personal injury law 2014 · am one of 4 lead catastrophic injury solicitors based in the london...

Personal Injury Law 2014

virtual round table

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ROUND TABLE: PERSONAL INJURY LAW 2014

s the second founding member of Gacovino, Lake & Associates, Edward Lake brings exceptional marketing and advertising skills to our New York practice. This complement to the experience and skill of

our personal injury attorneys have helped to build our practice into one of the most distinguished firms in the state.Edward Lake earned his law degree from Touro College Law Center. He is currently the director of the Judith Lake Charitable Foundation.

escribed as such by many, Iain is quite simply - a brilliant lawyer. You can be assured that he has come across just about every possible contingency throughout his more than 20 years’ experiences of personal injury and

clinical negligence law. Whilst this vast experience is Iain’s main asset, his greatest value to clients is his ability to get it right - time after time! As a highly-respected litigator his achievements can be better understood when one is made aware of the esteem in which he is held by clients, colleagues, other fellow-professionals and the Courts.

MEET THE

Edward Lake - Gacovino, Lake & AssociatesT: +1 800 246 4878E: [email protected]: www.gacovinolake.com

Iain Oliver - Ison HarrisonT: +1 13 284 5116E: [email protected] W: www.isonharrison.co.uk

EXPERTS

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D

Andrew King qualified as a solicitor in July 2008. He heads up the dispute resolution department at Lennons Solicitors and is responsible for all

litigious matters, including personal injury. Andrew was appointed as a director of Lennons Solicitors in July 2011.

Andrew is recognised as a personal injury specialist and is accredited by the Association of Personal Injury Lawyers as a Senior Litigator.

Andrew is proud to represent individuals who have suffered injury through no fault of their own, with his main aim being to negotiate the highest level of compensation for his clients in the shortest time possible.

Early in his career, Andrew acted for three personal injury Claimants who were affected by the Buncefield explosion in 2005.

Andrew King - Lennons SolicitorsT: +44 (0) 1494 773377E: [email protected]: www.lennonssolicitors.co.uk

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MEET THEEXPERTS

I have worked in the field of clinical negligence since I qualified as a solicitor more than a decade ago. I have experience of all the many different types

of medical negligence cases. A lot of my work involves:

birth defects and unintended pregnancies,

birth injuries to the child including cerebral palsy and erbs

birth injuries to the mother, such as obstetric anal sphincter injuries.

brain injuries (and in particular cases involving strokes and delays in diagnosing a brain tumour)

deaths,

DVTs and pulmonary emboli

surgeical claims

tuberculosis

I am one of 4 lead catastrophic injury Solicitors based in the London office. My team consists of myself, an assistant fee earner and legal assistant/

paralegal. We work on high value personal injury claims arising out of road traffic accidents and accidents at work involving brain injuries, spinal cord injuries, amputations and complex Orthopaedic injuries mainly involving complex lower limb fractures arising out of motorcycle accidents. In addition I deal with Fatal Accidents and complex and maximum value CICA claims.

Alan set up Nesbit & Co Solicitors in Bury in 2003. An APIL-accredited lawyer at Senior Litigator level, he has worked on both the claimant and

defendant insurance side with various practices and now spends his time managing and driving forward Nesbit Law Group LLP, which also has offices in London, Liverpool and Leeds.

Alan specialises in defending allegations of fraud from a Claimant perspective, compliance and hire. Earlier in his career, he helped credit hire companies to join ABI GTA when it first started and he continues to monitor developments in the industry and assist hire companies at all levels of their operations. NLG is a member of MASS, an APIL-accredited firm and an Associate Member of the CHO. He has developed the specific niche in dealing with cases where fraud has been alleged to the extent that NLG is now the leading law firm in the country dealing with these types of cases and is used as an outsourcing specialist firm for many of the leading RTA PI practices in the country. As a result of this work NLG’s Allegation of Fraud team won the Claimant PI Team of the Year at the PI Awards in 2012

Janine Collier - Tees LawT: +44 (0) 1223 702303E: [email protected]: www.teeslaw.co.uk

Robert Aylott - Minster Law LtdT: +44 (0) 800 328 6189E: [email protected]: www.minsterlaw.co.uk

Alan Nesbit - Nesbit Law Group LLPT: +44 (0) 161 763 0050E: [email protected]: www.nesbitlawgroup.co.uk

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1. What type of personal injury claims are you seeing occur most

frequently?

Minster: The nature of my firm’s practice is that it deals with road traffic accidents (car and motorcycle accidents and claims for drivers, passengers and riders and pillions) and occupier’s liability (“tripping and slipping”) and employer’s liability claims arising out of accidents at work. With regards to personal injury my firm does not deal with industrial disease cases. From personal experience road traffic accidents are the most common type of claims followed by employer’s liability. The volume of road traffic accidents always increases when there is bad weather.

