Osborne - Small Claims up to £5k and no damages for Whiplash

Many of us watched the Chancellor’s Spending Review speech because of controversial proposals such as cuts in tax credits for the low paid. He gave us a pleasing U-turn on that. Then he surprised us all with an attack on lawyers and victims of accidents. Don’t ask me what this had to do with a review of public spending.

He has announced plans to increase the small claims limit for Personal Injury Claims to £5000.00 and to ‘abolish’ the right to damages for ‘minor injuries’ caused by whiplash.

http://www.lawgazette.co.uk/news/spending-review-osborne-raises-pi-small-claims-limit-to-5k/5052389.article

What the first proposal means, in effect, is that victims of accident claims with a value of up to £5,000.00 can no longer recover any legal fees if they win. So they have to represent themselves or lose part of their damages in legal costs. The Conservatives have long been keen on this idea. They proposed it in 2013 but then abandoned it following a report by the Select Transport Committee –

http://thestevecornforthblog.blogspot.co.uk/2013/07/mps-whiplashreport-supports-victims-is.html

That committee was highly critical, saying –

‘We believe that access to justice is likely to be impaired, particularly for people who do not feel confident to represent themselves in what will seem to some to be a complex and intimidating process. Insurers will use legal professionals to contest claims which will add to the problem’.

They also criticised ministers for consulting with insurers but ignoring those who represent victims –

http://thestevecornforthblog.blogspot.co.uk/2013/07/mps-whiplashreport-supports-victims-is.html

There have been murmurings that this would come back onto the agenda once Cameron and Co had a majority. It seems that they now perceive a clear field to give their insurance friends all that they want.

The second proposal is rather more bizarre. It is a plan to abolish the right to damages for injuries caused by somebody’s negligence. So for the first time in UK legal history we will have a non actionable injury. Who will decide what can be claimed and what cannot? This will involve a fundamental shift in legal thinking. Will other injuries follow suit?

Mr Osborne had announced these changes to deal with the mythical 'compensation culture'. This ‘culture’ is a creation of the media and the insurance industry. It is a phrase used to alarm us all and create hostility without a shred of evidence to support it. The other reference made is to fraudulent claims. There are a very small minority of such claims. We all want to get them out of the system. In fact procedures already exist to deal with them. To abolish the right to damages at all is nothing to do with fraud.

It is an all out attack on victims for the benefit of the insurance industry. They will be the main beneficiaries of all of this. Osborne talks of a reduction in insurance costs of about £3 - £4 a month. I would not hold my breath. Insurance costs are going up anyway because he increased Insurance Premium Tax in the last budget.

I can see a long struggle ahead to fight these plans as the government again declared war on a whole professional sector.

In the meantime I predict that this will move us a step closer to USA style contingency fees where those who succeed in their claims will give up part of their damages in legal fees. I also suspect that the level of damages will increase to mitigate the worst effects of all this.

Law - a career for the rich? (3)

I think most would agree that we should have a diverse legal profession.

This is important across all levels. We need a strong vibrant profession that is in touch with those that it represents. Those who come into the law now will be the business leaders, legal thinkers and judges of the future. In any reasonable society those in such positions need to be drawn from as broad a base of possible.

It is also very important that talented lawyers are drawn from all across society and not limited to one social group.

I have written before about major concerns that the law is becoming a career option only for the rich –

http://thestevecornforthblog.blogspot.co.uk/2012/05/law-career-for-rich.html

Lady Hale, our most senior woman judge and former academic talked in 2013 about many who aspired to a legal career they may never have. 

http://www.legalfutures.co.uk/latest-news/hale-outlines-worries-too-many-law-students-too-few-jobs

A recent report suggests that the situation is getting worse rather than better –

http://www.lawgazette.co.uk/practice/social-mobility-little-improved-at-top-of-profession/5052362.article

This study reported by the Law Society Gazette found that 75% of top judges and QCs were independently schooled. You are far more likely to become a QC if you went to Oxbridge. Some say that the onus is on law firms to take the initiative. This is clearly true and Allen Overy, mentioned in the article, do have an have excellent initiatives to provide work experience for all students –

http://www.allenovery.com/corporate-responsibility/probono-community/education/Pages/smart-start.aspx

But such initiatives can only play a limited role. 

