Victory for the insurance lobby could hit future compensation claims (12/02/2010)

For many years, Claimants have been able to pursue their claims on a “no win no fee” basis and because the Claimant’s costs including the success fee and the insurance premium for the policy that is usually taken out to protect against the risk of having to pay the Defendant’s costs and their own expenses are presently recoverable from the unsuccessful Defendant, the system enables Claimants to receive full and proper compensation.

This, however, is likely to change following the recent publication of a report by Lord Jackson on the costs of civil litigation. He was asked to report because of a perception that the cost of claims is too high. The powerful and wealthy insurance lobby in this country has campaigned long and hard to limit what they have to pay successful Claimants so that they can maximise shareholder profits.

Lord Jackson has concluded that unsuccessful Defendants do pay too much in costs and it is a key recommendation in his report that the Claimant’s success fee and insurance premium should cease to be recoverable from the Defendant. It is a decision which I believe will restrict access to justice and leave most Claimants inadequately compensated.

I accept that Lord Jackson was faced with a difficult choice. Does he recommend changes that will substantially reduce the amount of costs which unsuccessful Defendants have to pay or does he recommend improvements to the current regime that will control costs but still allow Claimants access to justice and give them full compensation. Lord Jackson appears to believe that it is possible to reconcile these two aims. I disagree.

It does, however, seem that Lord Jackson recognizes that his recommendation will leave Claimant’s inadequately compensated because to offset the cost to Claimants, he proposes that unsuccessful Claimants should no longer have to pay the costs of successful Defendants (one way cost shifting) and that the amount of compensation awarded for injury should be increased by 10% across the board.

It is envisaged in the report that if the successful Defendant cannot recover their costs from the Claimant that there will be no need for the Claimant to purchase an insurance policy but this ignores the fact that the policy doesn’t’t just protect the unsuccessful Claimant from paying the successful Defendant’s costs, it also protects the unsuccessful Claimant from having to pay their own expenses incurred pursuing the claim such as medical report fees and court fees. These expenses can be quite substantial and in most cases the Claimant will still need to purchase insurance cover to protect against the risk of having to pay these expenses but in future, they will have to pay for the policy themselves out of their damages if they are successful or out of income or savings if they are not. I can see this deterring many Claimants from pursuing meritorious claims.

There are other potential problems associated with one way cost shifting. It will be qualified so if the Court decides that the Claimant has acted unreasonably then the power will exist to make a costs order against the Claimant. I don’t know what type of behavior by a Claimant would trigger a different costs order but I do know Defendants and I have no doubt that they will seize every opportunity to argue at the end of a case that the unsuccessful Claimant should pay at least part if not all of their costs. We are likely to see the argument that as the Claimant was unsuccessful, it must have been unreasonable for them to bring the claim in the first place.

Also, what happens if the unsuccessful Claimant’s financial situation changes in the future? Perhaps an inheritance or a lottery win. Are we going to see successful Defendants maintaining a database of Claimants who have brought unsuccessful claims with the aim of reviewing this regularly to determine if there is anyone they can pursue for their costs years later.

A prudent Claimant when faced with these possibilities may decide that the risk is too great to bear and not pursue their claim.

A modest increase of 10% in the level of damages will not offset the cost to the Claimant of paying the success fee and insurance premium (even if the level of success fee is capped) though in reality it is hard to imagine many firms marketing their services on the basis that Claimants will have to bear part of the cost of pursuing their claims through paying the success fee and it seems probable that firms will have to run cases on the basis that, expenses excepted, there will be no deduction from the Claimant’s damages.

Sadly, the inevitable consequence of this is that firms will only pursue claims with good prospects of success. Without the success fee, there is no financial incentive for firms to pursue difficult or risky claims. Cherry picking by firms will mean that many Claimants will be denied access to justice and that is why I must conclude that only the insurance industry will benefit through increased profitability if success fees and insurance premiums cease to be recoverable from unsuccessful defendants. They must be delighted that their lobbying on this issue has been entirely successful.

Scary times (22/09/2009)

For many years, elements of the insurance industry in this country have been telling us that greedy personal injury lawyers are responsible for ramping up the costs in personal injury claims. I am not naive and accept that there are probably a few solicitors who do not deal with cases as efficiently as they could in order to increase costs but the vast majority of us have only one aim and that is to obtain the maximum amount of compensation for our clients in the least amount of time. I do wonder if the insurance industry has its tongue firmly in its cheek when it talks about unscrupulous lawyers deliberately hiking up legal costs because it is my experience (over 22 years) that delay is quite often due to the insurance company not having the resources or will to respond to and deal with the claim within the time limits imposed by the courts. Sometimes, I suspect that the insurance company is hoping that my client will get fed up waiting and abandon the claim.

I am very familiar with the tactics adopted by some insurance companies to avoid liability and/or to avoid paying out the right amount of compensation so I can guide my clients through the process and ensure that their claim is pursued efficiently and effectively and that they are properly compensated at the end.

However, what happens if a claimant deals with the insurance company direct. It appears that Claimants are now being encouraged to do just this.

The insurance industry and those who promote and encourage this type of arrangement will say that the Claimant will get justice sooner, that it simplifies the whole process  and that it puts the Claimant in charge of their own affairs. These are laudable aims but will they be borne out in reality. I think not.

