Posts Tagged ‘costs

02
Dec
11

Anti #LASPO lobbying a mixed success

Around 2.30pm yesterday, my Legal Tweets twitter list gurgled into life with claims that the Legal Aid, Sentencing and Punishment of Offenders Bill, had  been delayed.

I also had a stream following the #LASPO hashtag and it quickly emerged with the news that a six month delay was indeed likely and that areas around how lawyers are contracted to do legal aid work were at the core of the bottleneck.

This followed a written ministerial statement from Justice Minister Ken Clarke, explaining that implementation of ‘all’ the highly controversial legal aid reforms currently going through parliament will be pushed back six months, from October 2012 to April 2013.

Having followed this story closely, I cannot help but think that in addition to the House of Lords debate of 21st November, that the sheer volume of lobbying from a committed and articulate opposition has had an effect. If only to maintain the status quo and keep legal aid on the relatively low budget upon which it currently operates for a further six months; the parties who involved themselves in the campaign against cuts have scored a small victory.

Some of the writing on the subject has been eloquent. This blog post from Simpson Millar managing partner Peter Watson illustrates a number of the least fair aspects of the LASPO bill as it stands. However, he was disappointed, saying as much on twitter this morning, to find out that Lord Justice Jackson’s proposed reforms of civil costs will probably march on unhindered. To their critics, LJ Jackson’s reforms will lead to a significant reduction in the accessibility of conditional fee agreements for claimants and as some believe it, a significant squeeze on access to justice.

Opponents may be just about out of time to push back against that particular juggernaut.

16
Nov
10

Media roundup – legal aid cuts and Jackson round 2

Justice Minister Kenneth Clarke went straight to the top of the news bulletins yesterday afternoon, as the government unveiled proposals to cut £350m from legal aid budgets and a second consultation into the Jackson report.  

It seems the Legal Action Group’s survey late last week fell on deaf ears and free legal advice is living on borrowed time. Kenneth Clarke delivered his address to the commons yesterday and the BBC has produced a useful overview of the announcement, although the mainstream media’s focus is primarily on the legal aid portion of the MOJ’s plan. Perhaps the most interesting angle comes from the Telegraph, which given its propensity to tackle MPs’ expenses claims, points out that they’ll no longer be able to get help defending themselves.

Radio 4 spent the vast majority of its air time re-quoting Law Society CEO Des Hudson’s question to Mr Clarke, “what if you are not rich or mighty? How will you get access to justice?” he said.

The Minister’s response was to point out what seems like an opportunity for the private sector and presumably legal expenses insurers. Mr Clarke answered that no-win-no-fee will apply in certain circumstances to those areas abandoned by civil legal aid under the proposals, namely divorce; clinical negligence and certain types of employment claims.

On the second issue of costs in civil litigation, the Association of Personal Injury Lawyers was quick to get its point of view across. The lion’s share of coverage from the insurance trade press revolves around Clarke’s fellow justice minister Jonathan Djanogly and his statement on costs recoverability. Insurance Times explains the key proposal to abolish recoverability on CFAs with interested parties invited to get their ten cents worth to the MOJ no later than Valentine’s Day 2011.

21
Oct
10

Insurance and legal roundup; fight over MOJ portal reignites

“It’s great, and so are we” say the insurers. “The system’s being abused and they’re taking advantage of it,” say the lawyers. Well which is it? Two very different angles about the the MOJ portal appear in today’s Post Mag and Law Soc Gazette.

Post Magazine: Majority wants MoJ RTA portal limit extended to £25 000

Allianz has proven the key to good PR is letting some journos see some stats. The insurer has put about 80% of its possible MOJ fast track claims up to 13th Sept, through the system according to one of their many claims gurus, Roy Hebburn at an event last week. This news was seen as a good opportunity to put a question to the audience in an interactive vote. In response, 60% of insurers said they want an extention of the fast track PI claims process, while 21% said no. The remainder weren’t sure. 