The abolition of minimum pay for trainees has been a major disincentive for many. Why would any aspiring lawyer want to run up debts of £50k and then find there is little or no chance of a training contract which provides a sustainable wage? I was one that fortunate generation who was able to go through academic and professional training with full state support and no debt. I am one of many for whom the law would have been inaccessible today.

A fundamental question needs to be addressed. Do we want an inclusive profession? If so, then all of us need to do what we can to remove rather than create obstacles.

Easing of tuition fees, better funding and a realistic salary would be a start.

Unbundling without tears!

Until a couple of years ago no one in the world of legal services had heard of ‘unbundling’. 

The idea had first been put forward by legal futurist Richard Susskind. He suggested that this would be the way forwards for delivery of legal advice in years to come.  I first mentioned it in 2013 –

 http://thestevecornforthblog.blogspot.co.uk/2013/05/the-demise-of-legal-aid-is-anyone.html

The idea is that lawyers will no longer see a case from cradle to grave. They will be brought in by clients at key stages to advise on particular issues and to assist with the drafting of formal documents.

Richard Susskind anticipated that it would become popular with sophisticated commercial clients who only have limited need for specialist legal assistance. The almost wholesale removal of legal aid in 2013 gave the concept a whole new market. Those who could not afford to engage lawyers were left to litigate in person. So the use of unbundled legal services became a significant resource. Lawyers will offer assistance at key stages. So, for example, they might give initial advice on the law and procedure for a fixed affordable fee. The litigant will then get on with it and go back to the lawyers at various stages along the way as the need arises. Family Lawyers, in particular, have helped clients in this way.

But there has always been a lingering worry. I touched on this in 2013. At that time I wrote –

‘I think there are some dangers. If the lawyer is dipping in and out of a case at key stages then something might be missed. Cases do not always follow a predictable path and I can foresee arguments between solicitors and clients as to what exactly has been agreed.’

In other words a lawyer could perform some limited tasks but be found to have a wider duty to explore and advise on possible pitfalls. This very point has been considered by the Court of Appeal in the recent case of Minkin v Lesley Landsberg [2015] EWCA Civ 1152

Mrs Minkin had asked the Defendant solicitors to draft a consent order. The retainer was limited to that piece of work. When it all went pear shaped she sued the solicitors for failing to advise on the underlying merits of the agreement. The Court of Appeal found in favour of the lawyers. Their instructions were limited to the drafting of a consent order. This is what they did. They were under no duty to go beyond this. King LJ talked of the invaluable benefit of unbundled services to both litigants and the courts. The court found that solicitors who offer unpacked legal services should not be subject to any wider to duty to beyond what they have agreed to do. Jackson LJ agreed.

 http://www.lawgazette.co.uk/practice/appeal-decision-protects-solicitor-offering-unbundled-advice/5052236.article

This is a clear statement from the Court of Appeal that lawyers should be encouraged to offer limited and affordable chunks of work with having to worry about being sued in relation to some wider issue.

I still have some mixed feelings. The Minkin case is clearly a comfort to lawyers. There is no doubt that unbundling can help litigants negotiate the maze of court procedures. It also helps the beleaguered courts. But it is clear that there will need to be a clear agreement in writing between the lawyer and the client about what exactly is agreed. There can be no room for ambiguity because if it goes wrong we all know who will be blamed!  

I would also be concerned about drafting a document to confirm an agreement that seemed not to be in the client’s best interests. But we can’t have everything. The government has seen fit to remove full access to lawyers for those of limited means. So at least this is something. And the clear message from the Courts is that the benefits to our legal system outweigh any possible concerns.

MedCo and Deafness Claims - blessing in disguise?

I have ranted on numerous occasions here about the influence that the insurance industry has on the government. This regularly came up during the so called reforms of 2013 that devastated the rights of victims of accidents –

http://thestevecornforthblog.blogspot.co.uk/2013/03/apils-judicial-review-morning-after.html

In particular I referred to a ‘summit meeting’ which had taken place to which those representing victims had not been invited. Over the following two years, insurers seem to have become more and more confident that this government will do whatever they ask.

