May 14

6 Weeks Later

Posted in Personal Injury Claims

So we are now 6 weeks into the new regime and how is it going?

From our point of view – not bad, although still slow compared with before the changes. We have been speaking with our 300+ firms and have managed to glean some interesting details.

First, many have yet to work out what they are going to do in order to get cases in from referrers. They can’t pay for them anymore – so other arrangements have to be put in place. Problem is, with the rush to beat the change, it was all hands on deck and so quite a number of practices decided to put off the decision making until afterwards. Of course – with floods of work in March – this also translates to lots of clients to service in April and May. It is only just settling down a little and so some minds are only now being turned to the future.

Second, of the firms who have made a decision about what to do – they all seem to have made the same choice: charge the client a percentage of their damages then pay for the After the Event Insurance out of that – and they say this is less than most other firms (which it isn’t). Why this structure? We have been looking into this decision and, in our opinion it is flawed. Now, we do have experience at the coal face in our earlier guise as PI solicitors so we are not talking total rubbish here. Why would you say to a client: we will charge you 25% + VAT of your damages and that’s it? Sounds greedy. Why not say – we will charge you 20% + VAT of your damages if you win plus you have to take out insurance costing £106 just in case you lose. It is an easier sell isn’t it? After all – all clients understand what insurance is. Also – this is actually cheaper for the client because Insurance Premium Tax is 6% but VAT is 20%. Why set up a structure which costs the client more money?

Third, we have discovered that some firms are giving clients the choice whether to insure or not – and guess what? Some choose not to. So what happens if those cases are lost? Who pays then? Some firms say they will go after the client for the money (assuming they can find the clients of course). Really? Isn’t that throwing good money after bad? Aren’t those clients going to run straight to the SRA and say you failed to advise them properly? How much time will be spent by a partner dealing with those complaints? At £200 per hour, will it be more than 30 minutes of the partner’s time per complaint? I think it might be considerably more than that. Why not insist on insurance on
all cases?

There is another reason why this is important of course. Do you know why Electric cars are much more expensive than petrol ones to buy? It isn’t because the components are more complicated or more expensive to make. It is because of economies of scale – i.e. the fixed costs of production (the factory production line, workers’ salaries, marketing etc.) have to be split across the numbers of cars sold. Those fixed costs are the same pretty much no matter how many cars get sold so the fewer sold, the greater the share of the fixed costs each car has to contribute so the higher cost of the car. If many thousands get sold then the fixed cost per vehicle reduces – and therefore so can the sale price. It is the same with insurance. Fixed costs are the same no matter how many policies are shifted. If a large percentage of clients are allowed to move the burden of insurance onto the solicitor firms (i.e. it will be the firm who loses money if an uninsured client’s case is lost) then the cost of insurance will begin to rise as those fixed costs will need to be spread over fewer policies.

Why should you care?

Well, ATE Insurance is here to stay. How much it costs and whether it will be solicitors or clients footing the bill is largely up to the collective will of the legal community. Don’t blame us if a year from now premiums are costing 3 times as much. I recommend that you start telling your clients what to do for a change.

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Apr 3

The calm after the storm

Posted in Personal Injury Claims

Phew. What a month.

It’s been a while and for good reason. We have had the most unbelievable month in our history. Why?

Well, we all know about the Jackson reforms taking effect 1st April and we all know that everything needed to be insured before then as otherwise the ATE premiums would not be recoverable. What no one predicted was the huge number of cases that solicitors would find lurking in their cupboards which had not been covered until now.

Let’s give you some numbers. In terms of value, we did a year’s worth of business in March. We are talking 10s of thousands of policies, many of them bespoke and higher value premiums due to the fact that the cases were mature. Several of our competitors couldn’t cope and stopped taking new work well before the 31st. We, on the other hand, arranged insurance for our last case at 11pm on Easter Sunday. Our team was brilliant - not just in dealing with this huge volume of business but also getting systems, our website and media all ready for the change over. And… it all went smoothly.

It is a shame that firms did not have this attitude (i.e. insuring everything) from the start as if they had had, ATE insurance would have been a lot cheaper. Maybe a lesson needs to be learned here. If the new Post-Jackson policies are to remain cheap, firms need to ensure they insure everything.

What does the post-Jackson landscape look like? Well, we are offering a range of premium structures to firms and this ability to choose is proving very popular already. Clients are already agreeing to our policies in order to protect themselves and solicitors are sold on the idea of having insurance in place to protect their disbursement outlay.

It will take some time to see what the future holds and I expect a few casualties along the way – I can’t see some of our competitors staying in the market for long.

We shall see.

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Mar 5

How to survive on reduced fixed costs

Posted in After The Event Insurance, General, Personal Injury Claims, Road Accidents, The Jackson Report

And so it came to pass. David did meet with the great unwashed (insurers) and a deal was done which the learned Judges hath said ‘there’s nothing wrong with that’: Costs for a basic RTA will now be fixed at just £500 post April.

So what now? There are letters in the Gazette saying ‘we are turning out the lights’, ‘we are all doomed, doomed I tell you’ etc etc.

But is this really true? Let’s wind back to 1998, before the Access to Justice Act. What used to happen then?

Well, solicitors used to charge their clients an hourly rate and claim costs back from the defendant if they won. If they lost, the client sometimes still had to pay – as was also the case if there was a shortfall in recovery of costs. What is more, there were After the Event Insurance policies taken out – which the client paid for.

Did the world end back then? Were solicitors firms closing and laying off hundreds of workers? Er, no.

What used to happen was that clients paid for a solicitor to run their case for them. What is wrong with that? We have all got into the mindset over the last 10 years that the client’s damages are sacrosanct. Why is that? Why should they not pay something in order to be compensated? Why shouldn’t clients agree to a deduction of say, £500 from their damages if the solicitor wins their case for them?

I know some solicitors will say that this would mean that clients would not be fully compensated for their injuries. Now I can understand that where future care is concerned or if we are talking about a serious head injury claim but whiplash? Come on. Clients won’t care. Prior to 1999 they were happy to hand over a size-able percentage of their damages to a solicitor who won their cae for them and they will get used to it again. They will have to. It is either that or solicitor firms up and down the country will have to close and then who will act for the injured clients?

I know which I would rather do.

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Jan 18

Will Jackson be the death of BTE Insurance?

Posted in After The Event Insurance, General, Personal Injury Claims

Is it a surprise that the percentage of people who have a ‘Before the Event’ (BTE) Legal Insurance policy has been dropping over the last few years?

During periods of recession, luxuries such as non-compulsory insurance often need to be jettisoned in an exercise of belt tightening. What surprises me however is the extent of the recent drop-off. DAS have reported that take up was running at 80% a few years ago but is now down to 50%. No wonder claimants are increasingly looking to After the Event Insurance as a better deal – they only take out a policy when they actually need it and don’t have to pay for it unless they win.

The Government of course made their view clear 2 years ago when the Jackson report was published. They believed that the solution for claimants was a greater take up of BTE but they clearly did not know the market well enough – both the way it operates and the sensitivity to economic times. You see the cost of BTE Insurance has for years been supplemented by referral fees. BTE insurers have until now actually encouraged claims by ringing around their policy holders to see if they had had an accident. Why? Well, if there was a claim, the insurer could sell it to a solicitor for several hundred pounds. Not just that but they would have an ‘arrangement’ with the solicitor that there would never be a claim on the BTE policy.

So the claimant got compensated, the solicitor got a case and the BTE insurer made lots of money. It became so lucrative that often policies were virtually given away far below their true cost – sometimes for just £10.

But that was before the recession - now savy drivers have began un-ticking the ‘Do you want Legal Insurance?’ box on their car insurance renewals, thereby saving themselves money. After all – if they did have a claim they knew there were lots of companies ‘off the telly’ who would help them.