Nesbit: My firm is particularly specialist and so we do not see the usual broad variety of claims. We concentrate on Road Traffic Accidents where the Defendant Insurer or their Solicitors has alleged that the accident involved some kind of Fraud. These cases come from other law firms at the point when they feel for a variety of reasons that they cannot continue. On a significant number of these we show that they are

perfectly legitimate claims and that the allegations are simply spurious.

Collier: We have seen a steady increase in Road Traffic Accident claims over the last year and these accounts for around 30% of our current caseload. However, there has been a sharp increase in Employer Liability claims for workplace accidents which tend to be high value and these account for around 50% of our current caseload. King: Over the past six months we have seen a worrying increase in the number of claims being brought by pedestrians who have been injured by a driver of a car or a cyclist. Many of these are occurring in low speed environments, such as supermarket car parks, where drivers are not paying sufficient attention. Although the speed of the vehicle is often low, the inequality between a vehicle and a human is significant and so, the impact often results in broken bones being suffered by the pedestrian.

2. How is compensation calculated?

Gacovino: The attorney’s fee is a percentage of what is recovered for the

client. The fee is generally between 33.33% and 40% and is regulated by the local bar association. Many states have caps on what the attorney can charge.

Litigation comes with many expenses for the law firm. These include the firm’s standard operation costs – such as staff, office, supplies, utilities – as well as costs directly related to the case, such as expert testimony. Most cases require one or more experts to testify regarding the client’s injuries. These experts can cost many thousands of dollars. On a more complex case, especially in medical malpractice cases, expert testimonies cost hundreds of thousands of dollars because of how many experts may be necessary. The representing law firm is the one who bears all of these costs, and if they lose the case they get nothing in return.

Oliver: In England & Wales compensation is intended to put injured persons as far as possible into the position they would have been had the accident not happened and falls into several categories each with differing approaches to their calculation.General Damages are awarded for Pain,

Personal Injury Law 2014

Suffering and Loss of Amenity (PSLA). The Pain & Suffering part of the award is valued by reference to awards made in past cases where similar injuries have been considered. Although in theory a separate award should be made for Loss of Amenity but it is now rather rare for there to be a distinct monetary award.

Special Damages are for financial losses suffered up to the date of trial. Most of these items are readily calculable. For instance lost earnings calculation involves working out what the injured person would have earned but for the injury and deducting what he has in fact earned (and any income replacement benefits that he has received); if actual earnings are less than those projected there is a compensable loss. Unpaid care received from relatives on the other hand involves working out what number of hours of care has been received and multiplying by an hourly rate for a local care agency discounted slightly to reflect that no money has actually changed hands.

Future losses encompass losses that are continuing at and beyond the trial. A multiplier/multiplicand approach is

In this roundtable we spoke with six experts from around the world to discuss the current Personal Injury Law landscape. Highlighted topics include a discussion on the effects of the recent Jackson Reforms in the United Kingdom and an interesting case study in which talcum powder has been linked with ovarian cancer in the United States.

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include a claim for future loss of earnings and future care and medical costs. The award will be calculated using a multiplier and a multiplicand. The multiplicand is the annual loss itself. The multiplier is the period of likely future loss and is taken from the Ogden Tables. These are multiplied to calculate the overall sum to be awarded. However, it is not usually this simple as other factors such as career progression and how care needs will change as a person becomes older will need to be considered. The idea is to award the Claimant with sufficient damages that if invested correctly would represent a sum to provide them with sufficient funds to cover all of their future financial losses.

Compensation may also be awarded for handicap in the labour market and loss of congenial employment. To calculate this compensation it may be necessary to use the services of an employment expert. King: Awards for personal injury damages are calculated in two ways: general and special damages. General damages relate to the compensation awarded for non-monetary losses, such as the claimant’s injury itself which will encompass their ‘pain, suffering and loss of amenity’. There is no scientific

adopted by reference to government published actuarial tables (the Ogden Tables).

The purpose is to provide the injured persons with compensation for the period of loss without overcompensating them. To clarify, if a man aged say 30 is to be compensated for lost earnings to pension age (67) it would overcompensate him simply to award 37 years of his current annual loss (the multiplicand) since that would take no account either of the likelihood that he would invest the money and receive interest on it, or of the possibility that he may have periods in those 37 years when he may be unemployed, or of the possibility that he may die. The Ogden Tables enable one to present the judge with a figure for the multiplier required to be applied to the multiplicand to cover the 37 years of loss by reference to a reasonably prudent investment of the capital and life expectancy. They also contain a “filter” to take account of possible future unemployment whereby the multiplier is adjusted downwards to reflect the person’s level of education and any relevant disability.

