have made or will make from any proposed reforms. 3 years ago the government instituted a raft of radical reforms to personal injury claims. The insurers made a deal with the government that promised premiums would fall as a result.
The costs in claims have fallen dramatically. Insurers have saved, on their own statistics, more than half a billion pounds on personal injury claims since 2013, but premiums have gone up.
Insurers have reneged on the deal, and if the small claims and whiplash proposals go ahead they are very likely to do so again. For an injured person the stark reality is that at best they will be left to face a well-resourced defendant without assistance, and at worst will be unable to enforce what rights they may be left with.
70% of people said they would not want to pursue a whiplash claim without the help of a solicitor.APIL research in 2012 about whiplash claims
Secondly, the proposals are aimed at the wrong target. Claims management companies making nuisance calls are the bane of everyone’s life. The Treasury told us that the proposals in the Autumn Statement to remove damages for lower value soft tissue injuries would “crack down on the fraud and claims culture”. When asked in Parliament, justice minister Dominic Raab equated ‘claims culture’ with cold calling. But the Government has not banned cold calling for CMCs.
APIL have been very active in addressing this issue with our can the spam social media campaign. Simply banning them and the practice of cold calling has the twin benefit of simplicity and effectiveness. We were dismayed to see the SRA consultation recently seeming to suggest that cold calling should be permitted by solicitors. The problem does not need exacerbating and we were heartened by their quick commitment to abandoning that proposal. There are also other issues that would be better targeted. We have an insurance industry with dysfunctional practices that are artificially inflating premiums. Injured people are being used as scapegoats.
Thirdly, the proposed reforms to any practitioner, claimant or defendant, look ill-judged. We are a common law jurisdiction and we are rightly proud of our legal heritage. The removal of general damages shows a callous indifference to injured people. Compensation for bodily injury has been a common law right for more than 130 years. The increase in the SCT is something that has been visited in the past and rejected by the government, after the intervention of the transport select committee, unless safeguards were put in place to protect our common law rights. This has not been done. It is incredible to us all that the government believes a person delayed 15 minutes on a train is more deserving of compensation than an injured person.
Fourthly, the underlying reasoning given for the proposals is wrong. The compensation culture is a myth. The government know this as Lord Young told them so in Common Sense Common Safety in 2010 when he said it was a problem of perception rather than reality, and Lord Dyson in March 2013 suggested they make a substantive educative effort to counter the media-created perception.
Finally, the proposals are simply not proportionate and run the very real risk of preventing injured people seeking redress against those who injured them. In 2012, APIL research showed that 70% of people asked if they could place a value on a whiplash injury could not. This means they would literally not know where to start. They would be at the mercy of a well-funded defendant with insurance paying for representation. LJ Briggs in his reports on the online court proposals identified this unlevel playing field in personal injury claims as a problem and recommended that PI stay outside the online court. Well, the problem is still there online or offline if the autumn statement proposals go ahead.
The Missed Chances For Reform Of Real Problems
What all of this actually means is that this detracts from the things we should really be talking about and which APIL is committed to campaigning for:
- The current law on bereavement damages in England, Wales, and Northern Ireland is unfair. It should not be cheaper to kill than maim. There is a serious imbalance between the approach in Scotland and that in England, Wales, and Northern Ireland. A judge has a much wider discretion in relation to damages in Scotland that promotes a fairer outcome. Northern Ireland has recently increased the level of statutory bereavement damages but there remains work to be done. APIL is calling for fairness for bereaved families.
- Mandatory public liability insurance would raise safety standards in businesses. APILs concern is that rogue businesses take shortcuts over health and safety.
- The law on psychiatric injury dates back to the Hillsborough disaster, the circumstances of which were widely misjudged and misreported. The law flowing from this is unfair and is in need of reform.
- Criminal Injuries Compensation has not been reviewed for 20 years. The current cap of £500k is not sufficient for the most severe life changing injuries.
What Is APIL Doing At The Moment?
This includes co-operation in a number of areas such as research and the setting up of a joint fund to facilitate that. Work is well underway. APIL have consistently identified a lack of credible evidence to support reform proposals from the government, and have consistently responded to consultations with credible evidence to support our position.
Once the detail is released in an actual consultation that preliminary work will enable APIL and its partners to respond in a weighted and authoritative way.
At the same time APIL has done a lot of work to prepare for its response to the proposed clinical negligence fixed costs reforms. The latest information is that the consultation is most likely to be released next month. Generally, though, it is worth remembering that the former chief executive of the NHSLA, Steve Walker, said to the British Medical Journal in 2012:
“If you stopped getting things wrong so consistently then you wouldn’t have to pay in the first place”
This is a good starting point and APIL have been talking to the government not just about this, but also about ways in which the NHS and NHSLA could be more efficient and less wasteful in the way they handle claims. All too often the NHSLA fight claims all the way to the doors of the court which increases costs.
In the past APIL have had discussions with the NHSLA about streamlining the process for lower value claims. Engagement is both appropriate and the most likely method to be successful. If you are not involved in the discussions, then how can you expect your voice and that of the injured person to be heard? What is absolutely clear though is that any fixing of costs must be led by a consideration of the process which needs to enable the proper investigation of the claim on its merits.
The uncertainty in timing and content of the consultations is damaging. The price for the uncertainty caused here is being met by the injured person as a consequence of the absence of certainty in what is a challenging time for them in their life.
There is also properly a real concern that mistakes of the past have not been learnt from. We have had reforms introduced recently that have lacked an evidential basis for them and been rushed through. By way of example:
- Fixing costs in the fast track and introducing costs budgeting were intended to reduce arguments about costs. Yet we are currently waiting for the outcome of a decision by the Court of Appeal, to be made in October, dealing with arguments about the overlap of the two systems.
- Costs budgeting and Medco have also been the recipients of a substantial amount of finessing of the rules to date relating to them which may not yet be finished.
- Proportionality remains a work in progress and we were told that there was no need for a practice direction to assist in applying that.
I would hope to see a comprehensive and measured consideration of the impact of the proposed reforms rather than a rush to implement.