So BTE insurers have been seeing a drop in income. But the worst is yet to come….

When the Jackson reforms come into force in April, there will also be a ban on referral fees. Immediately the BTE insurer’s business model will have to be junked. No longer will they be able to go after claims and then sell them on but instead they may be keeping their heads down for a change. The only option for the larger ones will be to take over a solicitor’s firm and run cases in-house for the legal fees. Trouble with this of course is that the fees a solicitor can generate are also likely soon to be slashed.

Only one thing for it then – put up the cost of the BTE policy to a true ‘burn cost’ figure (who knows what that would be – I doubt many of them will know either!). Oh dear, bad move – we are in a recession. If the take up of BTE is going down now, just think what is going to happen when the referral fee ban comes in and premiums have to rise two or three fold.

If you have shares in a BTE insurer, sell them now. They are in for a rough ride.

 

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Dec 20

Small Claims Court Rise Consultation – Why Bother?

Posted in After The Event Insurance, Personal Injury Claims, Road Accidents, Solicitors

So here we go again. The Ministry of Insurance Companies  Justice has issued another consultation document, this time regarding their proposal to raise the Small Claims Court limit for some PI claims.

Now if the Government hadn’t already rejected a rise less than a year ago, perhaps I wouldn’t be so sceptical about this but I am afraid to me, and countless others, this just goes to show how close the Insurance industry has managed to get to the decision makers at the MoJ.

A further indication that there has been some very successful lobbying going on are the three proposals themselves. The MoJ has given respondents 3 options:

1. No change to the small claims court limit
2. Raise it to £5,000 for all Road Traffic Accidents
3. Raise it to £5,000 only for whiplash claims suffered in a Road Traffic Accident.

So why options 2 and 3? Why limit the change to RTA claims? Are those injuries less serious or the victims less worthy than say someone injured at work? What has option 3 got to do with anything? Is a whiplash claim less serious than an injured leg? Is a whiplash claim somehow easier to deal with and so victims won’t need legal representation? What happens if there are multiple injuries including whiplash?

This is just unbelievable. It is quite clear that the Government has listened to the insurance industry and has ignored everyone else.

I will stick my neck out here and predict the results of the consultation. There will be loads of replies but the summary document produced by the MoJ will refer mainly to data provided by the defendant insurance industry. The MoJ’s summary will be produced somewhat quickly following the closure of the consultation period (I am guessing we will be seeing it within 2 weeks of the March deadline) and will conclude that the public will be well looked after using the small claims court (and Insurers can be trusted to pay out the right compensation). The MoJ will therefore decide to raise the limit to £5,000 for all Road Traffic Accident claims to take effect in October 2013.

I will now also predict the results of all of this:

1. The Small Claims Court will become swamped with claimants who will be ‘represented’ by claims management companies in return for a cut of the damages. There will be an outcry from The Law Society and APIL etc but they will be ignored. No one will be paying referral fees so no law will be broken. This is will be a brilliant way for Referrers to remain in business.
2. Car Insurance premiums will drop by an average of £20. The predicted £90 reduction which has been banded round by insurance companies will turn out to be incorrect. After all, the insurance industry will have a large hole in their finances following the ban in referral fees and so the lower claim payouts will help them to maintain (or who knows increase) profit levels. Additional costs will also be found with the waters muddied by, I don’t know, flooding claims or similar. The £20 reduction won’t take effect for 2 or 3 years anyway due to the ‘backlog’ of claims.
3. The Government will sympathise with the Insurance industry who will hold further talks at Downing Street over tea and cakes. The invitations to this shindig for representatives of claimants will be lost in the post.

That’s it. I am off to punch a wall.

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Nov 21

The New Costs Regime – A Trip to the Dentist?

Posted in After The Event Insurance, General, Personal Injury Claims, Road Accidents, Solicitors, The Jackson Report

We all dread it, sometimes for weeks in advance. A trip to the dentist. The visit itself may not be that bad, but the dread of what might happen……..

Could it be that in a few month’s time we will see the government’s latest announcement as just an anticlimactic session with the oral hygienist?

As you may know, the Justice Ministry has outlined its proposed new fixed costs levels for cases settling within the Portal, and of course from April onwards the Portal procedure will be extended to include EL and PL cases. The Ministry’s proposed flat rate fixed recoverable costs are:

  • £500 for RTA claims worth up to £10,000 (Stage 1: £200; Stage 2: £300)
  • £800 costs for RTA claims worth between £10,000 to £25,000
  • £900 for EL and PL claims worth up to £10,000
  • £1,600 for EL and Pl claims worth between £10,000 to £25,000

The Justice Minister has explained that the costs have been reduced to ‘reflect the forthcoming ban on referral fees’ which presumably means that costs have been reduced by the £700 which is often paid to referrers. It appears to be a disaster for personal injury firms, but how bad is it, and will it be impossible to adjust to this new landscape?

It’s worth looking at each component of the personal injury market in turn – referrers, solicitors, clients, BTE insurers and of course ATE insurers.

Referrers
… seem likely to suffer. Claims that generate less costs are less valuable, so referral fees will naturally drop and we already know that Section 56 of LASPO 2012 bans referral fees beyond a payment which a solicitor can show is a fair price only for work actually carried out.

Solicitors
…will still need to acquire work by marketing their services. They will either form new business structures with referrers, or increase their advertising spend. Baseline costs of £500 will be insufficient to pay for this, so they will probably need to charge their clients a small additional sum, to be paid out of damages on successful cases. There is obviously a risk that the rush to compete on headline price will cause an increasingly reduced level of service, but if this is avoided, and clients must now pay £200-£300 to supplement the new low level of recoverable costs, will this really be the end of all things?

Just one other thought – with Portal costs now so low, solicitors are going to do everything they can to cause claims to exit the Portal, so procedural failings within the Portal by Defendants may be more readily seized upon by Claimants from now on – Defendants beware! (…and will dealing with these issues increase satellite litigation?)

Clients -
…may well continue to behave as before. Clients should in theory receive 10% extra damages to offset any costs they will now have to pay, but in any case historical evidence (Claims Direct?) suggests that losing a proportion of their
damages (if necessary) does not deter them from making a claim. If referrers are providing a service which clients cannot do without, and referrer activity diminishes, then there may perhaps be a few less clients making claims, but by and large the number of clients pursuing a claim is unlikely to diminish significantly.

BTE insurers -
…may have to review whether they have a viable product. BTE insurance’s only value to insurers is as a tool to capture claims and charge solicitors a referral fee. If they can no longer charge that referral fee their first reaction will be to form Alternative Business Structures and take the legal work in-house, but with recoverable costs reduced, will the profits be attractive enough to large commercial organisations who will still need to employ solicitors and senior staff at the right level?

ATE insurers -
After the Event Insurance will still be required by clients to protect them against abortive disbursements and adverse costs awarded when a Part 36 offer is not beaten. ATE premiums will fall to reflect a lower but still significant costs risk, and price competition is likely to increase since the client will be paying the premium out of their own damages – albeit now increased by 10%!

Hand me that drill and don’t bother with the pain relief – I can do the fillings myself.

Simon Pinner
Director Box Legal

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Nov 5

Jackson Reforms – The End of Hold Harmless Insurers?

Posted in After The Event Insurance, General, Personal Injury Claims

Don’t worry. I am not talking about us here – we have never been so busy. Why is that do you think?

