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!

comments: 0 »
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

 

comments: 0 »
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.

comments: 1 »
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

comments: 1 »
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….!

comments: 0 »
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.

comments: 0 »
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

comments: 2 »
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.

 

comments: 0 »
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….

comments: 1 »
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….

comments: 0 »
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.

 

comments: 0 »
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….

comments: 1 »
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.

 

 

comments: 0 »
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

comments: 0 »
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

 

comments: 0 »
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

 

comments: 1 »
Oct 31

Scary Referral Fee Ban

Posted in General, Guest bloggers, Personal Injury Claims, Road Accidents, Solicitors

It’s Halloween.

Last year my teenage daughter forgot it was the 31st of October and answered the front door in the dark to be confronted by some pretty scary masks – she let out an ear piercing scream and slammed our front door in some poor kids faces – oh dear, we seemed to get dirty looks from our neighbours for months afterwards!

Yes – as we all know, a lot of things can look a much scarier than they really are at this time of year……and I am beginning to think that the Government’s ban on referral fees may be one of them.

It’s obvious of course, that the Government never really believed it could ban referral fees. It would loved to have done so, but could see it was impractical. Then Jack Straw embarrassed the Government by proposing it himself. He had just discovered that this sort of thing was going on, despite himself having been Justice Minister for more years than anyone could remember. The Government couldn’t afford to have the Opposition out do it on this issue, and promised it would introduce a ban (although even then, it acknowledged the difficulties by refusing to give any time limit for doing so).

The latest Government amendment may in fact bring us some warm cheer as the nights get colder. Ken Clarke’s latest amendment proposes that the ban on referral fees will not apply if the payment is made “as consideration for the provision of services”. After a moment of extreme puzzlement, things are beginning to become clearer.

The Government is not really planning to prevent Claims Management Companies charging for their services. This of course would have effectively put CMC’s out of business (or just forced them to form ABSs!) which would have been odd since it was the Government which was regulated them. The proposal is now that they can legally charge as long as they can show they are charging for a service which they have carried out. They will not normally struggle to show this, particularly since they often complete the Claim Notification Form for motor claims, or at least provide all of the information necessary to do so. They also tend to meet clients, explain documentation, get CFAs signed etc. etc. etc.

What will be banned is a payment to anyone who simply supplies a name and address in return for a fee – what might be termed a “pure referral”. This would cover motor insurers, the police and perhaps some body shops and vehicle recovery companies. They don’t perform any work for solicitors – they just receive payment for knowing who has had an accident.

The larger the organisation (motor insurers and the police) the harder it will be for them to sidestep such a ban but clearly the net effect of the Government’s current proposal is that if you carry out the normal work of a Claims Management Company then you are unlikely to be affected. Some people may think that legislation which prevented the large motor insurers from receiving a fee for “3rd Party Capture” might be the best Christmas present they could hope to receive.

We will have to wait and see. But as I said, at this time of year, things can look much scarier than they really are.

Simon Pinner

Director of Box Legal Limited

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

 

 

comments: 1 »
Oct 21

Referral Fee Ban ‘Could be tricky’

Posted in General, Personal Injury Claims, Road Accidents, Solicitors

Says the Government.

Well I won’t tell you I told them so but….

You see the problem they have is, money changes hands in all sorts of transactions in return for business and so although they are called ‘referral fees’ and have been made to look dirty by certain members of the press and parliament, in reality they are payments for business.

Let’s look at some other so called ‘referral fees’ shall we?

  • When your mortgage adviser finds you a mortgage – the bank pays them some money – is that a referral fee?
  • When a price comparison site passes through a customer wanting car insurance, they take a share of the policy – is that a referral fee?
  • When an estate agent puts you in touch with a surveyor, they get a payment – is that a referral fee?
  • When you recommend your bank to a new business customer, some of them pay you for the introduction – is that a referral fee?
  • When you sell something on eBay, they take a percentage – is that a referral fee?

I could go on. And on. And on.

For some reason, because the ‘thing’ being sold is not an insurance policy or a customer buying a widget but a person who has been injured, the Government et al are in uproar but why should someone needing to find a legal service just because they have been injured be any different from someone needing to find a mortgage or car insurance? Well the simple answer is there shouldn’t be a difference.