Law Society Gazette: Insurers accused of ‘abusing’ RTA scheme

Perhaps the insurance trade press and the legal press should just go head to head themselves. James Dean’s article on the progress of the MOJ portal paints a very different picture of how things are shaping up. He’s using the Motor Accident Solicitors Society (which has been busy quelling ‘myths’ about the compensation culture for weeks/years/forever) as his source to report that “insurers are instructing their own panel firms to submit victims’ claims to them throught he portal – even where the victim has already chosen another firm to represent them.” In addition to accusations that insurers were “repeatedly failing to respond to claims within the timescales laid down by the MOJ”, MASS said it was going to file complaints to the Solicitors Regulation Authority and the portal administrators if the ‘abuses’ become widespread.

Interestingly, he said he already had ‘anecdotal’ evidence of the abuse. I heard an anecdote once. It was rubbish.

Post Magazine: Lord Young rebuffs Arag and promises action

Ever the politician, Lord Young has spoken directly to the trade press this week and emphasised that ‘the other lot’ are not running the show any more. He seems to be up for a scrap as he namedrops LEI insurer Arag which accused him the week before of creating the report to make political gains.

Post Magazine: Premium increases not claims farming solution

Martin Milliner, head of operational claims at LV= was scratching around for an answer to that which has so vexed Lord Young, above. However he did make some (not necessarily new) suggestions outside of saying, ‘ner ner, we’re in charge now so you can’t play any more’. Central to Milliner’s suggestions were options such as whether injury claimants should be dealt with by their own insurer; “should there be a fixed tarrif on damages? We are not evenly matched. Insurers have to roll with the punches, the legislation is too thin and the controls around claims farming are too weak,” he said. He couldn’t resist a small battle cry though – “for me the war is only just beginning.”

 

02
Feb
10

Employers risk DDA claims under new ‘Fit Note’ rules

No surprise as it’s been on the way for a while but the Department for Work and Pensions has decreed that GPs’ sick notes are to be replaced by ‘fit notes’ from 6 April 2010.

The DWP’s formal response to consultation says the new format notes will contain two options: either ‘unfit for work’ or ‘may be fit for work taking account of the following advice’. This seems a bit of a step back from saying someone who has been off sick is fit to work and will likely mean more discussion between employer and employee as to whether the latter is fit enough to return to some form of work, and whether the employer will be able to make any necessary adjustments. It could well make life more onerous for employers.

Eversheds partner Simon Rice-Birchall said: “Whether the new approach succeeds will depend, to a large extent, on how well GPs adapt to using the form. The DWP says it will be issuing guidance for doctors on the new medical statement and there will also be specific guidance for employers, although no publication date has been given.

“Employers will need to look carefully at how they manage sickness absence. Those with carefully considered return-to-work programmes will be better placed to benefit from the new regime. In contrast, employers who fail to engage with the new approach could find themselves at an increased risk of disability discrimination claims. This is because a new style report might highlight changes that an employer could make to the employee’s duties or workplace that would help them return to work sooner.”

Beachcroft partner Rachel Dineley added: “In its response the government has recognised that it is not the doctor, but the employer, in consultation with the employee, who is best placed to make the decision as to whether they can accommodate any changes to facilitate a return to work. It encourages employers to initiate discussions with their employees. If an employer is not able to facilitate a change or adjustment the GP’s advice on the statement will be evidence that an individual has a condition which prevents them carrying out their current role. Employers who work with occupational health practitioners may disagree with the GP’s advice. If the employee’s condition constitutes a disability, under the Disability Discrimination Act – to be replaced with provisions in the Equality Bill, currently going through Parliament – the employer will have a duty to make reasonable adjustments in any event.”

Court of Appeal issues major TUPE ruling

The Court of Appeal has given its decision in Alemo-Herron and others v Parkwood Leisure Limited. This overturned an earlier Employment Appeal tribunal (EAT) decision in favour of the employees, and restored the Employment Tribunal’s original decision in favour of the employer. The ruling can be seen as applying common sense to cases where employers have inherited staff under transfer of employment terms and find themselves bound by national pay agreements in which they play no role.

The case involved 23 claimants, represented by Unison, who had been employed by the London Borough of Lewisham’s Leisure Department until 2002, when the department was outsourced to private company CCL and their employment contracts were protected under TUPE. The employees switched employers again after a further TUPE transfer in 2004 from CCL to Parkwood Leisure. Because the employees’ employment contracts provided that their terms and conditions were in accordance with collective agreements negotiated by the National Joint Council for Local Government Services, the question was whether Parkwood, was bound by pay increases agreed between the NJC and the trade unions after Parkwood had become the employer.