Well, we are finding that some solicitor firms are finally waking up to the fact that their current After the Event Insurer won’t cut the mustard come April 2013 and are rapidly jumping ship. They have realised that they need an ATE Insurance provider who will fit their amended business model and provide no-fuss affordable policies which require no additional admin. We have also found firms who were working with ATE insurers who weren’t exactly playing by the rules. They were providing solicitors with what is commonly known as ‘Hold Harmless’ policies or hiding commissions. ’Hold Harmless’ cover is where the solicitor agrees to never claim on the policies. In return they get a whacking great commission.

Now we (and the FSA, SRA, MoJ, Law Society, Uncle Tom Cobley ’n’ all) consider such arrangements to be illegal and a fraud on the client and defendant insurer. Well – another nice side effect of the Jackson reforms is that these policies are not going to be able to be workable anymore. Why? Well the client is going to pay and, under the commission rules, solicitors have to declare to the client any commission they earn AND tell the client that the money is in fact theirs to keep unless they agree in writing that the solicitor can keep it. Up until now, most clients have been happy for the solicitor to earn a commission from the ATE policy (after all this is normal for all insurance), however, which client in their right mind is going to agree to a solicitor making a large commission from an insurance policy that the client themselves is having to pay for?

Now some naughty solicitors have not been telling their clients about all of this money they are earning and may be tempted to keep on doing this. No problem they think. If they get caught then they can simply get permission later. We have come across quite a few of these. Well, bad news I am afraid.

You can only get the client’s permission before you earn the commission so, if you don’t comply with the rules, none of the commission is yours. And when I say none, I mean none. We know of at least one firm where the SRA spotted this ‘omission’ and made the solicitor send clients the commission they had earned on all of their files, going back 4 1/2 years! It nearly bankrupted them.

So you see, there are a lot of solicitors out there sitting on a time bomb. There are also insurers out there who will have to offer something a little more meaningful than just silly commission levels after Jackson comes knocking.

What is the moral of the tale? Well, make sure you work with a reputable broker who knows what they are doing (maybe even one set up by PI solicitors) and one who offers a decent and ‘above board’ product. If you haven’t declared commissions or have one of those illegal ‘Hold Harmless’ policies then I suggest you sort it out. Quick.

Knock knock.

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Sep 28

Rumour Mill

Posted in Personal Injury Claims

Howdee.

We have been hearing various rumours on several subjects. Who knows, some of them may be true. Thought I would share them with you.

First up are the Jackson reforms – we have heard a rumour that the implemenatation date may be about to change to October 2013.

How likely is this rumour to be correct? Well, it was being circulated at a MASS conference recently so I think it should be taken with a pinch of salt however, you never know, there may be some truth in it. Let’s see.

We have the recent reshuffle which will have caused some delay with ministers and junior ministers having to get up to speed. We also have the issue of the portal and the fact that the MoJ wanted it to apply to non-motor claims and for this implementation to take place at the same time as the Jackson reforms. Well – they aren’t ready and are not going to be so, either the extension of the portal happens later or….

Another pointer to this rumour  are the detailed rules themselves. Still no sign of them. This does not mean that they can’t be finalised before April but as time ticks by, the ability to produce them and allow comments and amendments before the deadline becomes less likely. We also have Christmas in between of course.

Ok – next rumour - the small claims court limit changes. There is supposed to be a consultation happening on this and the results will need to be analysed then er, ignored and a limit set. What will that limit be? Well we have heard whispers that it may be set to £2,500. Why? Well this is what the Criminal Injuries Compensation Authority limit will be from next month i.e. if you have a claim for compensation under this sum then you can’t claim it from the Government. You could of course launch your own Small Claims court case against the offender – so it would be useful if the limits lined up wouldn’t it?

Another pointer to the rate not being raised to the full £5,000 was the recent report indicating that the Small Claims Court system was struggling a bit with volume (mainly due to those pesky litigants in person not know what they were doing so clogging everything up!). Not a good idea then to throw another 100,000 claims into the process.

Final rumour – we may be about to expand again – far too much work coming in. Watch this space…

I thank you.

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Sep 8

The King is Dead. Long Live the King.

Posted in After The Event Insurance, Personal Injury Claims

So bye bye Ken Clarke. In his re-shuffle, our PM has announced that Ken Clarke will be put out to grass (otherwise known as ‘Ministry Without Portfolio’).

Cameron has also got rid of our old friend, the grinning Cheshire Cat (otherwise know as Mr Jingle Jangly). Jonathon Jingle Jangly may have been sent to the back benches because of his number of gaffs and his sickening performance in the House of Commons where he was seen grinning and laughing like a spoilt school boy when the serious issue of Industrial Disease claims were being debated. Some good news then. Everyone gets their comeuppance in the end.

So who do we have now?

Well some chap called Christopher Grayling.

‘Who he?’ I hear you cry.

Well – let’s just suppose the country was facing one of the most important upheavils in civil and criminal law for a generation. Who would you need to steady the ship and listen with a trained ear to both sides of the debate?

That’s right, someone with no understanding of law or the legal profession at all – a former broadcaster. This is the first time in the modern era that a non-lawyer has been given the job of Lord Chancellor. Chris Gayling also used to be a management consultant – and we all know what job they do don’t we? What is the expression – ‘Jack of all trades, etc’

It’s like asking a sailor to fly a plane. Brilliant.

So will things change? Do you want my view?

Well – we all know that civil servants really run ministries – so no – nothing is going to change but, maybe things will slow down a bit. There is a lot for the new Lord Chancellor to get to grips with and understand. Let’s face it, some solicitors don’t understand the changes so it may take him some time to sign off on the new rules etc.

We can but hope.

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Aug 18

Eid Mubarak

Posted in Personal Injury Claims

As many of you will know, Ramadan has come to an end and on Sunday, it is Eid.

It is a time for celebration, for visiting family and giving presents to children – a bit like Christmas I suppose. Although Ramadan is seen as a blessing, it is tough to fast from sunrise to sunset for 30 days non-stop. For those uninitiated, that means no food OR drink. When the days are long that means 16 odd hours without food or water. So the celebration of Eid has been earned.

What relevance here to After the Event Insurance, Personal Injury claims or law for that matter?

Well (stay with me), we have a long slog ahead of us in the lead up to the Jackson changes in April next year. Here at Box Legal plans are already afoot to deal with  first the rush for last minute cover and then the new products after the change. We are already well advanced with innovative products which will suit both solicitors and clients alike.

It is going to be tough as well for solicitors whose business models will need to change. Where are cases going to come from with referral fees banned? Are referral companies going to be swallowed up by solicitors or vice versa? Are solicitors going to pour more resources into advertising (utilising the forgone referral fee perhaps)?

As usual, most of us will adapt. The important thing is to plan ahead. We are already talking to firms to check that what we think they want is in fact going to be useful for them. If you are reading this and want to contribute then get in touch – daniel@boxlegal.co.uk. All contributions are useful – even negative ones so don’t worry about offending us.

For the whole industry, we have 8 months of upheaval with no doubt a lot of stress and worry along the way (not just 30 days) – At least we can eat and drink though. But what of our Eid?

Well, I for one am convinced that we will end up with a cleaner, clearer and fairer system (after some bedding down) after Jackson where solicitors can still be in business and clients can receive (most) of their compensation. The After the Event insurance industry will also be fairer with the daft policies and silly commissions a thing of the past. There is no point in negative thoughts. Just as Ramadan rolls around every year, these changes are coming – all we can do is get in shape and stay positive.

Challenges make you stronger.

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Jul 18

The Portal 2 years on…

Posted in Personal Injury Claims

So at last we have some information about the Portal to see how things are going and in summary – not very well.