And there lies the problem. You see there are European laws against restraint of trade and lots of other regulations which mean the Government is going to find it difficult to ban fees for just one area of business. And that is before they try to actually define what a referral fee is (see my earlier blog on this one).

They have backed down following all the shouting by Jack Straw that it should be made a criminal offence and I think they will back down on a ban. It will be too difficult to define and enforce and will open the door to challenges, judicial review etc.

You er, heard it here first.

P.S. I am now off for week (it’s half term don’t you know). Will endeavour to post something from Toys R Us or wherever I end up.

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

comments: 0 »
Oct 14

£9.7 million After the Event Insurance Policy Allowed by Court of Appeal

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

The Court of Appeal has just heard a costs appeal in Motto & Ors v Trafigura – the group action brought by Leigh Day and Company on behalf of 30,000 Ivory Coast claimants who sufferred illness following the fly tipping of toxic waste by the defendant. Now I have written about this case before but this time the hearing was looking at the ATE Insurance policy and the original 100% success fee being charged by Leigh Day and Co and counsel. In an earlier decision, Master Hurst had allowed the ATE premium in full but had reduced the success fees to 58%.

Well to cut a long story short, the success fees reduction to 58% was upheld and so was the decision to allow  the After the Event insurance premium in full. So that’s nearly £10 million for the underwriter. Nice.

Some important legal points were decided as well. One of the issues were the costs incurred by Leigh Day & Co in dealing with 30,000 CFAs and liaising with the ATE insurer throughout the case. It was decided that these costs couldn’t be recovered from the defendant. Logically, the Court of Appeal said that, when a solicitor was dealing with the signing of the CFA by a client, they weren’t actually a client at that point – and so the time spent was really down to marketing or negotiating rates with the client i.e. an overhead. It was only after they had signed that they became a client. All costs prior to that couldn’t be the responsibility of the defendant.

In relation to the costs associated with the ATE policy, Lord Neuberger said:

“The precise dividing line between recoverability and irrecoverability is, perhaps inevitably, somewhat blurred and subjective. However, as I see it, the cost incurred in having such discussions and taking such instructions was not so much a cost of the litigation as a cost which was collateral to the litigation, being a cost incurred to ensure that the claimants were not at risk on costs.”

So there you have it. You can’t charge the defendant for dealing with your client’s CFA nor their After the Event Insurance. So make sure you pick an ATE policy that doesn’t require any admin.

I wonder who could supply one of those…..

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

comments: 0 »
Oct 11

Coming Soon – After the Event Insurance Provider to Launch New Website

Posted in General, Personal Injury Claims, Solicitors

Not much of a headline this. After all, I am talking about our own website as you may have gathered.

It has been a long time coming. Our old site grew with our business and so has become a bit of a strange beast with bits added on here and there. So we decided 6 months ago to build a brand new one and use the opportunity to jump forward in funtionality. A lot of it is top secret (it’s not actually but play along with me) so I can’t show you but below is a mock up of the home page. Now don’t try reading it as it is all gobbledygoop at the moment and the images are going to change (what has a child’s hand got to do with After the Event Insurance I hear you cry) but you can get the feel of it.

Launch date is expected at the end of this month but there are a lot of tests to run before hand and, I am having to re-write a lot of content which is one of my many excuses why the blog hasn’t been as up-to-date as I would have liked. This will be remedied in the near future.

Oh yes, any sensible suggestions on the website will be appreciated.   

 

 

 

 

 

 

 

 

 

 

 

 

 

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

comments: 0 »
Oct 4

Are you ready for the 6th October?

Posted in General, Personal Injury Claims, Solicitors

What’s happening? Big court decision? Massive European judgement about widgets?

Nope – as of 6 October 2011, firms must ensure that notepaper, website and emails say “Authorised and regulated by the Solicitors Regulation Authority”. Yawn!

This is all down to page 22 of the new SRA Handbook (the ‘Outcomes’ Section) which takes effect on the 6th.  Other statutory requirements also continue to apply, including the E-Commerce Directive 2000/31/EC and the Electronic Commerce (EC Directive) Regulations 2002.