Minster: Compensation is awarded for pain, suffering and loss of amenity (known as “PSLA” or“General Damages”) and financial or

pecuniary losses or expenses directly caused by the injuries (known as “Special Damages”).

General damages are calculated by looking at the type of injuries the client has sustained and how serious they are and then firstly looking at some general guidelines published by the “Judicial College” which provide a “band” of appropriate damages. If the guidelines are too vague then we look at precedents where the Courts have awarded damages for that particular type of injury and uprate them by inflation if those awards were some years ago.

The financial losses and expenses are split into past and future and include such things like:

(a) Loss of earnings and pension(b) Private treatment costs(c) Gratuitous care and assistance(d) Accommodation(e) Aids and equipment(f) Prosthetics and Orthotics(g) Mobility and transport – cars and wheelchairs(h) Adaptive technology

Collier: There are three parts to compensation: general damages, special damages and future losses.General Damages are damages which

are not capable of precise mathematical calculation. They encompass an award for pain, suffering and loss of amenity / enjoyment of life directly related to the physical or psychological injury caused by the Defendant. They are calculated by reference to the medical evidence obtained from an expert in the specific field that the injury relates to, the Judicial College Guidelines and precedent case law decisions are then taken into account. After April 2013 general damages for pain, suffering and loss of amenity have been increased by 10%. This is to give effect to the Jackson reforms.

Special damages are the items of financial loss incurred by the Claimant between the date of the accident and the date of trial, these can be specifically calculated. The usual heads of damage include loss of earnings, cost of care and medical expense, aids and appliances and transport costs. In RTA cases it is common to see costs of repair to vehicles, cost of hire of an alternative vehicle and loss of no claims bonus. Special damages are calculated by reference to medical evidence, witness statements and documentation such as invoices and receipts.

Damages for future losses usually

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by the protocol is equally appropriate to higher value claims and the spirit, if not the letter of the protocol, should still be followed for claims which exceed £25,000.

The primary aims of the Protocol are to promote better pre-action contact between the parties; earlier exchange of information and thorough pre-action investigation with the goals of achieving a well-informed settlement that is genuinely satisfactory to both parties and providing medical and rehabilitation treatment to address the needs of the Claimant. Should litigation become necessary, compliance with the Protocol should ensure that parties are able to comply with the strict timetable laid down by the courts.

Alternative protocols include the ‘Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents’ and the ‘Pre-action Protocol for Low Value Personal Injury (Employer’s Liability and Public Liability) Claims’. The management of these Protocol claims are supported by an online portal system.

The former protocol describes the behaviour the court expects of the parties prior to the start of proceedings where a claimant claims damages valued

calculation for this type of award, it is depends on the injuries sustained to the claimant and how long they are likely to last. The Court gives guidance under the Judicial College Board (JCB) Guidelines (12th edition) that categorises levels of award for certain types of injuries. These are intended as a broad guideline, to give assistance to the general award for a type of injury and its prognosis. Lawyers therefore tend to look at all the factors with the injuries sustained, including the severity, length and effect of the injury on the claimant. Special damages relate to monetary loss incurred by the claimant as a result of their accident, which can include loss of earnings, travel and medical expenses.

3. How do court proceedings operate in your jurisdiction and is

there a viable alternative?

Minster: They operate in a civil jurisdiction with a procedural code. The proceedings both in terms of liability and quantum are determined by a Judge alone. There are no jury awards in personal injury claims. The system is antiquated and the Courts have limited access to technology.Witness statements of evidence are prepared and exchanged in advance of trial. There is an adversarial system of

justice based on a common law system. Not many cases – less than 2% reach trial as most are settled beforehand due to the inherent risks of litigation and the amount of legal costs involved.

There is alternative dispute resolution (“ADR”) – formal and informal mediation and without prejudice settlement meetings (“JSM’S”) but these processes are not an alternative to Court proceedings. The Courts encourage the use of ADR wherever possible and most high value cases settle at a JSM.

Nesbit: We are in the England and Wales jurisdiction. A fee is paid to issue proceedings within three years of an accident and the court progresses within a reasonable period of time through Disclosure of documents and exchange of witness evidence until the final hearing is listed. This can take longer than it should due to how busy the courts currently are, sometime the complexity of the case, whether due to the injuries or on allegation of fraud cases. However the alternative is to Mediate. There has been some growth in this area in Personal injury cases and it represents significant savings in terms of time and costs to all parties. It is also helpful in that any decisions are made between the parties rather than the vagaries of any particular Judge.

Collier: Court proceedings in personal injury cases are governed by the Civil Procedure Rules with the overriding objective of enabling the courts to deal with cases justly and at proportionate cost. One of the ways in which this objective is achieved is by promoting the settlement of disputes outside of the courtroom in a process referred to as ‘Alternative Dispute Resolution’.