Now here at Box Legal, we have history with the portal as we tried to obtain information from them about success levels etc some time ago. We needed this to show the courts when justifying our After the Event Insurance premiums. The defendant insurers were saying ‘You can’t have a fixed premium as there is no risk in the portal yarda yarda…[I added the last bit]‘. Guess what – the portal wasn’t keeping statistics! Can you believe that? Why on earth not I hear you cry – well they claim it is because the system has been designed in such a [stupid] way that it allows cases to be settled or abandoned without people notifying the portal so the data they have can never be accurate.

So this is why the Ministry of Justice has had to go back to their favourite defendant insurers and a couple of claimant solicitors to ask them how things are going. Which is daft isn’t it? First, it is hardly a representative sample and second, it is open to manipulation. The report states though that, as the defendants are large, they will be providing samples from cases across the country and across a large number of claimant solicitors and therefore it will be a good sample. Unbelievable – so they are again relying mainly on data supplied by defendants. I wonder what that data will show us?

Yep – you guessed it - the data shows that the portal hasn’t been all that successful. The report found a 6% reduction in damages, 3-4% reduction in costs and a 5-7% speeding up of settlement. It also found that around 50% of cases exited the portal.

Let’s analyse these shall we (whilst bearing in mind who supplied the information):

  • Reduction in damages – why? What relevance has the portal got to the injuries sustained by claimants? Has the portal suddenly reduced the seriousness of accidents? No. What it has done is force insurers to make early offers – and as these tend to be low, it has brought the average down. So not good news. Are solicitors now undersettling?
  • Reduction in costs – great news for the defendants this one. Very little reduction in costs has been achieved – maybe because of the only slight increase in settlement speed – but in any event this figure will be used as a stick to beat down post Jackson legal costs. Nice.
  • Speeding up of settlements – not a lot quicker – just 5%. Will the Jackson changes address this? No.
  • Cases exiting the portal – Half of all cases have exited the portal. This is the most significant statistic and affects all of the others. What is by far the main reason? No response from the defendant or their insurer.

So there you have it. Second hand data from a small sample with mainly a defendant bias which will now  be used to determine costs and the future of the PI industry. No doubt the main finding will be ignored once more- the fact that defendant insurers are not putting nearly enough resources into dealing with claims. Why? Well no doubt they are playing the long game here. Bad cost reduction figures indicate something has to be done to curb those pesky lawyers. It isn’t the defendants’ fault is it?

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Jun 15

Part 36 Offer Cost Liability to Remain Post Jackson

Posted in Personal Injury Claims

Says it all really.

I have been keeping quiet as things have been somewhat busy here at Box Legal. We are in the process of launching a number of new products including After the Event Insurance for the PIP Implant claims as well as for defective hip replacement implants. Looks like a busy 12 months ahead.

So why the headline? Well the Ministry of Justice has now heard back from the steering committee with recommendations concerning exceptions to our old favourite – Qualified One Way Costs Shifting (QOWCS). It appears that it wasn’t as simple as Lord Jackson proposed (and as we predicted). Anyway, the long and short of it is that claimants will still be facing quite a few risks of paying adverse costs under the new regime as before.

First is the uncertainty which is prevailing regarding the behaviour of the claimant. Fraud is clearly a no-no and would not be covered by ATE insurance anyway but it seems the MoJ is keen to allow judges to award costs against an unreasonable claimant. No definition yet (great) and even if there is one, it is bound to be fairly woolly so claimants won’t be sure whether or not they will have to pay costs.

Then there is the proposal of a minimum costs payment – i.e. QOWCS won’t mean no costs but instead may mean ‘fixed costs’. This is another example of brilliant lobbying by defendant insurers - watering down the plans.

Mixed claims won’t get protection. ‘Mixed’ here means where subrogated items (such as the client’s insurer’s outlay) being added into the claim. We aren’t sure if this includes employer’s subrogated claims where they seek recovery of wages paid to an injured employee whilst off sick. No guide as yet on this one.

The final – and biggest – exception will be Part 36 offers (hence the headline). Basically, if the claimant fails to beat a part 36 offer, costs will be assessed and will have to be paid up to the total of the damages they were awarded. Brilliant. So again, as predicted, defendant insurers have an easy way of getting around QOWCS. They will simply make an offer of say £1000 on every claim which then puts the presure on the claimant – they are at risk of paying costs from day one. Some cases are of course quite large. If a claimant has only third party insurance, repairs or replacement of their vehicle will form part of the claim. This could add up to £5,000 quite easily. Will claimants really want to risk losing all of these damages? Without any ATE Insurance, they will be under enormous pressure to accept a low Part 36 offer. It is not just about the adverse costs of course – the claimant’s solicitor’s disbursements will add up to a pretty penny too!

Our view is, all claimants will have to take out a policy to cover them against these risks and that they will have to insure day one. If they don’t and the defendant fires off a low Part 36 offer (which they will on most cases), we see very high premiums to protect claimants against a very real risk.

Over and out.

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Jun 12

Seeking redress for women affected by PIP scandal

Posted in Guest bloggers, Personal Injury Claims

Author: Fiona Hedges, Mercury Legal

For over a decade PIP breast implants, also known as M-implants, have been produced and distributed worldwide by French manufacturer Poly Implant Prothese.

It is estimated that over 500,000 implants were sold worldwide before it was discovered that the manufacturer had been filling the PIP implants with industrial-grade silicone, a product more typically used as mattress filler.

In March 2012 the High Court recommended that a Group Litigation Order be pursued in relation to personal injury claims for women who have received PIP breast implants. The Group Litigation order will potentially allow the estimated 50,000 women in the UK affected by the scandal to pursue claims for compensation.

Class actions such as the PIP Group Litigation Order, whilst not unheard of, are uncommon and there are many hurdles to overcome to pursue a claim however at this stage we are extremely confident that we will ultimately be successful and justice will prevail.

The PIP Group Litigation Order is made especially complex due to the sheer volume of clinics and surgeon’s, both private and public, who supplied PIP implants to women across the UK. Due to the unregulated nature of the UK cosmetic industry it can be a difficult task to track down not only a defendant company but also their insurers (if the defendant company is no longer trading).  In addition to this, consideration must be given as to whether a claim ought to be brought under negligence or contract laws.

Mercury legal solicitors have established an excellent reputation in the personal injury arena and so when concerns started to be raised about the PIP breast implant difficulties it was little surprise that we were contacted by companies representing a large number of women affected by the implants to see if we would be able to help.

Although time is running out on the Group Litigation Order, we believe that victims will be able to claim up until the end of 2014 as most people were not informed of the fundamental problems with the implants until the beginning of 2011.

However, we will not know the challenges bringing these cases will bring post the closer of the Group Litigation Order.  But when we do, Mercury Legal will be leading the way representing the victims affected by the scandal on a no win no fee basis and publishing advice on our dedicated  PIP breast implant website.

Once your case is accepted by Mercury Legal they will work tirelessly on your behalf on a strict no win no fee basis so you will keep 100% of the compensation you deserve. Mercury Legal work alongside Box Legal to make sure that you are protected every step of the way and will never be asked to pay any fees even if your case is unsuccessful through no fault of your own. Thanks to the backing of Box Legal after the event insurance thousands of women affected by the PIP scandal are now able to seek legal advice without the worrying about legal costs.

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May 25

Single After The Event Premiums are fully recoverable

Posted in After The Event Insurance, General, Personal Injury Claims, Road Accidents, Solicitors

As many of you may know, since the introduction of the MOJ portal for low value RTA claims some motor insurers and their costs draftsmen have been saying that a fixed ATE premium is too expensive if the case has settled in stages 1 or 2 of the new RTA claims process.  Why, well they argued that that there are some staged ATE policies available with premiums that are apparently very reasonable if the case settles before stage 3 of the new motor claims process.