Charles Newman, TUPE expert at Beachcroft LLP, said: “This case will come as a welcome relief for private sector employers who take on outsourced contracts. They will not be bound by future pay increases negotiated after a TUPE transfer by the former public sector employer rather than them.

“TUPE is a particularly complex area for employers, and the EAT decision in this case had highlighted just how some TUPE decisions can lead to unfortunate results in practice from a commercial point of view. The EAT decision had decided that if a private sector employer inherited a workforce under TUPE that had had the benefit of trade union negotiated pay rises under a national collective agreement, the new employer could still be bound in the future by future negotiations between the old employer and the trade unions – even though the new employer would not be a party to those negotiations, and would have no input into them whatsoever.”

Contingency fees ceiling to be raised

The Damages Based Agreements Regulations 2010 have now been finalised and come into force on 6th April 2010 reported Daniel Barnett’s employment law newsletter. The cap on contingency fees, provisionally set at 25% when the consultation paper went out in December, has been raised to 35%.

Contingency fees are based on a percentage of money recovered and are not to be confused with conditional fees commonly known as ‘no-win, no-fee’, where the representative charges a base-fee plus an uplift if they win the case.

Stir-fryer stirs it up in Evesham

A stir-fryer’s claim for compensation for alleged unfair dismissal failed at the Birmingham employment tribunal last week – and cast doubts over what constitutes a rude one-fingered gesture. Mohammed Barham lost his compensation claim for unfair dismissal at Birmingham Employment Tribunal against Kanes Foods Ltd. He alleged there was a conspiracy against him. But manager Michael Sutton denied the conspiracy allegation and said Barham had been dismissed for misconduct following several incidents. These included allegedly refusing to clear debris from the floor after Barham claimed it was not his job. He was also accused of being aggressive. He was alleged to have dropped a crate and was later accused of making a one finger sign to a manager which the management regarded as rude. After he was given a final warning about his behaviour, he was eventually dismissed. Barham denied he made a finger sign and said he used his thumb to indicate to the manager that everything was fine. Well that’s one for the video referee I would say.

28
Jan
10

Post Mag news roundup

Asbestos claims to cost insurers £11bn by 2010

I had to re-read the Insurance Times article on this topic because its headline read ‘£11bn by 2050’. So which is it?

Both articles quote the same research and detail the same figures from the Actuarial Profession’s UK Asbestos Working Party, which said that ‘undiscounted claims to the insurance market for asbestos could reach £11bn for the period 2009 to 2050.

So not ‘by 2010’ then.

 Axa Strikes personal injury first with CEDR

Axa insurance has become the first insurer to sign up to the Centre for Effective Dispute Resolution’s personal injury service.

The service is aimed at small claims and offers phone (£145) and face to face (<£700) mediation and according to this story, Axa has been trialling its use since June last year. The piece cites ‘average costs’ for a litigated case to be £30 000 – £70 000, but I get the feeling the CEDR said that.

DAS to cut temporary staff after loss

Getting some good news out quickly after the legal expenses insurer’s hellfire that was the Jackson Review must have been top of DAS’ priorities. A software deal could save the company £1.75m a year apparently, but there is the small amount of chopping 30 temps from its call centres which may have a more believable impact on its bottom line.  

Scots take English referrals

A Scottish claims management company has seen a 40% increase in personal injury claim referrals from English firms as a result of a proliferation of television advertising. Accident Claims Scotland said it had received over 1100 referrals from England in 2009 as opposed to 750 the year before. English firms are apparently receiving enquiries from Scottish claimants encouraged by advertising broadcast for an audience south of the border.

Irish personal injury claims down 6% on 2008

Compensation totalling 200m Euros was awarded in respect of 8645 PI claims in 2009 according to the Irish Personal Injuries Assessment Board. The average settlement was 23 263 Euros, 6% down on 2008 but 5% higher than the 2007 average.

27
Jan
10

Readallaboutit – Insurance Times news roundup

Gallagher gets hand on £18m jewellers’ block account

After Marsh bought HSBC Brokers, some key accounts have inevitably begun to leak out what with the staff moving on. This one sees two guys taking their $12m of premium for a book of jewellery and pawnshop business over to AJ Gallagher, so that broker now controls the whole kit and kaboodle.

