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Back to the future

Posted by Neil Rose, Editor, Litigation Futures


The good old days

In some ways it was Lord Justice Jackson’s intention to take us back to the 1990s. While he was not necessarily advocating a return to Rachel haircuts, Girl Power and MC Hammer trousers, he clearly felt nostalgia for the days when claimants had to pay success fees out of their damages.

But it is more than just the end of recoverability that is taking us back to that era, according to a debate on life post-Jackson held in London last week by personal injury mediation provider Trust Mediation.

The event was held under Chatham House rules, meaning I can only identify the broad affiliation of speakers, rather than their names. But one thing that came through strongly was that what goes around, comes around.

One claimant lawyer asked the representative of a large insurer whether qualified one-way costs-shifting (QOCS) will mean a return to the “blood payments” insurers would make to settle a case brought under legal aid where it was cheaper to pay out than settle. (The insurer suggested those days had never really gone away, arguing that claimants are being sold short now in certain circumstances – “some claimant solicitors are doing cases they shouldn’t be allowed near”. He predicted that the changes will not mean more under-settlement.)

Another claimant lawyer reckoned that the lack of additional judicial resources will mean that, like after the introduction of the Civil Procedure Rules in 1999, there will be a short burst of active case management before life returns to how it was. This was countered by the suggestion that the stronger powers of strike-out in new rule 3.9 should encourage close interest in the other side’s compliance.

One thing not reminiscent of the 1990s, however, was the proposed levels of portal and fast-track fees. From the claimant side was the concern they strengthen the economic incentive to churn cases and just settle them – as well as complaints that the figures do not take account of the costs of client care – while the defendant side saw an opportunity for their opponents if they change the way they operate, especially by making “well-judged part 36 offers”. Claimant lawyers acknowledged that part 36 could be a potent weapon for non-portal cases.

There was some debate over whether Jackson LJ was actually right to recommend that clients should have independent advice before entering into a damages-based agreement – which the government rejected – given the greater risk of conflicts of interest between solicitor and client, while after-the-event (ATE) insurers vented their worry about increased cherry picking, making delegated authority schemes unattractive.

Perhaps unsurprisingly, given the hosts, mediation was seen as having a greater role in the new world of personal injury litigation. “The dysfunctional court system means there’s a great opportunity for mediation,” said one claimant lawyer, while an American lawyer said that most large personal injury cases in the US are mediated.

The session finished with the panellists who led the discussion being asked to name one change they would like to see before 1 April 2013. Two claimant lawyers wanted to see a delay in implementation while a proper assessment of the cumulative impact of the reforms is undertaken, while another said ATE should remain recoverable.

There was also a plaintive call for a detailed practice direction on the new proportionality rule, and for a costs council with a lay majority, while an ATE insurer said the reforms, and particularly QOCS and the end of recoverability, should be piloted to test the impact on claims numbers.

The insurer questioned why fixed costs for EL and PL are higher than those for RTA. A claimant lawyer replied that the fact the fee for a £1,000 EL claim is more than that for a £25,000 RTA claim simply demonstrated that those setting the policy do not understand it.

Certainly there was no shortage of expertise in the room, and a feeling of frustration that the government has largely not listened to it. Those at the coalface may know best, but then when you are that close to it, to mix metaphors, can you see the wood for the trees? The government thinks it knows best, and who knows – maybe it does. Just like it did in 1999…