Seven MPs stand up against PI upheaval
MPs have called on the government to halt personal injury law reforms amidst ‘deep concern’ at the pace and extent of change.
An early day motion in the House of Commons, signed by seven MPs so far from Labour and the Liberal Democrats, calls for the government to carry out an impact assessment of the Jackson reforms before considering any more upheaval.
Their call comes in the week the Ministry of Justice closes its consultation on the small-claims court limit, which is proposed to rise from £1,000 to £5,000. Today is the last day to submit responses.
The increase would effectively eliminate lawyers from the RTA claims process and leave victims unrepresented and relying on insurers to make fair offers of compensation.
The early day motion, sponsored by Bolton North East MP David Crausby, is the first sign that politicians have reservations about the small-claims limit proposal.
The motion ‘acknowledges the need to cut costs in the legal system but urges the government to ensure that this is not at the expense of innocent accident victims’.
It adds that the changes will ‘fundamentally change civil litigation in the UK and alter the balance between claimants and defendants; further [the House] believes that impact assessments on the individual, piecemeal reforms are insufficient and will not demonstrate the cumulative impact of all of the changes on those seeking justice.’
The motion is unlikely to lead to a parliamentary debate but opens a new channel to voice concerns about the speed of change.
The government consultation, on reducing the number and cost of whiplash claims, comes at a time when RTA personal injury lawyers are preparing to take a £700 cut in the fixed recoverable fees they can claim through the portal.
As well as raising the small-claims limit, the consultation looks at the creation of independent medical panels to support better diagnosis of whiplash injuries.
Comments
who are the other MP's to
who are the other MP's to sign John?
Campbell, Ronnie Labour
Campbell, Ronnie
Labour Party
Blyth Valley
Caton, Martin
Labour Party
Gower
Crausby, David
Labour Party
Bolton North East
George, Andrew
Liberal Democrats
St Ives
Meale, Alan
Labour Party
Mansfield
Riordan, Linda
Labour Party
Halifax
Russell, Bob
Liberal Democrats
Colchester
In other words, MPs whose
In other words, MPs whose constituents are in less affluent areas and most likely to be affected by the changes.
This is how democracy is actually supposed to work.
Possibly other MPs could take note-instead of blindly following the party line in the hope of promotion.
Great idea. That would
Great idea. That would actually end most politicians' careers, which would be a victory for the citizenry, democracy, and for truth. Seriously. As I've said before, make politics like jury service.
But surely you must recognise that politics is the latest private sector industry, booming too, I hear. The House of Commons is being bought out by Roman Abramovich next week.
Represented. But by whom?
"The increase would effectively eliminate lawyers from the RTA claims process and leave victims unrepresented and relying on insurers to make fair offers of compensation"
This is not strictly correct. What will happen is that CMCs will inherit the space vacated by solicitors and charge 25% under a DBA. CMCs doing PPI claims are already set up for this and need only minimal changes to adapt to PI under the new rules.
The consumer (formerly known as clients) will therefore receive "legal advice" from organisations that are less qualified, less regulated and less insured than solicitors and where it is impossible to sue for prof negligence if it goes wrong.
DG - will CMC's be allowed to
DG - will CMC's be allowed to use the portal then as they are currently excluded from the RTA portal - arent they?
As I understand it CMCs and
As I understand it CMCs and LIPs can't use the portal, but I didn't mention the portal in my initial post.
Too little, too late
Talk about closing the stable door after the horse has bolted... DG's analysis above is correct and now that these events have been set in motion it will be far too late to stop them.
25%?
I thought it was just Solicitors Practises that were restircted to a maximum of 25% on DBAs and I think CMCs can charge up to 50%
Horse and bolted ....... talk
Horse and bolted ....... talk about After the Event ... sorry about the pun.
50% is correct, my
50% is correct, my apologies.
lol @ James After The Event
lol @ James After The Event now that has just made me laugh.
"In other words, MPs whose
"In other words, MPs whose constituents are in less affluent areas and most likely to be affected by the changes"
Why would there be more claimants in less affluent areas???
Easy
Easy. They work in blue collar environments where health and safety is lax due to their employers cutting corners to try and make a buck in these hard times.
Exactly!
Exactly!
And the less affluent
And the less affluent Claimant is probably more likely than ever to make a claim because they need the money. I'd say that this is more likely to be the reason behind the increased level of PI claims being made over the last few years.
..because they need the money..
Wow. Now there is a sweeping statement, you should be in Parliament sir, you're a natural!