Although this rule applies to letterheads, there is some comfort found in a letter from Samantha Barrass of the SRA in the Gazette of 22 September 2011. This said that although email footers, websites and computer templates can be changed relatively easily, the SRA would be “happy for firms to use up [existing] stocks and change their headed paper as soon as practicable in the next few months” in order to avoid waste.

So there you have it. The SRA is turning all green on us.

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

comments: 1 »
Sep 27

Part 36 offers – Carver v BAA does not apply to offers made after 1st October 2011

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

An important change is being made to the Civil Procedural Rules which is going to require you to review all of your existing Part 36 offers.

The CPR (Amendment No.2) Rules 2011, which come into effect on 1 October 2011, will overrule the decision of Carver v BAA plc [2008], which ruled that because the Claimant had only just beaten a Part 36 offer, he had failed to obtain a judgment which was “more advantageous” within the meaning of CPR 36.14, and the Defendant was awarded its costs from the date the offer expired.

The rule change inserts a new paragraph 36.14(1A) into Part 36 of the CPR, which states:

 ’For the purposes of paragraph (1), in relation to any money claim or money element of a claim, “more advantageous” means better in money terms by any amount, however small, and “at least as advantageous” shall be construed accordingly’

Section 1 (4) of these (Amendment No.2) Rules clearly states: “Rule (4) applies to offers to settle made in accordance with Rule 36.2 on or after 1st October 2011” so this will apply to Part 36 offers made on or after 1st October 2011, irrespective of when proceedings were commenced, or when trial takes place, but it will not apply to offers you have previously made. This being so, Carver will apply to any previous offers and it may therefore be extremely wise to repeat any Part 36 offers you have previously made in order to avoid a possible award of adverse costs based on Carver, provided such an offer still makes sense in the context of the particular claim.

So there you have it. A sensible rule change for a er, change.

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

comments: 0 »
Sep 20

Referral Fees – The Case for the Defence

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

So the Government wants to ban referral fees. We have all heard about this and Jack Straw’s campaign (don’t worry, I shall get to him later), but how exactly are they going to do this – and when?

Well the answer is, I am not sure that they can. You see, the Government has a large number of hurdles to jump and proberbial holes to plug before they can get anywhere near to legislation to ban them:

  1. First there is Europe. Referral fees are permitted in Europe so banning them here is going to be difficult – there may be anti-competitive claims arising.
  2. The Legal Services Board carried out a study of them and concluded that a ban wouldn’t work so it was better to legislate and control them. There was a call for greater transparency rather than sweeping them under the carpet. Better to have the referrers inside the tent er, you know - urinating out rather than outside the tent …. (you get my drift).
  3. Alternative Business Structures are soon to be permitted – which means a large claims management company and a solicitor could join forces. Business as usual.
  4. Referrers could be taken on as employees of solicitor firms on a low basic wage with a bonus for the number of leads generated. Would this be allowed?
  5. Solicitors are allowed to sell cases to other solicitors (and always have been allowed to do this). Would this practice be banned? What about file transfers with WIP being paid? Is that ok?
  6. The proposal is to ban referrals for personal injury claims only – not conveyancing or any other legal matter. Surely this is inconsistent and would be challenged.
  7. A lot of solicitors receive work for ‘free’ in return for doing other things. For example, some firms get PI claims from insurers but then have to handle their uninsured loss recovery work for nothing. This is a referral fee isn’t it? Is this going to be outlawed?
  8. What about a free referral but on condition you give a medical agency 10 medical instructions? Is that a referral fee? Is the Government going to ban freedom of choice and legitimate business arrangements?
  9. Here’s another one: 10 firms get together and form a company which advertises for PI claims. It is run by 5 non-lawyers. They all fund this marketing company based on the number of leads they take on. Is this arrangement a referral fee? Is the Government going to ban this? What if the company isn’t a company but a partnership – or a non-profit making organisation. Does the membership of that organisation or slots bought make the arrangement against the rules?

