Jan 31

Dissenting Voices

Posted in Personal Injury Claims, The Jackson Report

It is funny how some things stay with you, events in your life which help to mould your outlook and attitude.

I used to like maths (still do!). At school we had some brilliant teachers including Mr Mathias who had to be a maths teacher with that name. He used to set us interesting problems not just sums – and would get us all to discuss solutions. I can’t remember the problem he set that day but I remember his words afterwards. Someone gave the answer and he asked who agreed with them. All the class put their hands up except me. So he asked me my answer which I gave (which was different). He then said, that you had to be very sure about something when going against an overwhelming majority as more often than not, the majority will collectively have the right answer.

So lets look at Lord Jackson. He appears to be becoming a lone voice in the reform debate and is obviously so concerned that he has produced his own comments to the consultation in an attempt to head off the criticisms now coming at him from all angles. Defendants don’t want one way costs shifting and nor does APIL or MASS, charities, or claimant solicitors. His attitude is that is he right and that exceptions can be ignored.

He was recently involved in the case of the Scout Association v Barnes in the Court of Appeal. He thought that there was nothing wrong in scouts running around in darkness playing a game but the two other senior Judges disagreed and said that the game wasn’t enhanced by turning the lights off but was just made more dangerous. It seems Lord Jackson’s peers also don’t hold the same opinion with regard to claims as he does.

It seems that there momentum has been established to change the system but we must fight against this lone voice otherwise he will persuade the Goverment to use a system which will be the wrong solution.

…. and the maths question – was I right?

No I wasn’t.

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

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Jan 28

Caselaw Review: Barr v Biffa Waste Services Ltd

Posted in After The Event Insurance, After The Event Insurance

The Issues: Should the Claimants in this group action be required to disclose a copy of their After the Event Insurance policy to allow the Defendant to examine the extent of protection provided by the policy and to assess its potential financial exposure.

Held: Traditionally, insurance policies were considered a private matter between the insured and the insurer and were therefore not generally disclosable. However, ATE insurance policies are a relatively modern creation and there were far fewer decisions dealing with disclosure, or other issues.

It was held that there was a difference between liability or BTE insurance, which may have been in existence for years before and have nothing to do with the events which gave rise to an action, and ATE insurance, the inception of which might be the trigger for the proceedings. In this case, the group litigation depended on the After the Event insurance policy without which there would be no proceedings at all (para 43). The Claimants’ solicitors had sent a mail shot letter to potential claimants referring to a no win no fee agreement and to the existence of the ATE insurance policy “to cover any potential cost liability”.

For these reasons it was concluded that the ATE insurance policy was a relevant document to these proceedings and, in accordance with CPR31.14, it should be disclosed for inspection, but with the amounts of the premiums redacted (para 52).

Comment: Although the facts were rather unusual in this case the principle that an ATE insurance policy is disclosable does seem to have been set, and this is especially the case where the action is only being pursued because of the existence of the After the Event Insurance policy.

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

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Jan 26

Case Management Systems & Nissan Micra Part II

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

Let’s deal with the Nissan first shall we.

You may recall my dilemma. I had parked it with the passenger door against a wall and found it had a flat battery. The only way in is a secret key hole on the passenger side (the central locking only works if there is power!) and I can’t open the door to get to the bonnet catch due to the wall.

Anyway, I have had a few suggestions via the blog:

  1. Go up underneath and get to the battery that way – What am I, a contortionist?
  2. Get a load of strong mates to bounce the car away from the wall – Yes would work but my mates work in offices and the closest they have been to anything physical is listening to Olivia Newton John.
  3. Smash a window – Yes would work but don’t fancy the repair bill

Anyway, I have decided to go with: Get another car and drag it out using a tow rope. Just need to find a rope. And another car.

Right – back to work.

Do you have a case management system? They may seem daunting at first but odds are that, if you are reading this blog then you are a bit IT savvy so you may already have one. Why am I mentioning it? Well, if you don’t have one I recommend you do. And guess what? We are giving one away for any new firm signing up to our After the Event Insurance scheme!

Blimey I hear you say. Are there any catches? Surely it isn’t a very good one. Well you would be wrong.

The offer is for the Proclaim case management system written by Eclipse. They are the market leaders so it is an excellent system.  The offer includes the software, all hardware and training. Not bad. Only condition is you have to use our ATE insurance for a minimum of two years. In addition, we will link the system to ours so all admin concerning the ATE policies will be removed.

Can’t say fairer than that.

Right, now where is that washing line.