Alternative Dispute Resolution may take a number of forms including negotiation, mediation and arbitration. The Civil Procedure Rules also incorporate a number of Pre-Action Protocols for different types of Personal Injury claims with the aim of achieving settlement without the need for litigation. The term Pre-Action refers to the period before the Court becomes involved in the proceedings.

The ‘Pre-Action Protocol for Personal Injury Claims’ applies to all Personal Injury claims (except those claims covered by the Clinical Disputes and Disease and Illness Protocols). This protocol is primarily designed for those road traffic, tripping and slipping and accident at work cases which include an element of personal injury with a value of less than £25,000. However, the ‘cards on the table’ approach advocated

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it was being misapplied. It established a new test for relief of sanctions based upon seriousness or significance of the breach, which seemingly relaxed the position. The Court also commented upon the opportunistic tactics of parties, whereby it guided ‘heavy costs’ penalties for respondents who would unreasonably object to an application for relief.

Obiter given in the case of Coventry v Lawrence (No 2) [2014] UKSC 46 could have significant effects on costs in personal injury cases in the future. In this case The Supreme Court questioned the recoverability of a success fee and an ATE premium and indicated recoverability could constitute a breach of Article 6 (the right to a fair trial) of the European Convention on Human rights.

5. What trends are you expecting to see in the upcoming year?

Oliver: I would expect there to be an increase in “casualties” amongst those law firms whose business model revolved solely around lower value personal injury law as the work that they started before the referral fee ban and the reduced costs in newer cases starts to run out.

quite strictly at no more than £25,000 as a result of a personal injury sustained in a road traffic accident on or after 31 July 2013. The latter applies to employers’ liability and public liability claims valued between £1,000 and £25,000 where the accident occurred on or after 31 July 2013, and to employers’ liability disease claims where no letter of claim has been sent to the defendant prior to 31 July 2013.

The protocols are made up of three stages. Stage 1 involves the completion of a Claims Notification Form and liability is either accepted or denied. If liability is denied, the Claim is no longer suitable for the portal. Stage 2 involves establishing how much a claim is worth once liability is accepted with the aim of achieving settlement. If settlement cannot be reached then the parties enter Stage 3 which involves asking the Court to determine how much the claim is worth.

The common aims of these Protocols is to ensure that the defendant pays damages and costs using the process set out in the Protocol without the need for the claimant to start proceedings; damages are paid within a reasonable time; and the claimant’s legal representative receives the fixed costs at each appropriate stage.

If a satisfactory settlement cannot be achieved during the pre-action stage, proceedings will be commenced with the Court. 4. Have there been any significant

cases over the past 12 months?

Gacovino: Our firm is involved in various ongoing litigations across the country, including the defective products of transvaginal mesh, metal-on-metal hip replacements, Xarelto, and testosterone drugs. This past year we have taken a particular interest in a verdict out of South Dakota involving a woman who claimed that her ovarian cancer was linked to the talcum powder she used. The jury affirmed the link and declared that the company, Johnson & Johnson, should have warned of the risks. One expert testified that he believed there are as many as 10,000 cases of ovarian cases each year linked to talcum powder usage.

Collier: Starks v Chief Constable of Hertfordshire CA [2013] EWCA Civ 782 considered the issues relating to liability for road traffic accidents that occur at mini roundabouts. The Court of Appeal recognised that the apportionment exercise under the Law Reform (Contributory Negligence)

Act 1945 requires an assessment not only of the respective culpability of the two drivers but of the relative “casual potency” of their respective (culpable) acts and omissions. It concluded that both drivers had been seriously at fault in failing to properly appreciate what the other driver might do, however blame was apportioned against the Defendant at 65% King: The last 12 months has seen several significant cases which have evolved the personal injury landscape. The most noticeable which has affected civil litigation generally has been Mitchell MP v News Group Newspapers Ltd [2013] EWCA Civ 1537 whereby the Judge found that where a breach had occurred a sanction would stand unless it was shown that (a) a breach was trivial or (b) there was a good reason for it. The consequence of which was that a relief from sanctions was unlikely to be granted for even the most minor of breaches to Court procedure. The main consequence has been for lawyers to ensure absolutely and without excuse that each court direction and procedure was met with fear that relief from sanctions would not be granted upon a breach. The position was however appealed and retreated in Denton v TH White Ltd [2014] EWCA Civ 906. It led to clarification of the Mitchell ruling where

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Collier: It is a legal requirement for employers to take out employers’ liability insurance as soon as they become an employer. Most employers’ liability insurance policies cover legal costs and compensation due if an employee becomes ill or is injured as a result of the work that they do for them as standard, and can have optional extras such as professional indemnity, public liability and personal accident (for if the employer themselves sustains an injury). This insurance will indemnify them against the costs of their employees making claims for personal injury and can also cover if the HSE or the local government enforcement body bringing a prosecution due to an injury. They will be limited to paying their insurance premium, plus any policy excess (often none).