You see, I have only been writing this for about 10 minutes and already I have thought of several serious problems. Give me a few days (and the PI industry a month or two) and there will 100 different options on the list. The problem the Government has is that no one can say for sure what a referral fee is – and if you can’t properly and fully define it then you can’t ban it.

And so to Jack Straw. Has he really though this through? He is up in arms about referrals and claims management companies. He is incensed that insurers have sold injured people’s data to a claims company. The thing is, this goes on in all industries. Loads of companies sell personal details to other companies - which is why you no doubt have had several calls about double glazing, kitchens etc. Are they allowed to do this? Well yes because we have consented to it. Somewhere we have bought something where there is a clause saying the seller can share the data. Can this be banned? I suppose so but it has to be industry wide – it isn’t just Personal Injury’s dirty little secret – it is the western worlds.

Mr Straw is also saying the practice of selling PI claims should be criminalised. Well why didn’t he criminalise it or ban it when he was the Minister of Justice? Well the answer is, he looked at banning referrers but then decided against it.  Instead, he oversaw the cleaning up of the claims management companies by requiring their registration. Why the change of heart? I have no idea.

And you see, he might just be shooting the Labour Party in the foot. Would you believe that in 2009, over 60% of Labour Party funding came from Trade Unions? Where do the Unions get their money from – well membership fees but a large part of their income comes from notional After the Event Insurance policies (soon to be banned under Jackson) and referral fees. Supporting a ban of both is going to cut the amount of money Trade Unions have available and so cut the Labour Party’s funding. It is also going to annoy the Trade Union leaders somewhat.

Maybe, the Labour party has decided they don’t need the unions any more. Mr Straw is playing a dangerous game me thinks.

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

 

comments: 0 »
Sep 8

Work work work

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

Oh my days. What a week.

To say we have been busy is an understatement. Just a few days into our new financial year and we are 25% up on new policies written compared with September last year.

And that’s not to mention our new website which we have been working on feverishly in the background (thanks Roger!). Or our link to a leading rehab provider  – press release to follow!

So you see, I have an excuse – of sorts. Anyway, let’s have a quick round up of developments outside of Box Legal shall we?

Well, on the Jackson front, Labour MPs seem to be proposing all sorts of amendments to the Legal Aid and Sentencing Bill - with some saying they are attempting to goad the Lib Dems to vote against the Bill’s passage. Anyway, no delays yet but who knows…

Defendant insurers (poor things) are meanwhile blaming claimant solicitors for just about everything. The masters of spin are saying it is the solicitors’ fault that they, the insurers, are having to receive referral fees for cases – running into many millions of pounds. Good eh? If you shout something from the rooftops for long enough, some people might believe you but come on Mr Admiral? Are we really to believe that it is Mr Blogs the high street solicitor who has caused you to turn over £1 billion including tens of millions in referral fees? Mr Blogs has a lot to answer for – it is his fault that car insurance premiums are rising don’t you know.

Well, the Office of Fair Trading may be investigating the rises – we shall see what they come up with but don’t expect the answer to be that it is the insurers fault. Watch out Grandma Smith – it will no doubt be you who will be taking the blame.

What else? Ah yes, premium challenges. Those pesky insurers keep on claiming that clients can’t take out a fixed premium After the Event insurance policy but guess what? Those nice Judges keep telling them they are wrong. It is 3 – 0 to us so far and no sign of any weaknesses. You would think they would give up – would save a fortune in legal fees but then, insurers were never short of a bob or two.

So that’s all folks. Except to say, I hope to become a bit more, er, regular in future.

P.S. My niece (fresh out of university) is looking for some work experience in a law firm (there is only so much insurance a young girl can take). Any one able to help her out?

STOP PRESS: The Ministry of Justice has announced it will be banning referral fees. No timetable has been announced nor any proposals. Watch this space.

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

comments: 0 »
Sep 1

Happy New Year!

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

Nope – I’ve not gone mad. The reason I have been quiet for a week is that Box Legal has just finished it’s year end and so today is our 9th accounting year!

Now for After the Event Insurers, 9 years is a long time. When we started out, the market was very different with fewer players (and cowboys!) around. Now it is a cutthroat business and, with Jackson looming, it is getting even more so.