After last week’s sterling effort to spice up the Jackson review with a Wild West theme, I’m rather disappointed that this scoop failed to include some kind of reference to a ‘heist’.

Nevertheless, it’s a good story and the type that will be embarrassing to the losers while the winners relax and sit back on a nice pot of money. It’s not about ‘strategy’, ‘goals’, ‘aims’ or ‘plans’, which are so often the bread and butter of the business media and it’s a shame there’s not more like this to go around.

ABI to review Jackson in February

The ABI’s high level group on personal injury will discuss the Jackson review at its next meeting, according to Insurance Times, presumably for a spot of backslapping.

A spokesman for the Ministry of Justice admitted there was no timetable for a detailed government response to the numerous recommendations.

New estimates say asbestosis claims will reach £11bn by 2050

The statistic which struck me most is buried at the bottom of this article. In 2004, one third of mesothelioma sufferers made a claim. In 2009, this proportion had doubled.

The Actuarial Profession’s UK Working party has gone against received wisdom that there would be a peak in or around 2015. The working party’s chairman, Brian Gravelsons, said: “Insurers will of course have already noticed the increased number of claims from mesothelioma sufferers.

“There is still considerable uncertainty surrounding the future cost of asbestos claims, as the number of people who will be diagnosed with mesothelioma many years into the future cannot be accurately predicted.”

Conservatives’ Hoban tells Lloyd’s: ‘We will shut the FSA’

The Tories will dismantle the FSA if elected, giving the Bank of England the rule over prudential and solvency risk, with the Consumer Protection Agency regulating brokers, IFAs and businesses with a lower balance sheet risk.

This announcement was made at Lloyd’s of London by Mark Hoban MP. Without sticking my own flag too deep in the ground, this made me chuckle a bit as there’s no better place than Lloyd’s for a spot of barrel-chested Tory rabble rousing.

20
Jan
10

Readallaboutit – Insurance Times news roundup

JACKSON REVIEW COVERAGE

IT’s coverage is very good. It is comprehensive and makes an otherwise dull subject as exciting as possible with a wild west theme!

DAS awaits new law before snapping up stake in solicitors

Legal expenses insurers have come out fighting from the Jackson review after their core business was challenged. Saxon East’s story in IT this week says firms including DAS are ‘poised’ to buy stakes in solicitor firms once the Legal Services Act comes into force.

DAS boss Paul Asplin gave the following snippets:

  • “Referral fee ban is ‘nonsense’”
  • “Defendant insurers won’t buy lawyers cos they can get cheap rates now”
  • “Legal Services Act is ‘taking too long’”

Jackson proposes scrapping of ‘abhorrent’ referral fees

Jack Straw called referral fees ‘abhorrent’ so did LJ Jackson. This round-up piece asks some likely suspects what they think so here’s a mini-roundup for you.

David Williams – Claims manager, Axa

  • “Reforms must not be diluted”
  • “progress will take years’”

Roy Hebburn – technical claims manager, Allianz

  • “‘Removal of referral fees & non-recoverability of success fees are crucial recommendations”
  • “Insurers shouldn’t flinch at 10% uplift”
  • (my favourite) “Insurers can return to an environment of underwriting-led pricing, untainted by non-risk income.’ Did anyone ever publish how much money was being made by accepting referral fees? What kind of a dent will it make in their bottom line?

Peter Staddon – British Insurance Brokers’ Association head of technical services

  • “Philosophical – the money’s important but it’s not the be all and end all”

OTHER NEWS

Zurich Pledges 20% increase in motor

Following on from EMB suggesting last week that motor rates will have to increase by 20% to cut insurers’ combined ratio down from a whopping 115%, Zurich is promising to do exactly that. Who needs actuaries!

Zurich’s CEO Stephen Lewis says he’s seen a 30% increase in bodily injury claims frequency with a worsening trend throughout 2009. This combined with high inflation has resulted in a 50% increase in cost of recovery.

Litcomp gains new owner and £200m capital injection

Some fairly canny timing here given Jackson coverage. Litcomp wrote £28m in ATE premium last year, so now with some new private equity money – up to £200m – it’s planning to expand into Professional Indemnity, pet and warranty insurance.