7. How valid are claims of a “compensation culture” caused by increased usage in personal injury

lawyers?

Gacovino: The concept of compensating people for their losses has been around for many thousands of years. People who have not felt the benefit of being represented by lawyers who help them recover losses will sometimes develop strong opinions that lead to notions that we live in a “compensation culture.”

As a result of the above there will be an increased number of former personal injury lawyers looking into other areas of law, such as clinical negligence which has already seen a surge in claims being advanced by lawyers unfamiliar with their new discipline. This in turn will probably lead HM Government to introduce more legislation to address the “problem” created by its previous reforms.Hopefully we will also see an increase in the enforcement activity by the relevant regulators of the referral fee ban so as to level the pitch for those already complying.

I would expect that the recent guidance given by the Court of Appeal in respect of the enforcement of the Jackson Reform sanctions will see a subsiding in the surge of satellite litigation caused by the Reforms and by the previous “Mitchell” guidance which was so clear and helpful that it seems everyone but the Court of Appeal misunderstood it.

I also expect that there will be an increasing tendency for defendants to make applications to try to get round the effects of Qualified One Way Costs Shifting. One would hope that judges would be slow to deny this to claimants but time will tell if that is the case.

There is also likely to be a continuation of the concentration of personal injury work into the control, direct or indirect, of the insurance industry through claims being passed to their panel or owned firms, third party capture and their vastly superior advertising budgets.

As a result of the limited costs payable to solicitors using the litigation portals, I would expect the average value of awards to claimants to start to fall as the incentive to argue for the proper level of compensation is reduced in a fixed fee situation.

Nesbit: Since the Jackson reforms in April 2013, in particular the lowering of costs, firms have gone one of two ways, either more specialist or more volume. For those that have taken the volume route, the skillset to deal with more complicated cases has devolved. So we are therefore expecting to see more law firms sending us their complicated allegation of fraud cases. Similarly on the Defendant side, it is seen as the Holy Grail to attempt or at least show an attempt to stamp out fraud, so we expect the number of allegations of fraud to increase.

Collier: The Low Value Personal Injury Portals have been introduced and now extend to all claims for personal injury in

Road Traffic Accidents, Public Liability and Employers Liability. Most claims where the value is less then £25,000 have to enter the portal process and the claim is dealt with online and is subject to fixed costs. Since the scope of the portal process was extended in July 2013 to EL and PL claims and the value increased to £25,000 we have seen an increase in submission of these types of claims and we expect this to continue over the upcoming year.

6. What insurance coverage should employers take out to safeguard

themselves against having to cover the cost for personal insurance

claims?

Minster: Employer’s Liability Insurance is compulsory in the UK and most of the insurers in the market offer a standard policy coverage for the particular business. It is a criminal offence not to take out a policy but this is rarely enforced. Due to the potential liability for damages and the strict Health & Safety laws in England & Wales it is recommended an employer takes out a policy to protect themselves. Due to reforms for low value claims the legal costs are now fixed at various levels when liability is admitted so the legal costs have now been reduced

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on relatively low margin but freely available claims, have been bankrupted by the changes.

In the case of road traffic accidents the fees were cut by over 60% at the same time as the level of damages to which the scheme applied was increased by 2.5 times. The rationale seems to have been that each claim cost the solicitor £700 to acquire by buying it or advertising so cutting the fee by that much would still leave the solicitor with a small profit. This of course begs the question of precisely how the solicitor can now obtain the work in the first place since the cut effectively amounts to a ban on advertising by solicitors.

The insurers “protected” by these changes of course are free to spend many millions on advertising their products.

Very little attention has been paid to a relatively new, but pernicious and dangerous, practice of insurers dubbed “third party capture”. In essence the insurer of the person at fault approaches the victim within hours of the accident using the details exchanged by the parties, and seeks to direct the victim to their own panel law firm for that firm to bring the claim against the insurer. There appears to be little or no regard to the conflict of interest that this

One somewhat popular perception is our court systems are burdened with frivolous lawsuits, and that some “lucky, griping cry-babies” are hitting the “lawsuit lotto.” This is not based on fact. Frivolous lawsuits are rarely taken on by an attorney, and large verdicts do not award big money to a tiny injury.

As we’ll touch on in a later question, claims that are not valid, whether false or exaggerated, are common but cannot be accepted as cases. Our own firm is generally compensated on a contingency fee, and so we cannot afford to spend the tens of thousands (or possibly hundreds of thousands) of dollars required to take a case from start to finish.

Personal injury attorneys depend on legitimate cases involving serious injury. We cannot afford to be involved with frivolous claims.