But we are still here and in fact, we have had a record year.

Record new policy numbers, record number of policies paid in a year and in a single month (June) and record new sign ups!

So we must be doing something right. Kirsten, our marketing guru, has been re-visiting 2 or 3 firms a week since joining us last year and, the consensus from our panel is, we provide a good service. This not only includes speed of response and the ease at which policies can be requested, but also low admin and full legal support services.

Now I am not one for blowing my own trumpet but with a growing team here, I would like to blow er, theirs. We have a great bunch working for us and our success is largely down to them. So thank you to everyone and long may it continue.

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

comments: 0 »
Aug 24

Jackson Working Party Announced

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

The runners and riders for the Ministry of Justice steeplechase that is the Jackson Implementation Working Committee have been announced.

True to form, there are some old hands mentioned and the expected organisations. Interesting though, it is chaired by Alistair Kinleyn of Berrymans Lace Mawer and formally of the ABI. So I wonder which side he will be on then? Slightly pro-defendant? Of course not. Perish the thought.

The other 17 are:

Coleman Tilley partner Janet Tilley
Managing partner of Coleman Tilley and responsible for the firm’s personal injury practice.

USDAW legal advisor John Usher
Trade union legal consultant and lecturer in labour law at Birkbeck College.

Legal Services Commission’s Former Head of Funding Colin Stutt
A barrister formerly head of funding at the Legal Services Commission (formerly the Legal Aid Board).

Hugh James partner Mark Harvey
Head of the  firm’s claimant division.

4 New Square’s Nick Bacon QC
A costs specialist, took silk in 2010.  

Bott & Co named partner David Bott
Head of the Association of Personal Injury Lawyers.

Keoghs partner Don Clarke
Vice president of the Forum of Insurance Lawyers.

Thompsons partner Judith Gledhill
Head of personal injury at leading trade union firm.

McGuireWoods partner Hardeep Nahal 
International commercial litigator.

Hogan Lovells partner Graham Huntley
Partner dealing with disputes involving banks and other financial institutions.

Norfolk County Council principal risk officer Mandy Knowlton- Rayner
Knowlton will represent the views of local authorities.

Tesco lawyer Kay Majid
Currently senior counsel to Tesco, with a practice focused on litigation, intellectual property and data protection. 

DAS general counsel Kathryn Mortimer
Mortimer was appointed in 2006 to help DAS’s transformation into an alternative business structure.

QBE European Operations underwriting manager Rocco Pirozzolo
Barrister Pirozzolo is the legal expenses underwriting manager at QBE.

Birmingham City Council lawyer Hilary Homfray
Litigator

Aviva senior solicitor Howard Grand 
In house solicitor for insurance giant. 

AXA’s David Fisher
In house expert in catastrophic and injury claims at AXA Insurance

So there you have it. I make it an even spread between defendants and claimants provided Colin Stutt could be said to be more claimant orientated. Not sure about that one as he is involved in drawing up rules regarding Clinical Negligence and who can practice it – for the commission which is effectively the Government at arms length. We shall see which way he jumps.

Timescales are tight. The Ministry of Justice says the working party should complete their discussions and come up with draft rules by the end of September.  I think this is doubtful but who knows – maybe they will all agree?!

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

comments: 0 »
Aug 18

Allianz Announce Revamp of Business Model Post Jackson

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

They will also be announcing that bears prefer the woods for defecating and, contrary to popular belief, The Pope appears to be Catholic.

Big headline this in The Insurance Times. I mean come on – so they are going to remove recoverability of After the Event Insurance, introduce Qualified One Way Costs shifting and what – ATE insurers are going to keep on selling the same products? Just an excuse to get their name in the paper I suspect. I mean who would write about something like this then publish it? Er…..

Anyway.

That’s it.

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

comments: 0 »
Aug 15

Recovering Single Premium Policies

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

Still no call from the Ministry of Justice…..  I shall therefore continue with my day job.

A solicitor has asked me to write something about recovering After the Event Insurance premiums from defendant insurers. Apparantly, some insurers are mixing things up a little when it comes to the RTA Portal. I shall explain.