Speaking as a 'less affluent' claimant with an actual REAL claim to answer, I would like to personally thank you on behalf of all the other REAL claimants that will be affected attitudes such as this.
Perhaps if people had not had it rammed down their throats in TV and radio commercials every day by the myriad of specialist solicitors then there would be less claims I agree, but to paint all with the same brush is unprofessional to say the least.
Two points
CMC's conduct PI work are required to have PII.
Less affluent people are by definition less likely to have BTE and therefore at greater disadvantage once the changes take effect.
How will the CMC's get access
How will the CMC's get access to the portal annon - i understand they are currently excluded from the RTA portal - is the extended portal going to be open for CMC's and LIP's ?
Will they even need to be regulated as a cmc?
If a CMC is not referring to cases to anyone then my understanding is that they don't need to be regulated. If no regulation then no need to have PII cover then no recourse in the event of a cock up.
With regards to the portal, is it mandatory or can they just send a letter of claim through the post. Genuine question?
Two points
CMC's conducting PI work are required to have PII.
Less affluent people are by definition less likely to have BTE and therefore at greater disadvantage once the changes take effect.
The real cost....
What's the real cost here? Surely if the small claims limit increases and CMC's fill the gap for the LV RTA's then isn't it likely those will settle pre-med? What about those Claimants who continue to undergo NHS treatment or receive ongoing state benefits because their symptoms did not resolve? What happens with the CRU recovery? Notwithstanding the impact, financially or otherwise on the Claimant, has anyone thought about the full financial impact here?
Too little, too late?
Too little, too late?
CMCs
Raising the small claims limit would be catastrophic, no doubt. I also agree that CMCs will get in on the act in representing unsuspecting Claimants. But nothing stops Solicitors competing with CMCs as far as I am aware. We can run small claims matters on a DBA and charge 25%. In some cases we will actually be better off; a £4,000 RTA will net us £500 from April, whereas we could charge £1,000 if the small claims limit is increased.
The problem comes with liability denials; the costs stay at £1,000, even if we win at trial. I would like to see a CMC litigate a matter for a client for that price and attempt a cross-examination in a small claims trial!
But in the cases where we may
But in the cases where we may be better off then no doubt we'll be open to arguments that we'd should have run the case on a DBA rather than a CFA or vice versa.
Any option that involves taking money off the client will leave us open to claims of negligence - It'll end up as a whole new claims industry as per the PPI claims.
This is a bit like PPI claims
This is a bit like PPI claims why would a claimant give up 25% of his damages to a CMC, or a Solicitor, when they could claim direct from the insurer and recovery, in theory anyway, 100% of their damages?
If say 50% of claimant go the direct route, 25% via CMC's that just leaves 25% for solicitors or a quarter of the present work. Even if claimant number don't drop if they do there will be virtually no work left for the estimated 20,000 PI solicitors employed at present who must be mainly dealing with whiplash claims?.
Only seven...!
so about 99 per cent of MPs are content...
Only 7
Only 7 out of how many. That's a poor show.
Lobby Andy Slaughter
anyone with anything to lose must lobby Andy Slaughter and Rob Flello.
Top Class is right
If the claim limit goes up to £5000 its curtains really. Think about it. If an insurance company offers £2000 up front them why would you go the hassle of paperwork, small claims court, LIP nonsense, taking time for the case to come round, updates, wrangling etc to then get £3500 out of which £1000 will go to costs. i.e left with £2500. Most will take the money and run, its far easier quicker and less hassle.
PI is alien teritory for me:
PI is alien teritory for me: thankfully! But Anon's post causes me to wonder how one would advise a client who sought advice whether the offer he'd received from the insurer in response to his claim was adequate. And how one conscientiously managed the inevitable conflict between the client's interest and that of the adviser. By explaining the analysis that Anon has set out?
PPI
By using previous case law and the JSB guidelines, although if a claimant wanted to settle for £2000 after 6 months it would be hard to convince them they should wait and make sure they did recover as forecast as, if not, they might get £3000 plus.
Conflict
In a sense, there's always a conflict of interests where costs are concerned: the client wants to pay the minimum and the solicitor would like to earn as much as possible. PI work is no different from any other form of litigation on that front; the solicitor deals with it by advising on likely costs and by providing a costs/benefit analysis. It is then for the client to weigh things up and decide whether to take what the insurer has offered or press on in the hope of an increased offer.