This argument came as a slight surprise for those trying to recover the same staged premiums on cases that had not settled in stages 1 or 2 of the MOJ portal, because these were often challenged by motor insurers for being too expensive.

The problem is that although some staged policies do offer very low premiums if the case concludes in the very early stages of a low value motor claim, the premiums tend to increase quite quickly if the case goes to stage 3 or drops out of the MOJ portal.  Therefore if the case settles early then it can be cheaper for the claimant to arrange a staged ATE policy, but if it doesn’t then it is probably cheaper to have used a fixed premium policy.

This is great if you can predict the future, as you simply pick the right type policy for where you know the case will end.  And it seems motor insurers were becoming quite annoyed by claimants lack of psychic abilities.  But with some figures suggesting that anything up to 40% of cases are dropping out of the new motor claims process with presumably a proportion of those that stay in going on to stage 3, it is in fact impossible to know for certain at the beginning of a claim how long it will take or where it will finish.

The problem however, as with most challenges we have seen over the years, did not go away and because of the amount of cases being issued on this issue in the Liverpool County Court, District Judge Smedley (acting as a Regional Costs Judge) decided to pick a number of them to treat as test cases.  The cases have been heard and DJ Smedley handed down his decision on 24th May.

Unsurprisingly, and very sensibly, DJ Smedley has recognised that defendants are trying to have their cake and to eat it by very often making contradicting arguments in different cases depending on what type of premium was being claimed and where the case has settled.  He said:

“So, the claimant and his solicitor dealing with funding at the outset know that their particular claim may or may not resolve within the Protocol. If they choose a single premium policy and the case settles within the Protocol, it will be said on assessment that they should have chosen a staged, reduced-premium policy.  If they choose such a policy and the case exits the Protocol and goes to trial, it will be said they should have chosen a single premium policy – in each case because the choice made was unreasonable.  I accept Mr. Finn’s evidence on this point.  There is no “right” or “wrong” decision to be made.  Both single premium and staged premium policies are legitimate.”

It was held that:

  1. It is reasonable to arrange an ATE policy at the very beginning of a claim, on the claimant first giving instructions
  2. It is reasonable for the claimant to choose either a single premium or a staged premium policy

Will this see the end of these challenges?  If I could see into the future I’d tell you, but if I could do that…….

Jon Gouldsmith
Head of Legal Support

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May 17

Government to Consult on Raising the Small Claims Court Limit

Posted in After The Event Insurance, Personal Injury Claims, Road Accidents, Solicitors, The Jackson Report

Hot off the press, Mr Jingly Jangly has confirmed the that the Ministry of Justice is going to ‘consult’ on their er, decision to raise the small claims court limit for Personal Injury claims from £1,000 to £5,000.

Here it is in black and white  (blue and red with my highlighting) – an official question asked:

Oliver Colvile: To ask the Secretary of State for Justice what plans he has to reform civil justice following his Department’s 2011 consultation. [106874]

Mr Djanogly: The Government’s plans for the reform of civil justice are set out in its response to the Solving Disputes consultation which was announced in a written ministerial statement on 9 February 2012, Official Report, column 31WS.

Since then, this Department has launched an evidence gathering exercise in relation to the extension of the Road Traffic Accident Personal Injury scheme; and has published provisions to establish a single county court in the Crime and Courts Bill which was introduced in another place on 10 May 2012. In addition, the Government intends to consult on raising the small claims threshold for personal injury claims to reduce the costs of challenging fraudulent cases in court, and
on tackling questionable medical evidence by considering the use of independent medical panels.

Now we all know how well the previous consultation went: lots of effort going into the submissions which were subsequently speed read by a thousand civil servants in 24 hours to give the Government their balanced view.

Soooo we shall see.

Here is a quick poser – how does raising the small claims court limit prevent fraud? Does it stop people making bogus claims? Is there some magical force-field at the doors of the small claims courts which prevents criminals getting in? Er no. What about costs then – at least the defendants can get their costs back if someone is found to be a fraudster? Well they can get personal costs orders now but not in the small claims court.

Mmmmm. Strange. So not sure how this is going to help except to give the insurers a lot more money to fight them. That must be it.

Trebbles all round!

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May 10

Unbelievable

Posted in After The Event Insurance, Personal Injury Claims, Road Accidents, Solicitors, The Jackson Report

I have had to wait a few days in order to calm down. I want to avoid potential defamation claims.

So the Government have suddenly decided to increase the small claims limit to £5,000 for personal injury claims.

Now I am a glass is half full sort of person but even I am somewhat sceptical about the timing of this sudden u-turn. The Legal Aid  Sentencing and Punishment of Offenders Bill was given Royal Assent after a rough ride through the Lords recently. Deals were struck during the passage of the bill to exclude mesothelioma cases. Many Lords were also assured by the announcement in February that, following a review, the Government would be keeping the small claims court limit at £1,000 for PI claims due to their inherent complexity and so voted with the Government.

Then what happens? The day the bill hits the statute book, the Ministry of Justice has a cosy conference about whiplash with the defendant insurers and suddenly announces that the small claims court limit will rise 5-fold to £5k.

Do you think they were considering this change whilst the LASPO bill was being debated? Do you think their announcement in February was genuine? I am sure you can guess my view.

So let’s see shall we. The reason for this about turn are the apparent large number of fraudulent claims for whiplash. Now presumably the Government accept that there are at least some genuine claims out there – surely there can’t be over half a million crooks making bogus claims each year. So the way to deal with let’s say 10% of bogus claims is to punish the 90% genuine claimants is it? The genuine claimants will now have to go it alone against the big insurers and all of their legal clout or they will have to forgo a fair chunk of their damages by paying a solicitor. Will this stop the bogus claimant? Will the thought of them having to pay perhaps 25% of their damages to a solicitor put them off? I doubt it.

In effect therefore, the defendants have managed to persuade the Government to remove payment of legal costs on 60% to 70% of road accident claims. Nice saving this.

This has been decided by insurers (who have a lot of money) and Government Ministers who, let’s face it, aren’t short of a bob or two. For most people, being in an accident where they have lost their car (let’s say £2000), been injured and off work for 2 weeks (let’s say £1000) could mean they are out of pocket by £3000 before you think about compensation. This sort of claim would probably have to proceed in the small claims court which is daunting to most people. So this man on the street is going to be injured and out of pocket with no easy way to get compensation. For the insurers and Government Ministers, £3000 is chicken feed. For voters, it isn’t.

The Labour Party have already said they will reverse many of theses changes if they come back to power. The local elections indicate that the man in the street may have had about enough of these underhand tactics by the Government.

With the massive costs savings that the insurers will experience however, at least we will have some benefits:

  1. Fewer defendant solicitors
  2. Fewer defendant costs muppets
  3. Much lower car insurance premiums

So every cloud does have a silver lining.

UPDATE: Made a mistake with point 3 – meant to say Higher Dividends for Insurance companies

 

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Apr 27

LASPO Lego

Posted in General, Personal Injury Claims, The Jackson Report

I was into Lego big time from aged 7 until, er 42. Over the (early) years I managed to collect quite a hoard.

When I went to University aged 18, I left it all behind and, after a while, it got transferred to my Mum and Dad’s attic.

There it languished for 20 odd years until one day a year or so ago my Mum reminded me about it. So I picked it up on my next visit and then it sat for another year or so in our house. My children (5, 4 and 1) weren’t interested in it despite my best efforts to encourage them. Too much Wii and other modern distractions.

But then, following the banning of Wii in our house for a month (I won’t go into the behaviour that resulted in that punishment but it wasn’t pretty) my children finally discovered the joys of building houses, petrol stations and cars etc etc. They are now so keen on it that I have been forced (!) to organise a trip to Legoland and the ‘Wii’ word is now confined to the bathroom.

