15 February 2013

Cyclists: access to justice is about to get a whole lot harder

Here is our letter to the editor of the London Cyclist ( published by the London Cycling Campaign):  

14 February 2013

Dear John,


Ashok Sinha’s “Opinion” in the February/March issue of London Cyclist examines insulting verdicts for cyclists in criminal prosecutions of those who have caused injury to cyclists.

Of equal concern is the loss of protection which changes in the civil law will inflict upon injured cyclists, among other accident victims, from April this year.  

Behind the changes is the Coalition Government’s desire to see a reduction in  claims against insurers for motorists and  employers and indeed against itself.  

(So,  for example,  in the field of employment,  the Government has ended all Legal Aid provision from 1 April.   It also proposes  to reverse the Health & Safety at Work Act 1974,  section 47,  which contains a presumption that all Health & Safety Regulations made under the Act will carry civil liability for breach,  unless expressly excluded.   The Government’s Enterprise and Regulatory Reform Bill will overturn case law existing since 1898.  With regard to its own actions,  the Government proposes to cut in half the available time to apply for Judicial Review of  unlawful actions/decisions by the Government and other public bodies and to severely circumscribe the opportunities for doing so.)

There are a lot of complaints claimant lawyers could make. But the main purpose of this piece is to address  the Government’s fundamental attacks upon civil claims for compensation for injuries.   These changes fall into two categories:
The Jackson Reforms

Since 1999,  under the “Polluter Pays” principle,  the accident victim who brings a successful claim through lawyers for damages for injuries suffered as a result of someone else’s fault,  has been able to keep all of their compensation.   The “No Win – No Fee” system rewarded lawyers for taking on cases they might lose (in which case they would earn no fee),  by  providing limited success fees in cases they won.  In road accident cases, the success fees are fixed by law and were payable by the wrongdoer or,  in reality,  their insurer.

Proposals by Lord Justice Jackson,  which the Government has decided to implement fully,  reverse that,  so that any success fee will no longer be recoverable from the wrongdoer,  but  only from the victim.   To compensate,  Lord Justice Jackson proposed that damages for pain and suffering be increased by 10% overall.  

So far as claimants are concerned,  these reforms shift the cost of funding claims from wrongdoers (who spread the risk amongst themselves via insurance) to individual claimants.  Those claimants with more serious injuries and more complex claims will receive a moderate increase in damages,  very unlikely to meet the amount of a success fee needed for risky and complex cases.    The whole purpose of success fees being paid by the wrongdoer was corrective justice,  not to provide the claimant lawyer with a windfall,  but to compensate for the cost of running the  losing cases. Success fees were perceived therefore as being “cost-neutral”.

Under the Jackson reforms,  which are implemented by the Legal Aid,  Sentencing and Punishment of Offenders Act 2012,  the victim will have to meet any success fee out of their damages. Damages are intended to put the victim as near as possible, into the position they were but for the accident. They are not a bonus to be shared with their own lawyer. Victims will be left short. Those with risky cases will struggle to find lawyers to take them on.

The Low Value Road Traffic Accident Portal

The second attack upon accident victims is  the Government’s reduction of fixed costs in road accident personal injury claims.  Three years ago,  in order to simplify and speed up road accident claims involving a motor vehicle on a public highway or other public place in which liability was not contested,  the Ministry of Justice introduced a process for resolution of cases with a value between £1000 and £10,000, through an electronic portal.  This would revolutionise the way in which claims were notified to insurers and disputes about value resolved.   There was a long process of consultation and costs and fees were agreed and fixed for conducting these claims.   The siren songs of the Association of British Insurers have persuaded the Government that the work can really be done for £500, rather than £1200,  a reduction in fixed costs of 58%.   The jurisdiction of the electronic portal will now cover claims by injured cyclists and other road accident victims up to the value of £25,000,  with an unrealistically low costs cap of £800. Even the Government’s own advisors in the Civil Justice Council condemn the cost proposals as unrealistically low.

The net effect of these changes will be that to do a proper job, claimant lawyers will be unable
to undertake the work without charging the claimant.   To take three real examples from my
own caseload,  these proposals would lead to my recovering from the car driver’s insurer  legal costs of less than 20% of the value of the work I did in claims settling respectively for £13,750,   £22,500 and £10,000.

While these fees are being cut,  the work involved is not and many cases will simply become unaffordable for a lawyer. I could not do a proper job on these cases for such costs.  (I might add that the process is also being extended to include workplace and public liability cases).

If lawyers are unable to provide independent advice,  injured people who are at their most vulnerable,  are very likely to feel obliged to deal direct with insurers to secure compensation.  All the evidence,  including my experience of dealing with these cases over 30 years,  shows that there is a huge risk that insurers will try to under-settle these claims.  Our responsibilities are to our clients.   Insurers’ responsibilities are to their shareholders.

Even to begin to negotiate compensation,  the injured person needs to know how to value their claim.  How many lay people do?  

The Association of Personal Injury Lawyers,  a not for profit body which champions the interests of injured persons,  issued a legal challenge against the imposition of these proposals,  as a result of which the Government has delayed implementing some (those concerning workplace and public liability injuries),  but in a fit of pique,  the Secretary of State for Justice Christopher Grayling proposes extending the Small Claims threshold to £5,000 or more (pick your own figure).

The Small Claims jurisdiction is one in which legal fees are not recoverable (even the reduced fixed fees set out above).   If claimants’ lawyers can be cut out of the picture as much as possible,  so the theory goes,  then motor insurers, particularly will reduce their premiums and car drivers at least will be happier.

For a long time now,  claimant lawyers have fought  these proposals which will badly damage the interest of injured persons and indeed access to justice -  generally regarded as the hallmark of a civilised society.   By access to justice we mean not just access to courts and litigation,  but a recognition that everyone is entitled to the protection of the law and that rights are meaningless unless they can be enforced,  i.e. protecting ordinary and vulnerable people and helping them to solve their problems.

The Government is full of empty rhetoric about the sanctity of our justice system, but its actions reveal its true agenda. I am afraid this agenda has been set by insurance companies to preserve their  profits at the expense of those who have suffered injury because of the negligence of their policyholders. Injured cyclists who have a claim will be among those who suffer as a result of these changes.
Any cyclist pondering a claim for an accident that has already occurred should get it underway before 1 April 2013 when these changes bite. To avoid the impact of the changes, no win no fee agreements will have to be signed up and legal expense insurance policies issued by 31 March.

Yours sincerely,

E-mail:  mh@dowse.co.uk