In my experience, you must have a level playing field with each side properly represented otherwise the Claimant will be at a significant disadvantage.

Most Claimants will not know whether they have a good or a bad claim and if they have to prepare and put forward their own case, how are they going to know whether a denial of liability made by the insurance company is correct. The door is wide open for insurance companies to reject good claims in the belief that the Claimant will not then take the matter any further. It is all very well to say that the Claimant can then go to a personal injury Solicitor for a second opinion but what about the time that has been wasted which could be months and perhaps even years making it more difficult for the Solicitor to pick up the pieces and pursue the claim. It is ironic that this type of arrangement could even lead to long delays which it is intended to avoid. 

Lets assume that liability is admitted. What happens next? i understand that the insurance company will obtain copies of the Claimants medical records and then make an offer of compensation. This is the part of the arrangement which scares me the most. How can an insurance company make an appropriate offer based on medical records only? The records will contain only the briefest detail about the injury(ies) suffered. There will be no opinion or prognosis (assessment of the future) and as an critical factor in deciding the appropriate level of damages is the length of time symptoms and disability will last, any offer made must be based on guess work. When an offer is made how will the Claimant know whether it is the right offer? There are guidelines which are published which give an indication of what an injury is worth but the guidelines themselves state that they are only a "starting point" and  they are only helpful if the person using them has full details of the type of injury(ies) suffered, the level of pain and disability, the treatment received, the length of time to recover or the extent of any ongoing pain and disability. This level of information will only be available from medical reports obtained in the claim and not from medical records only.

Compensation for injuries is only one part of the payment. A Claimant may have suffered loss of earnings, may have incurred out of pocket expenses and may have required care and support from family and friends. The Claimant is entitled to be compensated for all these losses but who will tell the Claimant that if they are not represented. Effectively you are relying on the insurance company to give the Claimant legal advice and that has to be a blatant conflict of interest. Insurance companies want to make money not spend it on claims and in my experience will always put their shareholders before Claimants 

If the Claimant discovers after they have settled their claim that the amount of compensation which they have accepted is too low, what can they do. I suspect that those who run schemes encouraging Claimants to deal directly with insurers will not be offering to make up the shortfall and I also suspect that the insurance company will hide behind the settlement and refuse to reopen the claim leaving the Claimant high and dry.

Perhaps I should start thinking about representing Claimants who have dealt with an insurance company direct and are unhappy about the outcome in claims against those promoting such schemes and the insurers themselves. Sadly, I think this may become a growing market.

Lucky lawyers! (02/09/2009)

It has been a few weeks since my last posting mainly because I have been kept busy with trials. It is always a little disappointing when a case ends up in court as it means that the Defendant has not been persuaded that the claimant has a good case and should receive compensation and it means that the Claimant has to be put throught the ordeal of giving evidence in court but when the claimants are all successful at court as has happened, I can tell you that the disappointment disappears straight away. Sometimes, I think being a lucky lawyer is worth as much as being a clever lawyer though its fair to say that you do make your own luck in this work.

I have now got to get my feet back on the ground and spend a few days catching up on dozens of emails and letters and returning phone calls.  

Welcome to the Paul Rooney Blog (29/07/2009)

Welcome to the Paul Rooney Partnership blog. 

I want to start by correcting a few popular misconceptions about personal injury lawyers.

As a personal injury lawyer, I am used to feeling under siege but in the last few months, it seems that even the Government has got in on the act and started listening to and believing the rhetoric of the powerful insurance lobby. I can only assume that they are hoping to deflect attention away from their failings elsewhere. Lawyers always have been and always will be an easy target.  According to certain elements of the media and the propaganda from the insurance industry, I am an "ambulance chaser" who is encouraging members of the public to pursue fraudulent claims whilst making a fortune at the same time. The truth is far less exciting and newsworthy. I am fortunate enough to enjoy a good standard of living though I had to spend 6 years of my life studying and working to qualify as a lawyer and then another 20+ years to get to my current position as a partner in a leading personal injury practice. I work long hours under a great deal of pressure. I do not fiddle my expenses nor do I squander other peoples money and then ask for a Government bail out. To my clients, I am a friend, an accountant, a medical expert, a benefits advisor, a social worker and finally a lawyer. My clients are genuine individuals who have been injured through no fault of their own and who need my help to make sure that insurance companies and their lawyers deal with their case fairly. Insurance companies want to see claimant lawyers taken out of the claims process so that they can deal directly with the claimant This would be a disaster. I have lost track of the number of occasions I have seen insurance companies make low offers to unrepresented  claimants in the hope that they can "buy the claim off cheaply". In my experience insurance companies have  little interest in justice or fairness and their motive in criticising personal injury lawyers is to minimise the amount that they have to pay out and maximise shareholder profits. Many of us know just how difficult it is to get an insurance company to pay out a genuine claim   If the insurance industry is genuinely concerned about the interests of victims then it should be ready to admit liability sooner in cases where their insured is obviously to blame. I like most personal injury lawyers have no interest in "dragging" out cases because my aim is to obtain the maximum compensation for my client in the shortest time.