On the face of it, there may be a market for solicitors who offer a fixed-fee "don't accept the insurer's offer until we've looked at the merits and value of your claim" service. Obviously, the fixed fee would have to be set a low level, with the result that the service would only be profitable if done in high volumes by very junior fee-earners, on the basis of a quick and cheap medical report.
It occurs to me that LIPs could be told (through a campaign by the Law Society/Bar Council/CABs) to request an extension of time for accepting any Part 36 offer which an insurer makes. Insurers could not sensibly refuse such a request (if it is put forward on the grounds that the trial is not imminent and that the LIP wishes to think about seeking legal advice) and the extra time would allow the LIP to obtain a solicitor's initial view on merits/quantum.
The problem with any of the
The problem with any of the above scenarios is 3rd party capture in the majority of cases. All LVI will get captured and settled for £1000-1500. Most claimants know when injuries are relatively non serious and will recover in 6-8 weeks they will take the money and run, why undergo asking a solicitor about quantum, medical report etc etc it really won't be worth the hassle and then paying a fee for it?? Forget it.
With Cases above this amount TP capture will involve offering a reasonable amount with a warning that taking legal advice is expensive and a protracted case will suffer costs which may reduce the amount of compensation to below what is now being offered. To prove their point all they have to do is deny liability drag the case on and your costs will go up, game over. Again claimants are more likely to take the money and run after all what is difference between £2000 right now and £2500 maybe in 6 months might be less don't know.
If the claims limit does up most PI departments will be 1/10th of the size only dealing with higher value cases
Small Claims on the portal
The portal doesn't apply to small claims so am I correct in saying if the limit goes up to £5000, we won't need to use the portal for claims under £5,000? There is no protocol for such claims so a simple letter of claim from a Solicitor or CMC would do.
Conflicts and Profits
Perhaps if the majority of firms that have failed since 2005 to obtain any authorisation from the FSA in respect of 'assisting in the administration and performance of a contract of insurance' then they would have found Informed Consent will often overcome such conflicts, potential or real?
But then again, with so many PI Claims Churners failing to ever actually consider the client as they should where they equally rarely it seems have ever obtained the appropriate training and authorisations (FSA) to operate legitimate Claims Handling where the Exempt Professions Register ends and full authorisations begins?
Perhaps One Liability remarketing into something else after FSA authorisations were gained may be a pointer to the next round of scandals correction litigation against what many feel has been the plethora of less than able PI traders?
With it seems so many law firms paying upwards of £25,000.00 a pot to have others make unsolicited cold calls to consumers where their contact data has been gleaned from the consumer obtaining a quote for motor insurance where they were unable to confirm 3 years plus no-claims history it may be that such data traders often considered to be mis-using consumers data and their paymasters (quite a few law firms?) may well have unwelcomed ICO interests albeit the SRA appears to ignore much of such conduct as it usually likes to see the backside of a horse and then close the gate?
Your post
Hi Roland, I can't make any sense of your post. It that me or is it you?
PORTAL - MP INTERVENTION
Seriously, nobody should stand back and watch this industry be demolished by a bunch of idiots like Cameron and Co. For god sake fight these changes rather than role over a die. If we all lobbied our MP''s there would be hell raised and these proposals stopped. Do nothing and watch Rome burn.
Get a life and do what we know best and fight. This time its a fight for our future. The fight of our lives.
Conflict and profits
Solicitors have been trained in the business of not putting their interests ahead of the interests of their clients. Insurers have not and never do. There's no doubt someone amongst us will find a way of sorting this out so clients can continue to get advice but the clients will suffer because the costs have to come from somewhere.
Back in 1974 I had a lady come to see me to get advised on a settlement offered by an insurer. Her pharmacist had given her the wrong drug - she had glaucoma and the eye drops he gave her made the condition so much worse that she lost the sight of one eye and was almost blind in the other. The insurer had dealt with her direct and had got her to agree to accept £1,200. They told her to have the agreement countersigned by an independent solicitor which is how she arrived in my office. Needless to say she didn't sign and, a year or so later she recovered substantially more that they had told her was the 'correct' amount.She subsequently went blind. They didn't call it 3rd Part capture in those days but the motivation was the same.
Insurers are not remotely interested in ethics. Profit is their only guiding light (and it seems those in government, along with Jackson, are their altar boys)!
EARLY DAY MOTION
More shoulders to the wheel.....Now there are 18.
http://www.parliament.uk/business/publications/business-papers/commons/early-day-motions/edm-detail1/?session=2012-13&edmnumber=1140