Oliver: There should in my view be a ban on Government Ministers trotting out the old canard about the “compensation culture” whenever discussing personal injury law. It is simply lazy of them and ignores the fact that the Government’s own investigation concluded that what exists is merely the perception of a compensation culture that does not in

fact exist.

Figures published by the Government agency the Compensation Recovery Unit (CRU) actually show that, with one or two exceptions the numbers of reported claims has actually fallen in the last 10 years though this inconvenient truth is ignored by the insurance industry and their friends in Government.

I would agree that accident victims are now more aware than used to be the case that they may be able to obtain compensation for their injury rather than suffering in silence. Though this is surely far from a bad thing?

In short, there is no compensation culture in England & Wales and claims that there is amount to a self-serving fiction by the insurance industry to try to increase their profits by making the bringing of a claim a shameful thing.

However, the perception of a compensation culture is a remarkably resilient one and this is helped neither by the gaudy adverts by claims management companies that focus on the amount of damages rather than the harm suffered by the victim nor by the extremely tacky and distasteful practice of some solicitors offering iPads and other inducements to new clients; it

is frankly bizarre that the Solicitors Regulation Authority decided not to ban that practice when the regulator of claims management companies decided that it brought them into disrepute!

Nesbit: In short they are simply untrue. All the evidence points to the fact that still more people than not DO NOT claim after an accident. A recent YouGov poll found that only 25% of people that have an accident actually claim. Furthermore the Portals that currently deal with the vast majority of personal injury claims hold a wealth of data, all of which show that claims are reducing rather than increasing. It is quite clearly a tabloid, insurer and politically driven myth, designed to support the agendas of those who are impacted the most.

8. What impact is likely to be felt by any attempts to curb this culture through legal changes, such as the

UK’s ban on referral fees for claims management companies?

Oliver: In the short term a large number of solicitors firms have ceased dealing with personal injury work, though this has been due to the ban on referral fees coupled the severe restrictions placed on the costs payable in “lower value” claims worth up to £25,000. Some firms, whose business model was based

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not unusual for our own firm to find ourselves rather far along in a case, only to discover that our client left out key facts that weaken the case. At that point, we must bow out.

Maybe what society needs is harsher punishment for people who bring false or exaggerate claims. Perhaps insurance companies should apply more scrutiny to claims that show signs of fraudulence.

Oliver: This is quite a hot topic as the Government has recently added an extremely poorly drafted clause into the Criminal Justice & Courts Bill in such a way as to limit parliamentary scrutiny and debate on its effect.

The clause would mean that where the claimant has been found to have been “fundamentally dishonest” about any aspect of his claim then the claim as a whole will be struck out. This sounds on its face to be reasonable but judges already have and use the perfectly adequate sanctions available to them in these circumstances to penalise dishonesty to an appropriate degree. Moreover the sanction proposed would be, as Lord Beecham the shadow justice spokesman pointed out, entirely one-sided as there is no proposal that dishonest defendants and insurers are penalised in any way. Also in what way

engenders but so far there are no plans to cut back on it.

In the longer term therefore I would consider that the main effect is likely to be that more of the control of the personal injury work will become concentrated in the hands of law firms directly owned by the leading insurers and those few law firms that are sufficiently cash rich to market for the work.

Nesbit: There has been significant impact in terms of number of claims presented and the number of claims management companies in the sector as a result on various changes carried out. In fact more than 1000 CMC’s have left the sector since the ban. Although with the number of models available to get round the ban available, it was actually the reduction in costs by 70% in straightforward road traffic accidents that caused those companies to leave. Nevertheless, despite the drop in number of claims and CMC’s the myth of “compensation culture” remains as high in the media and political agenda as ever before. This shows nothing more than the strength of the ABI (Association of British Insurers) lobbying power.

9. Are there any incentives for

personal injury lawyers to reduce this perceived “compensation culture”?

Gacovino: Yes. Attorneys who might choose to represent false or exaggerated claims would be endangering their reputation and careers. The cost of pursuing illegitimate cases will quickly drive a lawyer into bankruptcy.

The public often hears talk about “frivolous lawsuits,” but what few people realise is that truly frivolous lawsuits don’t bring in money. All the lawsuits that have been portrayed in newspapers as frivolous have been reported without the crucial details behind the verdicts. For example, with the notorious McDonald’s hot coffee lawsuit, the victim suffered third-degree burns that left her hospitalised for days. The doctors feared for her life. She originally asked McDonald’s to help with her hospital bills, but the corporation refused. She then resorted to the American legal system and ended up settling out of court.

All of this is to say that the notion of a “compensation culture” is out of line with what actually goes on inside our court systems. Yes, some frivolous lawsuits are occasionally filed. These tend to be thrown out of court immediately, and judges may choose to restrict attorneys

who file these types of cases repeatedly.