It used to be the norm (following Callery v Gray) that a single ATE Premium was recoverable from the losing party. That premium did not need to be the cheapest but had to be reasonable taking into account the risk, level of indemnity etc. Now Callery v Gray remains the key case with regard to ATE policies yet, with the advent of the RTA Portal, some insurers are arguing that claimants should be taking out staged and not fixed premiums. A staged policy is one where the premium starts off low but then gets increasingly more expensive as the case progresses to trial. The stages often involve being in the portal (which is the cheapest), dropping out, proceedings issued and trial. The premiums for the latter stages are very high with some insurers quoting over £3,000 when it gets to trial. Now that is a lot of money for an RTA claim you could have insured with a fixed premium of £371.00 at the start.

And so you see this is the problem. Defendant insurers are trying to have their cake and eat it. They are arguing cases in the portal should have low staged premiums (normally around £100) but they then argue against the higher premiums charged for those cases they settle or lose later on – saying in those cases the claimant should have bought a £371 fixed policy.

So how do you tackle this? Well, we have some bullet points for you to use in your replies:

  1. At the time the case commenced, the claimant did not know if the case would settle within the RTA portal process or not. The defendant is assessing the premium with the benefit of hindsight but at the time the policy was purchased, it was reasonable.
  2. Out of 31 brokers who offer ATE policies, only 8 offer staged policies. The vast majority therefore use fixed premiums. Claimants are entitled to recover ‘reasonable’ premiums and so it follows that ‘reasonable’ must include those offered by the majority of After the Event insurance brokers.
  3. The lower premiums for cases within the portal are not finite products. The policies are staged and you have to buy the whole product not just cover for the portal part of the claim. This means that the premium is not the £80 or £100 quoted but an amalgum average for all stages of a case. For example, a DAS 80e policy has 4 stages:  £79.80 if settled within the RTA portal; £397.50 if it drops out but proceedings are not issued; £848.00 when proceedings are issued; An additional open ended premium due 14 days before trial (individually assessed). Claimants cannot pick and choose different stages of the policy as they wish but must purchase the policy in its entirety before it is know at what stage the case will reach. This means they may be committing themselves to paying a premium of £848 or even several thousand pounds if the case gets close to trial. To work out an average, you need to apply some percentages to the various stages. Naturally, the portal won’t help with this - we wrote to them and they replied that they don’t keep this information – so we rely on our own experiences below.
  4. Assuming the best scenario is 70% of cases settle within the portal, 10% after, 15% after proceedings and 5% at trial, the DAS 80e average would be: 70% x £79.80 + 10% x £397.50 + 15% x £848 + 5% x £3500 (this is estimated for the final DAS premium) = £397.81. So basically more expensive than our single fixed premium of £371.00. If the settlement profile is worse (and we are hearing numbers of about 50% settling within the portal, not 70%) then the ‘average’ gets a lot worse for these staged policies – more like £450.
  5. There are of course many court decisions approving fixed policies, indeed in a 2005 case of J Tyndall v Battersea Dogs Home, the claimant took out a staged premium and the defendants then argused it should have been fixed! The court confirmed it was ok to have a staged policy but that the norm was for fixed premiums.
  6. Nothing in the rules which set up the RTA portal process said that only staged policies would be recoverable. Indeed, the Government specifically preserved the ATE market as it existed before the rule change.
  7. This argument has already been before a court. The defendant insurer argued that the claimant should be using a staged policy in the Wrexham County Court case of Watson v Johnson. They lost. The Judge ruled that it had not been established that staged premiums were cheaper and indeed were likely to be more expensive.
  8. Finally of course, nothing has really changed with the RTA portal process. The cases settling within the process would have been the ones settling before the rules came in anyway. The creation of the portal has not suddenly made wise old insurers throw up their hands and cave in on liability on cases which they could have won.  The chances of those cases being lost were always very low but the principle set out in Callery v Gray – that the ‘many pay for the few’ remains.  

So there you go. 8 paragraphs of wisdom should do it (thank you to Simon and Jon at this end who helped me with this).

As usual, the defendant insurers are using smoke and mirrors to try to save money. Don’t be fooled.