This is highlighted by a report in yesterday’s Litigation Futures concerning plans to extend MedCo. The report quotes the Deputy Director for Civil Justice at the MOJ as saying that the insurance industry is very concerned about Noise Induced Hearing Loss claims. He seems to say it as if that is now the starting point for further ‘reform’. Of course insurers are concerned. Claims cost them money. Of course they want to reduce the number of claims. They want to save money. But what has this got to do with the MOJ? Is there now only one side of any argument?

It seems to be taken as read that victims are a ‘problem’ and have to be brought under control.

http://www.litigationfutures.com/news/hearing-loss-claims-could-be-brought-into-medco-regime-moj-official-suggests

But what about the actual proposal?

For those who don’t know – MedCo is the system whereby victims of soft tissue injuries in motor accidents are assessed by a medical expert selected by the claimant’s representative from an approved list. So the idea would be to introduce a similar system for the assessment of whether a worker’s hearing loss is caused by noise. Far be it from me to support such a thought. But I wonder whether it is such a bad idea.

It is well known that there are some medical experts who are very popular with insurance companies in hearing loss cases. This is because they are instinctively hostile to the very idea that noise at work can damage hearing, and if it does any damage it must be minimal. So if we have a panel from which I can select an expert, then presumably I can decline to select such experts – even if they find their way onto the approved list. So in the longer term we could see the end to disproportionate arguments on causation, which experience tells me are the source of the vast majority of the cost incurred on noise induced hearing loss cases.

Or am I being naïve? What if the list is entirely made up of experts who will routinely exclude noise at work as a cause of the hearing loss? I can certainly see some interesting judicial review actions if that were the case.

I predict interesting times ahead. It is clear that the insurance industry sees victims of hearing loss as its next target, and that a compliant government will do what it can to assist.

But it might also be the case that they will need to be careful what they wish for.

Concerning three worrying cases of fake litigation

I send an annual email to all lawyers in my firm. It goes out just as we begin the process of renewing our Professional Indemnity Insurance. The wording has barely changed in over 20 years – it started life as a paper memo! This is the familiar email that invites them to report to me any circumstances that might give rise to a claim. It always has the same ending –

‘It is not the end of the world if you make a mistake. But it is a different matter altogether if you don’t tell me!’

I have always encouraged lawyers to speak to me or somebody senior if they are worrying about a file. I do it myself. It is all part of learning to work as a busy lawyer and also to sleep at night. All of which makes some recent stories both alarming and sad. These involve solicitors who have gone to staggering lengths to try and avoid being found out.

The first concerns Claire Tunstall who was suspended by the SDT earlier this year for fabricating documents in a clinical negligence case. This included medical reports, correspondence and counsel’s advice. She also made a payment to a client from her firm’s office account, pretending that it had come from the other side. The SDT found that she had suffered from a lack of support and supervision from her employers. She seems to have become ill as a result –

http://www.solicitorstribunal.org.uk/Content/documents/11289.2014.Tunstall.pdf

It is hard to imagine how someone can get into this position. The stress of maintaining such a fiction is far worse than the stress of getting it off your chest by admitting you have lost control of a case. I actually have great sympathy for her and would like to seen action against her firm who allowed this to happen.

But the plight of Ms Tunstall is overshadowed by two more recent incidents. The first is the case of Mark Davies who conducted fictitious cases for about five years. He fabricated documents, misled clients and even made payments to clients from his own money. Not surprisingly he was struck off last month. Again the question has to be … why? At what point did it become preferable to embark on a pretence that ended his career, rather than seek help.

http://www.legalfutures.co.uk/latest-news/solicitor-who-paid-clients-compensation-from-his-own-bank-account-is-struck-off

These have now been followed by third solicitor who has been referred to the SDT.

http://www.legalfutures.co.uk/latest-news/solicitor-who-conducted-fictitious-litigation-set-to-face-disciplinary-tribunal

One such incident would be unfortunate. To have three in the space of a few months is worrying. Why is it that lawyers are so afraid of admitting that something has gone wrong, that they will go to such drastic extremes? What has happened to our profession that nobody can put a foot wrong and if they do they risk their careers and health to pretend that all is well?

I think that we all have a role to play here.

Those of us in senior positions must make it clear that we are here to help and guide and not to judge or criticise. A difficult case never seems to be as bad once it has been shared with someone who isn’t worried about it!

I have no doubt that most of us do this. 

But something is going wrong and we need to do all we can to ensure that careers are not ruined through fear and panic.