A few attorneys prefer to operate outside their local bar association’s rules. This tiny segment of the profession should not be used to make conclusions about the industry as a whole.

The vast majority of attorneys have worked hard to get where they are. Our firm takes pride in what we do, and we wish to continue protecting the rights of those who have been injured. Establishing a reputation as winners has required years of tenacity, honesty, hard work, and learning how to listen.

10. What safeguards can be put in place to prevent abuses of personal

injury law, including false or exaggerated claims? Do these claims have an effect on personal injury law

as a whole?

Gacovino: Currently it is up to competent personal injury lawyers to investigate the claims. As we’ve stated, false and exaggerated claims have no benefit to lawyers. Bad claims only waste everyone’s time and money, which is why they are dismissed as soon as possible. One of the most important skills a good personal injury lawyer acquires is to recognise when a claim does not deserve further attention. It’s

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recovery time required?

Nesbit: There is absolutely no correlation between the length of time it takes for someone to recover and the validity of that claim. With more severe injuries it is much easier to detect if there is any exaggeration, however with general soft tissue injuries like whiplash there remains no categorical test for determining whether or not someone has or has had whiplash symptoms. There is a vast amount of literature to confirm the likelihood of someone incurring injuries and the length of time it will take to recover and this is often used as a guideline to assist medical experts. As anyone who has actually suffered whiplash will tell you, it is not at all pleasant. The factors that are normally used to determine the validity of a claim tend to look at previous claims history, postcode, electoral roll information and despite claims from the Insurance sector to the contrary racial profiling.

King: There are a number of factors that should be taken into account regarding the validity of a personal injury, and this certainly does not solely depend on the Claimant’s length of recovery. All Claimants are different, whether it is the type of injury they sustain, the severity and/or any pre-existing conditions

is fundamental dishonesty different from mere dishonesty?

One obvious and simple way to address the fraud issue would be to ban the practice that insurers adopted as soon as the new litigation portals were introduced of making settlement offers without any medical evidence, the so-called pre-med offer. A greater invitation to fraudsters one could not imagine.

I also consider that all medical reports should be prepared with relevant medical records available to the doctor. Currently in RTA cases the presumption is that no records will be required unless requested specifically by the medic. Again, the potential screening out of claims where no complaint of injury has been made contemporaneously or where the injury was acquired in other circumstances has been removed to save on the small cost to insurers of paying claimant solicitors to obtain the records.

Another huge boost to screening out fraudulent claims would come from insurers making their fraud database freely available to claimant solicitors. This is something that insurers have been remarkably reluctant to do and from a personal perspective I wonder if

this is simply because many cases that they record as fraudulent are simply matters where a part of the claim was unsuccessful or was dropped, which is not of itself an indication of fraud.

On my wish list would also be the doing away of the litigation portals, which so limit the insurers’ time and incentive for investigation as themselves to be invitations to fraudsters and “have a go” claimants with no real cause of action.

Minster: No personal injury lawyer wants to act for someone who is bringing a false or exaggerated claim. In the end such a claim will fail and involve the lawyer in wasted time and costs. The safeguards already exist with the insurers using fraud databases and complex statistical analysis of road traffic accident reporting. The criminal law is dealing with such fraudsters by allowing private prosecutions and prosecution of fraud rings and staged accident rings by the Crown Prosecution Service.

To some extent a Claimant lawyer has to ask himself where has the claim come from and analyse whether there is a risk of fraud and be brave enough to turn away such claims.

In terms of exaggerated claims this is a more difficult area as one

person’s exaggeration could be down to a complication of their injury – particularly psychological injuries following on from pain syndromes. The law has dealt with this recently by disapplying Qualified One Way Costs shifting where there is a deliberate intention to exaggerate.

King: In my view, the way in which personal injury is marketed to the public has a significant impact on false and/or exaggerated claims being brought. The perception painted by advertisements is that bringing a claim is an easy way of making a few thousand pounds. Advertisements for personal injury services crowd daytime television commercial breaks and social media websites, serving as a constant reminder that compensation is available.

I have always felt uncomfortable about the notion that claimants can be offered an inducement for bringing a personal injury claim, such as a £2,000 cash advance on their damages or a free iPad. I am pleased that the Government intends to ban this, which will undoubtedly help to curb the number of fraudulent claims being brought.

11. Should a personal injury claim’s validity be connected to the length of

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Legal Aid is not available for the overwhelming majority of personal injury cases at all.

Damages Based Agreements (DBAs) are simply another form of CFA and these coupled with Qualified One Way Costs Shifting seem to me to be a precursor to a move towards a US-style system in injury claims where the insurer pays no costs to the claimant’s solicitor but damages therefore need to be much higher to allow the claimant to pay his legal team. That insurers seem to favour this system when US damages awards are universally regarded as ridiculously high makes me deeply suspicious of such a fundamental shift from the Common Law concept of “loser pays”.