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

comments: 1 »
Aug 8

Jackson Working Party to be Formed

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

And so back to business.

You may have spotted that the Ministry of Justice has announced that they are to form a working party to help to develop the court rules and regulations to enable the Jackson reforms to be implemented. Basically, they are going to ‘invite’ relevant interested parties to help put some meat on the bones. And about time too.

Their remit will be to look at (and I quote):

  • Qualified one way costs shifting – atypical cases and behavioural aspects
  • Introduction of an additional sanction/reward under Part 36
  • The detail of the proportionality test – content of a Practice Direction – examples of when the test should not be applied.

No mean feat. I have already pointed out the great flaws in the Jackson reforms so we shall see how they cope with getting around the problems. Key here of course is (a) who is going to be invited to join the group and (b) how exactly will the group operate.

Let’s look at (a).

Well, you would hope that interested parties would include the Law Society, APIL, MASS, the ABI and Trade Unions at the very least.  I think however there will be another agenda going on with a little bias in the sides. I doubt very much they will be even with most money going on more representatives from the defendant brigade. Also depends on (b) of course…

(b) How exactly is the group going to operate.

I doubt MoJ is going to allow it to be a democracy with each interested party getting an equal a vote on proposals. I suspect the MoJ will simply listen and then ignore anything it doesn’t like when it comes to the drafting. If I am right with this then expect some fireworks and a few walk outs. I can’t see this process going smoothly and with this will be a danger that we will end up with unworkable rules.

Satellite litigation here we come me thinks.

Or maybe I am just a born sceptic.

Anyway, the MoJ have said that they will be picking the attendees from those who submitted responses to the Jackson reforms (remember them – the ones they didn’t read). Now we put a reply in drafted by our very own legal expert, Simon Pinner. So, who knows, it could be us shaping the future of civil litigation. Could also equally be Claims R Us Ltd.

Timetable is tight. The working party is to report by the end of September 2011 with a ‘workshop’ to be convened towards the end of October 2011 to be attended by experienced practitioners (both claimant and defendant) in all civil litigation practice areas.

Now we work fast here but this is a joke. There is no way a properly formed working party is going to be able come up with properly drafted rules in 7 weeks, not forgetting or course that most people are away during August.

More slight of hand going on here?

I am sitting by the telephone waiting for that call.

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

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Aug 1

Back to work

Posted in After The Event Insurance, General, Solicitors

It was very kind of Kirsten to praise my blogs and indeed to hold the fort most impresively whilst I have been away. In actual fact, I could have probably managed the odd blog from the beach but I have to say it was nice not to have to think of a topic and link it to After the Event insurance for a change.

So with my creative juices re er, juiced (?) what will be the topic for today? Well, for a breath of fresh air, I won’t be mentioning ATE insurance (apart from saying I won’t be mentioning it – and the reference above of course).

I thought I would talk about my holiday. N0 – not a blog’s equivalent of getting the family to sit through a slide show of yet another picture of someone pointing at something – but a bit of a personal reflective and to gain some perspective.

We went to Mauritius. If you haven’t ever been then be warned – it is a long way away but well worth the trip. The weather was good but they are having their winter at the moment which ironically is the same as our summer. Nice but we are not talking Mediterranean weather – sort of Goldilocks temperature.

Great hotel - very luxurious villa with our own heated pool! The kids loved it and their swimming improved no end.

Great food – long leisurely breakfasts followed by building sandcastles on the beach. Brilliant.

We had day trips out – a crocodile park and one where there were giant tortoises the children could ride on – I kid you not.

Also there was a tour of the south of the island -the sugar beet and tea plantations as well as the gorges and waterfalls. It is a beautiful place.

So what was the best bit for me? Well – none of the above.

There was an iPod dock in our villa. One evening, we came home after dinner and I popped my iPhone in the dock and put some music on. I will never forget it. The children just started dancing and my wife and I danced with them. It was magical. We could have been anywhere and for half an hour nothing mattered.

When you work hard it is nice to spend time with your family. It is what it is all about.

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

P.S. Proof of the tortoise below (ridden by my daughter Imaani)

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