Legal WatchWhat’s on the horizonJanuary 2014

Events

Plexus and Greenwoods hold a series of events which are open to interested clients. See below for those being held in the next months:

An Audience With... Caroline MItchell of the Financial Ombudman Service | 21.01.14 | London

MBIG Seminar | 22.05.14 | London

In This Issue:

• Cost budgeting and case management by the courts

• Reforming the way claims for mesothelioma are processed

• Discount rate

• The low value claims ‘portals’

• Whiplash

• Reform of the private motor insurance market

• Costs

• ASHE data

• Third Parties (Rights against Insurers) Act 2010

• Recovery of Medical Cost for Asbestos Disease (Wales) Bill

• The legal market place

Welcome to the first joint Plexus/Greenwoods’

review of what the next quarter holds for those

involved in personal injury claims.

Introduction

03

Discount rate

Comment: Despite the extensive consultation that has taken

place, there is no indication that a decision on lowering (or

raising) the discount rate is imminent.

The low value claims ‘portals’

Comment: As the number of claims being handled through

the two existing portals increases, patterns of behaviour

also become clearer. There are currently three primary areas

of concern:

• Defendants’ representatives must not contact claimants

direct, once they become aware that a solicitor has been

appointed, usually because a CNF is received.

• There is still a problem with more than one claimant

representative sending in a CNF. While the onus is on the

retained solicitor to deal with any problems created by the

actions of other firms, insurers should seek confirmation

of which firm has been appointed. Both the insurer and

the claimant’s solicitor are entitled to complain to the

Information Commissioner’s Office and/the Solicitors’

Regulatory Authority and so it is worth looking out for

repeat offenders.

• So called ‘pre-med offers’ are popular with some insurers

but are frowned upon by the Portal Behaviour Committee.

It should be noted that if an independent medical panel

is created to deal with whiplash type claims (see below)

such offers may be outlawed. The requirement that all

claims should be ‘proved’ by medical evidence is directed

at discouraging fraudulent and exaggerated claims, an

issue which does appear to be reasonably high on the

government’s agenda.

A ban on pre-med offers would probably coincide with a ban

on law firms offering inducements to potential claimants.

Cost budgeting and case management by the courts

Comment: There is real concern that the tail (the courts) is

now wagging the dog (the legal profession). The emphasis

has suddenly switched to the courts controlling evidence

and costs without necessarily having regard to the issue of

justice between the parties. This is leading to a climate of

fear, with costs being front loaded to minimise the risk that

orders cannot be complied with. Mistakes will occur, even

in the best regulated firms, but unless the error is classed as

‘trivial’ the consequences may be draconian.

Reforming the way claims for mesothelioma are processed

Comment: After an extensive and lengthy consultation

process the government has decided not to introduce a new

Mesothelioma Pre Action Protocol to promote out-of-court

settlements but will now work with all parties to improve

the existing process. Proposals to fix the fees for lawyers

making claims will also not be taken forward at this stage.

However, for claims commenced from July 2014 claimants

will not be able to recover CFA success fees or ATE

premiums.

Consideration is still being given to establishing an electronic

case management ‘portal’ for mesothelioma claims.

Running alongside these measures is the Mesothelioma

Bill which is to establish a diffuse mesothelioma payments

scheme to compensate those who cannot trace the liable

employer. In its current form the Bill provides for tariff

payments of up to 75% of the level of damages recoverable

under a civil claim. Legal costs will be fixed, probably at

£7,000.

The scheme will be funded by a levy on insurers.

04

Whiplash

Comment: The government’s preferred option for dealing

with the ‘scourge of whiplash’ appears to be the creation

of a panel of single joint experts to provide truly objective

reports. If there is to be confidence in this solution, it is

imperative that insurers and their representatives should

lobby for any panel to comprise only experts who have

been accredited; who are subject to vigorous monitoring;

and who may be subject to disciplinary action if found to be

preparing reports not to the requisite standard.

In its latest report the Transport Select Committee expressed

concern that the government had not adequately addressed

some of the evidential issues surrounding whiplash claims.

However, it also that suggested that there should be a

clearer strategy for ensuring that any resulting savings

should be reflected in a reduction in motor premiums.

Reform of the private motor insurance market

Comment: The Competition Commission has delivered

its preliminary findings on the provision of private motor

insurance and related goods or services. It has expressed

concern about the way in which non-fault drivers’ insurers

are able to seize control of the repair and claims processes

with neither the at fault insurer or the claimant having any

means of exercising any control.

The principal solutions suggested are:

• Replacement vehicles should be the responsibility of the

non-fault driver’s insurer with no right of recovery of the

cost from the at fault insurer; or

• The at fault insurer should have the option to handle the

claim to such extent as it feels appropriate.

• There is to be further consultation but it is clear that the

existing arrangements for providing credit hire vehicles

and for vehicle repairs by non-fault insurers are unlikely to

survive.

Costs

Comment: An extensive consultation is underway to

review the guideline rates for solicitors’ costs. It is to be

hoped that once rates are set for each grade of fee earner,

in each geographical region, the grounds for applying for

any enhancement will be removed or limited to the most

exceptional circumstances.

There is concern that this major exercise is being undertaken

on the basis of inadequate research and at the wrong time,

given the continuing fall-out from the Jackson reforms.

Alongside all this 2014 will see costs’ budgeting bedding

down and the first batch of cases testing the boundaries of

One-Way Costs Shifting.

ASHE data

Comment: The revised data was delayed until 12 December.

Table 25.6a combines ASHE 6145 and 6146 to produce an

equivalent to SOC2000 code 6115.

Third Patries (Rights against Insurers) Act 2010

Comment: Although this legislation received royal assent

in March 2010 and it was announced that it would come

into effect as soon as possible in 2013, the government has

confirmed that no date has yet been set.

Recovery of Medical Cost for Asbestos Disease (Wales) Bill

Comment: This Bill, which seeks to extend the recoverability

of medical treatment costs from defendants, was seen as

the possible thin end of a much wider wedge. However,

there were also question marks over it legality and it has

now been referred to the UK Supreme Court.

The information and opinions contained in this document are not intended to be a comprehensive study, nor to provide legal advice, and should not be relied on or treated as a substitute for specific advice concerning individual situations. This document speaks as of its date and does not reflect any changes in law or practice after that date. Plexus Law and Greenwoods Solicitors are trading names of Parabis Law LLP, a Limited Liability Partnership incorporated in England & Wales. Reg No: OC315763. Registered office: 8 Bedford Park, Croydon, Surrey CR0 2AP. Parabis Law LLP is authorised and regulated by the SRA.

www.plexuslaw.co.ukwww.greenwoods-solicitors.co.uk

Contact UsFor more information please contact:

Geoff Owen

Director of Learning & Development

T: 01908 298 216

E: gro@greenwoods-solicitors.com

Other PublicationsIf you would like to receive any of the below, please

email indicating which you would like to be sent.

Monthly:

• Legal Watch: PICG

Bi Monthly:

• Legal Watch: Employment Writes

Quarterly:

• Legal Watch: Counter Fraud

• Legal Watch: Disease

• Legal Watch: Health & Safety

• Legal Watch: Marine

• Legal Watch: Professional Indemnity

The legal market place

Comment: The coming year is likely to see a seismic shift

in how legal services are provided. There will be a mix of

ABSs absorbing firms and teams of lawyers; mergers and

acquisitions in response to the need to ‘grow to survive’;

and firms failing as they realise that the market has moved

on without them.