Insurers lead the fight against plaques ruling

Axa, RSA, Aviva and Zurich have lodged an appeal against the Court of Session in Edinburgh after it upheld the Damages (Asbestos-related Conditions) (Scotland) Bill. Pleural Plaques are symptomless, yes they are, no they aren’t. You get it. Oh, and the Westminster meeting between MPs and Gordon Brown has been delayed without a new schedule yet.

Apologies – lost the will to live on that one…

14
Jan
10

Jackson review-athon; what people are saying about it…

Today, the Jackson review recommendations were published and I’d be a rich man if I had a penny for every ten cents put in on this subject. That’s a trans-atlantic metaphor, if ever there was one…

Forum of Insurance Lawyers:  ”If all of the proposals come into effect it will usher in a new era for civil litigation. The proposals to give claimants an economic interest in the bringing of claims is very welcome”

Association of Personal Injury Lawyers:  “Under Sir Rupert’s proposals for one-way costs shifting, the claimant will either pay for an insurance premium out of his damages, or risk paying for expenses such as medical reports and court fees if he loses the claim. None of this is the case under the current system which works on the ‘polluter pays’ principle.

Nichola Evans, Browne Jacobson: “Lord Justice Jackson has recognised in recent years that in personal injury litigation claimants effectively litigate risk free with there being no costs consequences to them…”

The Lord Chief Justice: “The judiciary has been concerned for some time that the costs of civil litigation are disproportionate and excessive. Lord Justice Jackson’s fundamental review addresses these questions head on. I am extremely grateful to him for the enormous work and effort that he has brought to bear on this important, complex issue and for proposals which for the first time address the issue of costs as a comprehensive coherent whole.”

Alexandra Anderson, RPC “Whilst, under the proposals, insurers will no longer foot the bill for a successful claimant’s inflated costs, defendants (and their insurers) may be forced to settle unmeritorious claims, because they may not be able to recover costs from a claimant who brings an action that fails.”

Philippa Hayes, Halliwells: “General damages will rise slightly, but that increase will in no way match the cost of the success fee and ATE premium, to be taken out of the equation. Claimant solicitors would no longer be able to argue that their hourly rates are higher than those of the defendant insurers’ due to the necessary payment of referral fees.”

21
Dec
09

Do these figures speak for themselves?

Any article with a headline that begins ‘lawyers cash in…’ elicits a sigh or a wry smile from most people. Everyone knows that lawyers always get paid in the end and Dickens showed us this in Bleak House – thank god for the BBC version.
To a large extent this story by Rosa Prince is absolutely right, legal fees have formed an ever larger part of the overall compensation bill for civil litigation since the Woolf reforms which removed personal injury claims from the legal aid process aside from one or two exceptions.
I suppose the difference now is we are heading towards election year so the Conservatives have ‘revealed’ these stats to the Telegraph.
I’m not niave enough to ask why the Telegraph would write a piece like this; their agenda is clear. But there is some ignorance of the wider picture which places this story into question and makes it easy to pick holes in so that’s what I’m going to do.
The numbers are staggering and not without precedent; One in five claims against the NHS results in ‘the lawyers’ receiving more ‘compensation’ (fees) than the actual claimant. Yup, that’s right and it’s a fact across the wider personal injury system too; frequently insurers find themselves liable for costs that vastly exceed the damages awarded to claimants.
Nevertheless, this report pays John Major-sized lip service to the work being carried out to mitigate the problem. It chooses instead to report how this would never have happened under the tories, rather than pointing to the review of civil justice costs currently underway by Lord Justice Jackson, or the ongoing Ministry of Justice review of personal injury claims reform which will see a new fixed costs regime introduced for road traffic accidents.
The fact is lawyers are making hay while the sun shines and no one can blame them for that. The market enabling them to rack up these costs was instigated originally under the Major government anyway so that the burden of civil legal aid could be removed from the taxpayer. Pot/Kettle/Black?
These statistics are compelling and it’s right to take issue with a system that is clearly under pressure from a cohort that knows how to extract cost while providing little value in return.
I have pointed out two major reviews/reforms that are currently underway and were ignored in this article. So what is the opposition’s silver bullet? ‘A fact finding process to avoid litigation’. I know we don’t want to get bogged down by detail, but that’s pathetic.




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