Playing with my children brought the memories flooding back – all the contraptions I used to build and play with. I remembered in particular an American Lorry I made once in my bedroom. You know – the one with the large bonnet and sleeping accommodation at the back. It took me a whole Saturday morning and I was so pleased with it, I thought I would take it downstairs to show my Mum and Dad. So I picked it up carefully and carried it downstairs. Half way down however, disaster! I tripped on my moccasins (it was the 70s after all) and dropped it. The truck disintegrated before my eyes as it bounced down to the bottom of the stairs.

I was distraught.

But you know what I did? I picked up all the pieces and built another one. This one was actually better and even had a trailer which it could pull along. I was very careful this time however to commence the reconstuction downstairs.

So you see, although Royal Assent is looming for the Jackson reforms which some believe spell the end of the personal injury claims industry in this country as we know it, my view is that working together, we can end up with a system that is better than what we have at the moment. Better for clients, fairer for defendants and providing a living for lawyers and ATE Insurers.

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Apr 19

Government Overturns Lords Amendments

Posted in After The Event Insurance, Personal Injury Claims, The Jackson Report

Check out these statistics. About 2,000 people in the UK are diagnosed with Mesothelioma each year, and some 60,000 people in Britain will develop mesothelioma over the next decades because of past exposure, and almost 40,000 have died thus far — the highest levels in the world. It can take around 30-40 years to be diagnosed and once diagnosed some sufferers with advanced symptoms have less that 9-12 months to live.

With the above in mind it makes sense that the House of Lords attempted to protect these Claimants from the reforms proposed by Jackson. And whilst we thought there may be a glimmer of hope for these Claimants, the House of Commons has now rejected those amendments so that the Jackson reforms will indeed apply to Industrial Disease claims in the same way as all other personal injury claims. It is difficult to understand the ideology behind the Governments’ refusal to
accept the proposed amendment to the Bill however, in light of the above facts.

Justice Minister, Mr Djanogly, argued that accepting the ‘Lords amendments’ to the Jacksons Reform would ‘create inconsistency and damage the wider goal of [our] reforms – to restore sense to the costs of litigation, which have substantially increased by way of which “no win, no fee’ cases operate, largely to the detriment of the defendants”. Basically, it is all about reducing expenditure and stopping lawyers from receiving “inflated profits”.

In his view, under Jackson, Asbestos Claimants would not be out of pocket from bringing their claim, as damages for future care and losses are protected and general damages are to be increased by 10% with a success fee capped at 25%. Ultimately, the suggestion is that  Claimants will not lose out if they shop around for the best deal on legal fees, and of course it would be up to the lawyer as to whether a success fee will be charged – (but surely, by making law firms compete for legal fees ignores the original policy behind success fees, which was to compensate the lawyers for the cases that they lose?)

Furthermore, given the life expectancy of these sorts of Claimants, I am not sure how much comfort the above reforms will give.  After all, given the seriousness of the illness, is it not a bit much to expect them to shop around for the cheapest deal and how much of this will actually benefit their beneficiaries? Not a lot, I say.

It was suggested by Shadow Justice Minister Andrew Slaughter, that if it is one of main objectives of the Jacksons Reform to reduce costs, then the “obvious way to stop inflated costs” would have been to reduce lawyers’ base costs rather than to take money out of victims damages. “The beneficiaries would be the defendants and their insurers.” This argument was strongly opposed  by Mr Djanogly, he argued that the focus of the Reform is not on cutting legal fees but on cutting inflated margins, and not making exemptions for one type of disease. The difficulty I have is that these types of claims are utterly different from road traffic claims. Cases centring on diseases such as asbestosis and mesothelioma are complex and require intensive research before liability is admitted.

Such claims cannot be dealt with by inexperienced litigators, but if they are unable to take them on a ‘no win no fee’ basis without an uplift or a recoverable ATE premium, then ultimately many experienced solicitors will be unable to take on such cases. The potential for injustice, I am afraid, is huge.

Sairha Hussain
Legal Support Advisor
Box Legal Limitied

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Mar 26

A Narrow Escape for Industrial Disease Victims

Posted in After The Event Insurance, Personal Injury Claims, Solicitors, The Jackson Report

The rumour was confirmed last week.  The House of Lords has voted for industrial disease claims to be exempt from reforms to no win, no fee litigation. In effect Industrial disease cases will now be exempt from the Jacksons reforms.

Under the amendment, Industrial Disease Claimants would keep 100% of their damages whilst defendants would pay their After The Event Insurance premium and lawyer’s success fee. The House of Lords agreed that these claimants have suffered enough, their claims are serious and real – they are “true victims”, and it would be unfair to expect these Claimants to lose some of their damages. After all, industrial diseases affect those that have worked long and hard to contribute to the British economy.

Hmmm… So what about other innocent victims who have their lives shattered as a result someone else’s negligence? Why would it be fair to allow them to have their damages deducted to pay for their solicitors’ success fees and ATE Insurance premiums? In essence, if your life expectancy has been reduced by a negligent employer exposing you to asbestos you are entitled to claim 100% of your damages back. However, if you have suffered serious injury as a result of lack of safety measures in the work place you’ll pay a deduction. The amendment is obviously good news for victims of industrial disease, but it doesn’t go far enough in allowing fair access to justice. Let’s just hope that the government doesn’t overturn these important amendments when the debate returns to the House of Commons.

It appears however, that it is not all good news for this exempt group, as the House of Lords refused to grant an exemption to trade unions and charities from the referral fee ban, which means many charitable organisations set up for asbestosis and other industrial disease victims will struggle for funds. The criminalisation of referral fees and whether portal costs should be reduced, is to be thrashed out in the Commons next week… so let’s wait and see … since industrial disease claims were exempt from the reforms, perhaps there is glimmer of hope for the rest of Britain’s innocent victims.

Watch this space….!

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Mar 8

Will Leveson Influence the Jackson Reforms?

Posted in Personal Injury Claims

Hello all. It has been a while. Been busy here at Box Legal.

Lots happening in the world of the strange that is the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Bill of late.

First bit of gossip is we have heard rumours of a push for Industrial Disease matters to be excluded from the regulations – I shall tell more if and when I get confirmation. Also, last night, the Government was handed 3 defeats by the House of Lords including medical reports for Clinical Negligence. It looks like After the Event Insurance may be recoverable for such cases. We shall see.

Today though I thought I would concentrate on something a bit more left of field.

Let’s talk about the Leveson enquiry. It has now been running for several months and all sorts of goings on have been revealed. My friend (Senior Media Partner in a top Law Firm) believes that Lord Leveson is bound to call for regulation of the media with perhaps a regulatory body being put in place which can actually fine newspapers or news organisations.

What is interesting though for us are comments which were made regarding CFAs. The hacking of Milly Dowler’s mobile phone was a real low point for journalism. The Leveson enquiry heard evidence that the Dowlers were only able to take legal proceedings because of the availability of CFAs, success fees and After the Event Insurance. They allowed the very uneven playing field to be levelled a little. Without them it would be the media (with all their ‘influences’ and money) on one side and ordinary members of the public (with very limited finances) on the other. Not a fair situation at all.

So my friend believes that Lord Leveson will recommend that CFAs, success fees and After The Event Insurance should remain.

How this is going to sit with the Government remains a big question. Will they still push through the unpopular (and most agree, unworkable) changes to civil procedure? Will APIL, MASS and The Law Society’s joint proposal begin to become attractive to Ministers who do not want to be seen to be removing access to justice?

I can sense a wind of change although the jury is still out.