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

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Jan 24

Caselaw Review: Burgess v J Breheny Contracts Limited – OK to Purchase ATE Insurance Post Admission

Posted in After The Event Insurance, After The Event Insurance

The Issues: The Claimant claimed for injuries suffered through dust inhalation. Was it reasonable for the Claimant to purchase an ATE insurance policy with a premium of £2,730 (inc IPT) after the Defendants had admitted primary liability but had expressly reserved their position on causation?

Held: In Master Haworth’s judgment there were a number of risks which it was proper to insure at the time the policy was taken out, some 5 months after primary liability had been admitted. These were:

  1. A real risk on causation, i.e. that the Court would find the dust exposure had not caused the injury;
  2. The risk of the Defendant withdrawing its admission;
  3. The risk of the Defendant making a Part 36 offer which the Claimant does not accept but fails to beat;
  4. The risk of an adverse interim costs order; and
  5. The risk of failing to recover a disbursement

It was therefore reasonable for the Claimant to purchase an ATE policy after an admission of liability, and Master Haworth concurred with the judgment of HHJ Inglis in the Avril v Boultby (2008).

Secondly, a premium of £2,730 (inc IPT) was reasonable in all the circumstances.

Comment: The High Court has approved the recovery of an ATE insurance premium taken out after an admission of liability, because of the continuing risks. It is fair to comment that in this case the Defendant had specifically reserved their position on causation, but nevertheless, the rationale of this decision was based on the 5 risks identified above, of which causation was only one. For a similar decision where the Defendant admitted liability without making any comment on causation, see Avril v Boultby (2008) which the Court specifically approved in this case (para. 27).

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

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Jan 20

Lord Jackson Submits His Own Response to Consultation

Posted in Personal Injury Claims, Solicitors, The Jackson Report

Lord Justice Jackson has sumitted a response to the consultation on implementing his own proposed reforms!

Not surprisingly, he thinks his proposals are still brilliant – the best thing since sliced bread.

Download his letter to Ken Clarke and his submission here:

We are working our way through it but one obvious poser – if you turn to the back, there is a nice little graph showing how the majority of claimants will be better off (taking into account more damages less success fees etc). Lord Jackson’s starting point for his report is that the balance for claims is currently tipped unfairly towards the claimants and the poor old PLC insurance companies are being treated unfairly. So answer me this:

If Jackson is proposing one way costs shifting so claimants won’t face any costs risk (the MoJ have said this will increase the number of claims made) AND claimants are going to be on average better off (see the graph), how does that make things more fair on the defendants? I can’t work it out. Can anyone help me? 

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

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Jan 18

Success Fees, Naomi Campbell & The European Court of Human Rights

Posted in General, Solicitors, The Jackson Report

You couldn’t make it up.

The European Court of Human Rights has ruled that The Mirror’s right to freedom of expression was violated by the 100% success fee that Naomi Campbell’s lawyers were awarded following her 2004 breach of privacy claim. The Mirror had originally written a story about the Supermodel’s alleged drug addiction (I am choosing my words very carefully here).

What does this mean? Well bizarrely for starters, The Mirror can seek compensation from the Government (so that means us) for the ‘violation’ plus no doubt some serious legal fees (I wonder if there is a success fee there as well?).

Next of course, this adds fuel to the fire that is Lord Jackson’s report and his proposal to cap success fees at 25% of damages. This is going to happen – the Government can’t afford to be in breach of the ECHR but libel claims or privacy claims are very different from personal injury claims so is it right to apply a broad brush approach? We don’t think so. If you agree – get your submission in to the Ministry of Justice before 14th February.

I feel violated.

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

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Jan 17

Credit Hire Tutorial

Posted in General, Personal Injury Claims, Road Accidents

Is it reasonable for a claimant to enter into a credit hire agreement if he has been offered an equivalent vehicle free of charge, when will spot hire rates apply (i.e. hire costs without any additional charges for providing the vehicle on credit) and how are ‘spot hire’ rates assessed?

Case Law:

  • Copley v Lawn & Others (2009) – refusing defendant’s offer of a ‘free’ car will not destroy claim for credit hire
  • Dimond v Lovell (2000) – a claimant cannot recover additional charges for the hirer providing the vehicle on credit
  • Lagden v O’Connor (2003) – where a claimant is unable to pay hire charges, i.e. they are impecunious, they can recover additional charges for the hirer providing the vehicle on credit.

Solution:

The answer will depend on who makes the offer.

If the offer is made by the claimant’s own insurer then the claimant can normally recover the cost of hire as the Courts have tended more recently to favour the argument that benefits acquired under an insurance policy should not be taken into account in assessing loss or mitigation.