Minster: For most people this is the only way they can fund the legal fees to pursue a claim and therefore gain access to personal injury lawyers. The other forms of funding are:-

(a) Before the event legal expenses insurance – taken out as add-ons to a motor policy or household contents policy. Means the client will get 100% of their damages.

(b) Trade Union funding – if a client is a member of a trade union – they

which have been affected due to the accident which caused their injury. It is therefore expected that there is a wide variation in the length of recovery in personal injury claims.

Notwithstanding, the validity in this area can be tested by two things: medical evidence and mitigation. Almost certainly, a medico-legal expert should be able to assess to what extent the Claimant’s symptoms are related to the action and to whether any injuries are being exaggerated or falsified. In addition, Claimants have a duty to ‘mitigate their loss’ to seek rehabilitation or treatment to keep recovery time to a reasonable minimum.

12. “No win no fee” agreements are coming under increased scrutiny lately. Are these agreements the

best method for improving access to personal injury lawyers?

Gacovino: If you want to reserve the courts for people with wealth, then you can have lawyers work on an hourly basis. There is no way for the average person to afford the amount of hours necessary for a typical case. In addition to the cost of the attorney’s time, personal injury cases are often complex and require many experts to verify the evidence.

The truth is that our current system encourages attorneys to serve clients who have legitimate claims. The attorneys shoulder the risk, to the benefit of the client.

Oliver: In the current circumstances I would have to say that conditional fee agreements (CFAs) are the optimal method for affording (I would not say improving) access to personal injury lawyers. I say this because of the paucity of alternative options now available, which I will consider below. I do not much like the reversion to the situation where a part of the damages is used to pay the lawyers’ success fees but can see the argument that it is probably positive for the claimant to have a “stake” in the process.

At the risk of stating the obvious, CFAs operate on the basis that the lawyer takes the risk that if the claim is unsuccessful then they do not get paid at all. For taking that risk, the lawyer is permitted to charge a “success fee” of up to 100% of their basic fees subject to the rider that the success fee must not exceed 25% inclusive of VAT of the damages. When first introduced the success fee was paid by the client but from around 2000 until 31 March 2013 the success fee was recovered from the Defendant

in addition to the basic fees. Following extensive lobbying by insurers, from 01 April 2013 the agreements have reverted to the success fee being aided by the client.

BTE or Before The Event legal expenses insurance taken out to afford access to free legal advice in the event of a claim would in theory offer a better solution but there are, probably insurmountable, problems with translating this into practice.

Firstly and obviously for it to make sense for the insurers it would need to be universal, and not everyone could afford it.

More importantly, from a personal perspective, the insurers would need to agree before such a system was introduced that they would finally abide by the ECJ’s decisions requiring them to afford their policyholders freedom of choice of their legal representatives rather than coercing them into using the insurer’s panel or owned firm.

Paying privately is an option only for the sufficiently well-off minority who do not mind the idea that they pay the lawyer whether then win or lose. They would in successful cases not pay the lawyer’s success fee.

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will fund the legal costs of meritorious claims

No Win No Fee agreements post 1st April 2013 involve the client sharing in some of the financial risk of the claim as the lawyers will now deduct their success fee from the client’s award of damages. This is limited to 25% of recoverable past losses and general damages.

Collier: These agreements are still the best method for providing access to personal injury lawyers, although it is now at a higher cost to the client.

A CFA, backed by an appropriate policy of Insurance, enables the client to bring a claim with little or no financial risk to themselves – if the claim is not successful claim, they will not pay anything. The risk is borne by the lawyers and the insurers.

If the claim is successful, the client must now contribute towards the costs, subject to a cap of 25% on General Damages and past losses. Most Claimants will also have an ATE insurance policy and they only have to pay the premium if their claim is successful. We are no longer able to recover the Insurance premium from the Defendants and this too is paid by the Claimant out of their damages.

King: On 1 April 2013, the impact of Conditional Fee Agreements (CFA), often referred to as “no win no fee” agreements, changed. Under a CFA, typically the lawyer would not charge the claimant for bringing a claim and in the event that the case was lost, there would be no fees payable for the work done by the claimant’s lawyers. If the claim were to succeed, the claimant lawyer would charge a success fee of up to 100%, which would be claimed from the defendant, in addition to the lawyer’s usual charges.

From April 2013, these success fees are no longer recoverable from the opposing party. CFAs are still permissible but now, if the lawyers charge a success fee, this will be paid by the claimant to the lawyer out of their damages (subject to a limit on how high the success fee can be and against which damages it can be paid from).

CFAs still currently provide the best route to personal injury lawyers for claimants looking to bring a claim for damages.

personal injury law 2014 · am one of 4 lead catastrophic injury solicitors based in the london...

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