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Feb 29

Social Media for Lawyers

Posted in Personal Injury Claims

The number of people across the planet actively participating in one form of social media or another is mind boggling. Only a few days ago, Twitter announced that they have now signed up over 500 million users, and come the summer, Facebook are on track to double that number.

From a business perspective, social media is often seen as a complex beast and one that can easily turn round and bite you on the backside without warning. The potential on the face of it seems huge, with more than half the population of the UK currently active on one or more social media platforms. But how exactly can you make it work for you?

The first thing to do is adjust your expectations regarding traditional approaches to lead generation. For most businesses, social media will become an additional weapon in their marketing armoury, rather than replacing what’s gone before. And don’t expect instant results. It’s a bit of a slow burner in most cases, but contrary to popular belief, its effectiveness can be tracked so you will be able to report that  all important ROI.

The big difference between social media and traditional media is that you can now actually engage directly with groups and individuals. Only a few years ago you felt like you were doing more than enough to attract new clients by simply posting your message on a website or placing an ad in a magazine, before sitting back and waiting for the phone to ring.

Each platform has its own particular strengths and pitfalls, so you’ll have to do a bit of research on each and work out what works best for you. That said, if you come back and look at this blog on a regular basis, I’ll be posting some practical advice for both new starters and seasoned pros looking to step up their game.

Roger Orwin
Digital Marketing Manager at Box Legal

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Feb 8

ABI Gain Direct Access to Top MoJ Civil Servant

Posted in After The Event Insurance, Personal Injury Claims, Solicitors, The Jackson Report

This is how laws are made these days it seems.

The proper way is for the Government to issue a consultation document to all relevant parties (i.e. to organisations on both sides of the argument) and then invite responses. When those responses are submitted, the Government department should read them all and come to a balanced opinion. They should also look at data, again obtained from both sides so that a proper view of issues can be considered. Only then should laws be proposed and drafted.

Now I have already commented upon the ridiculously short time between the closure of the consultation period for the civil procedural changes (28th February 2011), the issue of the impact assessment by the Ministry of Justice (10th March 2011) and the announcement of full implementation by Ken Clarke in Parliament (29th March 2011) which indicates to me that the Government failed to read all if any of the hundreds of submissions to the consultations. What was the point of the consultation if the Ministry had already decided on what they were going to do?

Now it has been revealed that it seems that the top brass in the Ministry of Justice have also been getting very chummy with the top bods at the ABI. No doubt you know this but just to spell it out, the ABI represent the defendant insurance industry.

Following a Freedom of Information request, it has been discovered that the ABI have been in regular email contact and had secret meetings with Robert Wright, the head of civil litigation funding and costs at the Ministry of Justice to iron out the rules (see - http://image.guardian.co.uk/sys-files/Guardian/documents/2012/01/17/robertwright.pdf). The ABI was also sending Robert Wright advance press releases and their own industry ‘data’.

When challenged the ABI say that they said nothing which they have not said in public. So that’s alright then.

I would now like to write a paragraph about Robert Wright’s emails to APIL and the nice lunches they had when all of the issues were discussed sensibly or perhaps about Robert’s telephone calls to the Law Society to discuss drafting of the rules. Problem is, there weren’t any. No emails, no calls, no lunches. Just the official 15 minutes face to face time given to the key organisations to make their case.

So this is why this is wrong. The claimant side have to go through the official channels and get a very short time to put their points across but the ABI get as much time as they like. Not fair I hear you cry? Well yes but this is a democracy don’t you know.

I feel a judicial review is approaching.

 

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Feb 1

Jackson Reforms to be delayed by 6 months

Posted in After The Event Insurance, Personal Injury Claims, Solicitors, The Jackson Report

The Ministry of Justice has today confirmed that implementation of the Jackson reforms will now not take place until April 2013.

Enactment of the new rules was scheduled for October this year but they have been receiving a rough ride in the House of Lords. Legal Aid reforms had already been put back to April 2013 and many groups were calling on the MoJ to do the same with the changes to the Civil Procedural rules as they often go hand in hand with Legal Aid in particular the use of After the Event Insurance.

Interested parties are still waiting for draft rules to be provided by the working committee. These were expected before the end of 2011 but it seems these two have been delayed. Is this because both sides are unable to agree or are the Jackson reforms unworkable?

More soon….

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Jan 23

The Future for BTE Insurance

Posted in After The Event Insurance, General, Personal Injury Claims, Solicitors, The Jackson Report

Those of you who read this blog will have spotted a theme here. I have give my predictions for After The Event Insurance (well our take on it anyway) so what of it’s evil twin?

A quick lesson first. BTE stands for Before The Event and relates to those ‘tag on’ legal policies you get offered with car or household insurance. Often nowadays the policies are automatically added (costing from £25) and you have to tick a box to decline the cover. Why would you want it? Well, it means if you have a legal claim, the insurer’s panel of solicitors will deal with it for you – all subject to their terms and conditions of course.

The key thing is timing. BTE Insurance is an annual premium and is purchased before anything happens (in fact if the cause of action has already arisen it will be excluded under the policy). ATE or After The Event Insurance is taken out after the cause of action has occurred – i.e. the accident has happened or the wrong doing has been er, done.

Anyway, BTE Insurance sounds like a bargain at £25 doesn’t it? Well yes but you see, BTE Insurers actually want certain sorts of claims to be made on the policies so policies are kept artificially cheap. Why would they want claims? Well to sell them to the highest bidder of course! Personal Injury claims attract a hefty referral fee and so the more BTE policy holders make claims, the more money the BTE Insurer makes – until the Jackson reforms come in that is.

The Legal Aid, Sentencing and Punishment of Offenders Bill is currently with the House of Lords. One of the provisions is to ban referral fees and so you see, come the revolution, BTE Insurers won’t be able to sell claims to solicitors. Their income will drop and so the BTE Insurance premiums will have to rise to cover ‘real’ claims. Rising prices will almost certainly result in lower sales figures.

And so you see, far from BTE Insurance being able to step into the void caused by ATE Insurance recovery being removed, my opinion is that BTE will become less widely available and more expensive after the reforms. Which is funny because Lord Jackson said the opposite would happen.

Place your bets now please….

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Jan 12

After The Event Insurance Industry Post Jackson

Posted in After The Event Insurance, Personal Injury Claims, The Jackson Report

Happy New Year to you all.

Having fun? Lots of stories about Jackson et al floating around. Today we have the Transport Committee’s findings and recommendations. Surprise surprise, they say whiplash claims are bad  -boooo – and should be curtailed. Also insurers shouldn’t be allowed to sell claims – hooray. Interestingly, they want to somehow stop whiplash claims by having a definition or hurdle to jump before an injury justifies compensation. They should have listened to the medical experts on that one who have been arguing for years about how whiplash should be defined. We are still watching that space.

The Legal Aid Bill is still working its way through the House of Lords and is expected to come through unscathed although I do draw some comfort with the latest defeat of the Social Welfare reform bill. Who knows, the Legal Aid bill may be stopped at the last minute – who knows.

Some After the Event insurers are banking on this. We know of several companies who are just going to stop providing policies in the post-jackson era. The reason? Well, they are too heavy on admin i.e. staffing etc which means their policies will be too high. Also, some companies simply don’t have the stomach for it any more – it is a small part of their business and soon to get even smaller.

What about us? Well we are expanding. We are taking on two new people plus a consultant. We think Jackson is an amazing opportunity. At the moment, there are all sorts of ‘strange’ arrangements out there between ATE Insurers and solicitors, some of which are not actually very legal – all with a view to getting as much money out of the defendants as possible. Post Jackson, with the client paying, all this will go. The After the Event Insurance providers who are left will have to compete on the quality of their product and their service. The feedback we get from our panel (yes we go and talk to them) is that we do very well on this.

So bring it on.

 

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Dec 13

House of Lords Gives Act a Rough Ride

Posted in After The Event Insurance, General, Personal Injury Claims

The Legal Aid, Sentencing and Punishment of Offenders Bill is now in the House of Lords but it has not been smooth sailing for the Conservatives. Over 50 Lords stood up to criticise aspects of the bill, in particular the cuts being made to Legal Aid. Now in the committee stages, it is expected that quite a few amendments are going to be proposed and concessions are going to have to be made to ensure it goes through.

So where does this leave the changes to Civil Litigation and in particular After The Event Insurance and Success Fees? Well, I have a friend who is an MP and pretty high up in the Labour Party. He says that no one is really focused on the Civil Litigation side. There is so much in the bill and so little time has been allocated that it is unlikely the changes are going to be debated at all! So you see this is how legislation is being brought in under this Government. They are chucking in lots of changes with the hope that MPs and the Lords won’t worry about the small stuff – and it is working.

The only ‘good’ news appears to be the 6 month delay in the Legal Aid changes being implemented (moved from October 2012 to April 2013). Now calls are being heard across the industry for both the legal aid changes and the civil litigation changes to take place at the same time. This makes sense as, after all, there is a significant interplay between Legal Aid and civil claims – After The Event Insurance was seen as the replacement for Legal Aid back in 1999. The reason for the delay in the implementation of the legal aid reforms is said to be Alternative Business Structures (ABS) - they want to see the impact of introducing ABSs before making further changes. Can’t see them taking much notice of it though.

And so to end… on a joke. I am still thinking of a good one but in the meantime, my fellow Director Simon has come up with this one – apologies in advance:

We promised a Christmas joke but instead we have to issue an important warning.  Many of you may have seen our latest Gazette advert offering assistance with a case management system for new firms under the slogan (with acknowledgement to the National Lottery) “Because you need to be in IT to win it”. Please note that some people may confuse this with the Eskimo lottery, but this is entirely wrong.

Under the Eskimo lottery “You need to be Inuit to win it”.

Oh reindeery me….

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Dec 7

Welcome to our New After The Event Insurance Website

Posted in After The Event Insurance, General, Personal Injury Claims, Solicitors

Well this isn’t it of course but you can check it out here: www.boxlegal.co.uk.

First, a big thanks to Roger and Kirsten – our two website and marketing gurus who have worked very hard to get the site up and running. A big thanks also to Surefire Media who did all the programming. We are pleased with the result but you be the judge.

So what’s new? Well, it obviously looks different and more modern - you can expand various boxes and even check out our photos. The really clever bits though are in the secure area – you will have to be one of our After The Event Insurance panel firms to have a look but suffice it to say – it’s the dogs er, dangly bits. You can look at all of your ATE Insurance policies, request amendments, put in claim forms, print policy documentation, run reports, customise your view etc etc.

This has been my excuse why I have been very quiet on the old blog posting but no more get out clauses. Now that this major project is out of the way, I shall concentrate more on keeping you informed about the industry. I shall start with Lord Jackson and the progress of the Legal Aid and Sentancing bill through parliament. Just as long as Christmas doesn’t get in the way.

And that reminds me – last Christmas I told a joke so I shall try to come up with something equally amusing to give you some ammo that isn’t from a cracker.

Over and out.

 

 

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Nov 30

A Night of Glamour and Awards

Posted in Guest bloggers
On a clear night in London last week, Thursday 24th November, dressed in their finery,   the Box Legal Team consisting of myself (Kirsten), Daniel, Simon and Jon headed to the Riverbank Plaza Hotel for the Personal Injury Awards sponsored by Eclipse. As mentioned in Daniel’s previous blog, part of our sponsorship package was a magician who did a great act of disappearing and we unfortunately did not get to see him perform – ingenious!  Although we have been assured by many people there, he did a great turn using our logo as part of his tricks.

We were sat with Clerksroom and ate a fabulous meal of tomato soup and steak as we listened to comedian Stewart Francis. We were delighted when Stephen Ward of Clerksroom who sat next to me, won Practice/Operations Manager of the Year. His nomination had been seconded by Cherie Blair QC no less.

However, we were even more thrilled when one of our panel firms JMW won PI team of the year. A fabulous and well deserved award that I would expect had them celebrating well into the night. Congratulations to them and to all the winners and the Personal Injury Awards 2011. A photo below shows JMW accepting their award from comedian Stewart Francis.    

For more information about Box Legal and ATE, please contact Kirsten Arnold on 0870 766 99758 or at kirsten@boxlegal.co.uk

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Nov 21

We are off to see the wizard

Posted in Personal Injury Claims

Yes well I am obviously losing the plot. I have spent the last two weeks doing snagging lists for our new website. The developers are only 3 weeks late which isn’t bad if you ignore the previous deadlines we set them. I am told this is pretty normal but hey ho (no hang on that’s another film).

Right well – so why the wizard? Well it is a magician actually and Box Legal are sponsoring him at this year’s Personal Injury Awards which take place this Thursday! It is our first time at the event as After the Event Insurers (I think I might have gone when I was a solicitor at Kingsford Stacey Blackwell solicitors – although that may have been something to do with TAG – can’t remember). Anyway – Simon Pinner, Jon Gouldsmith, Kirsten Arnold and myself will be in attendance so look out for us if you are going. And look out for the magician doing card tricks as well. Apparently he will have our logo all over him (and who knows maybe on the rabbit as well).

As a special treat - I am offering a fantastic prize – never to be repeated (unless we end up with surplus stock next year). If you read this blog and give me your business card on Thursday night – I will send you one of our brand new umbrellas.

Now that’s magic…

Box Legal Limited: After the Event Insurance Providers
www.boxlegal.co.uk  | daniel@boxlegal.co.uk | 0870 766 9997

 

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Nov 8

Standing Still Moving Forward

Posted in After The Event Insurance, General, Personal Injury Claims, Solicitors, The Jackson Report

We have our auditors in today.

How do they do it? I have to stomach one day of going through figures and cross referencing against files and documents. It is so boring! I have a headache and they have only been here 3 hours.

What’s more, the tests stay the same every year just on different matters. They check our procedures which haven’t altered so why bother? Seems daft to me.

Which brings me neatly on to Lord Justice Jackson and the changes which are afoot for civil litigation.

As reported in the Gazette, Lord Jackson has recently helpfully clarified what he had intended with regard to Part 36 offers – as there has been some confusion. Well, he said it was business as usual i.e. just the same as the rules now. So…. basically, a defendant insurer can make a Part 36 offer on quantum or liability at any time and, if the claimant fails to beat it then the claimant has to pay the defendant’s costs from the point the offer was made right up until trial.

Now it doesn’t take a great deal of intelligence to work out that this little arrangement gives the defendants a simple get out clause from the Qualified One Way Costs Shifting (QWCS) proposed by Lord Jackson – a scheme which he maintains means claimants don’t need After the Event Insurance any more. So here’s a question – what happens if a defendant insurer makes an early offer on each and every case against them? Doesn’t this mean that all of the claimants will then face a (significant) costs risk? Now I am all for this (after all we sell ATE Insurance so want a reason for people to buy our products) but doesn’t the Part 36 rule simply make QWCS redundant? Aren’t we going to end up with claimants still facing costs risks in full but instead of being able to recover an After the Event insurance policy, they must instead pay for it themselves?

If the defendant insurance industry were to play a game of poker they would clean up. How on earth did they manage that one?

Right – I have been asked to run another report so must go back to watching paint dry.

Box Legal Limited: After the Event Insurance Providers
www.boxlegal.co.uk  | daniel@boxlegal.co.uk | 0870 766 9997

 

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