The position is similar if the offer is made by the defendant’s insurer, although there are some differences. In the recent case of Copley v Lawn & Others (2009) the Court of Appeal recognised that defendant insurers were not in fact offering a “free” car, but instead they were paying for a hire vehicle with the cost being hidden from the claimant. In reality the offer is to find and then pay for a hire vehicle and unless the claimant, or their advisor, is aware of what hire charges the defendant’s insurer is able to secure, then they are unable to compare the vehicle being offered against one the claimant can arrange.

It was therefore concluded that:

  1. It is not unreasonable for a claimant to reject or ignore an offer of a replacement vehicle from a defendant (or their insurer) which does not make clear the cost of hire to the defendant for the purpose of enabling the claimant to make a realistic comparison with the cost they have, or will incur, when arranging a replacement vehicle through a credit hire provider.
  2. Following Strutt v Whitnell (1975) , if a claimant does unreasonably reject or ignore a defendant’s offer of a replacement car, the claimant is entitled to recover at least the cost which the defendant can show he would reasonably have incurred, i.e. he does not forfeit his damages claim altogether.

To that extent, the general rule that the claimant can recover the ‘spot’ or market rate of hire for his loss of use claim was upheld, unless and to the extent that a defendant can show that a car could have been provided by them at a cheaper rate.

Credit hire companies include within their credit hire charges, additional charges for the credit and the litigation services they provide. However following Dimond v Lovell (2000) a claimant is only entitled to recover the ‘spot’ hire rate, i.e. the rate it would have cost the claimant to hire a vehicle in their locality under an ordinary hire agreement.

The exception to this is where the claimant does not have the personal means to make immediate payment for a hire car ( Lagden v O’Connor (2003) ). But how is the claimant’s impecuniosity decided? In Lagden, Lord Nichols said that it was where “there was an inability to pay hire charges without making sacrifices [a claimant] could not be expected to make”. Lord Hope however suggested that impecuniosity was where payment up front would be an unreasonable burden; and in his view the possession of a credit or debit card would suggest that someone was not impecunious as this would give them the ability to pay without a credit hire agreement.

And how are ‘spot hire’ rates assessed?

In practice, it seems that judges tend to favour the ‘reasonable sacrifices’ test, although the possession of a credit card will often be explored by a defendant.

Defendant’s often rely on reports from Autofocus which attempt to establish spot hire rates local to the claimant. The burden of showing whether or not a rate is reasonable is on the defendant but in practice the claimant will have to rebut Autofocus by showing local rates that are higher than those quoted.

The length of hire may also be challenged, as the claimant can obviously only recover the cost of hiring a vehicle for as long as is reasonably necessary. In most cases 2 to 4 weeks is considered reasonable, dependent on how long the claimant’s vehicle is off the road, and if the hire lasts longer then this will have to be justified.

Another challenge might be to question whether there was a need for a hire vehicle at all, e.g. if the claimant is on holiday or if his injuries prevented him from driving (watch what the medical report says on this) then it may be difficult to justify hiring a replacement vehicle. In addition, if the claimant owns a second car that could have been used, it is likely the claimant will need show that an additional hire car was required.

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

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Jan 13

Flat Battery (and why solicitors don’t insure cases)

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

Before I get onto After the Event Insurance, I have a problem.

We have a run-around Nissan Micra which to be honest we don’t use very much. It is on the drive parked with the passenger side against a wall. It has been there a while so this morning I thought I had better start it (we are going to sell it). Guess what? Yep – flat battery. Not the end of the world I thought but then spotted a problem. You see, in the old days, before cars were opened with a press of a key fob, you used to open the door with a key. Well the Nissan doesn’t have any key holes – it is all done via the fob, which is fine as long as you have some power….

So how do you get in? Surely they would have allowed for cars having flat batteries now and again? A quick look on the Internet and bingo, they did hide a key hole away- under a removable panel on ….the ………..passenger ………….door………… handle.

Oh dear. I can now unlock the passenger door, but I can’t climb in due to the small matter of a wall being in the way. The windows are, you guessed it, electric, so I can’t wind them down and climb through and the other doors are still locked (including the boot).

Any suggestions?

Whilst I ponder this problem – here is another poser. What is it about After the Event Insurance that causes over a quarter of solicitors to decide not to bother insuring their client’s cases? We have obtained information which indicates that an incredible 27% of firms fail to insure some or all of their cases - prefering to let their clients face the risk of adverse costs rather than taking out ATE cover.

Surely this is madness? After all, policies are (currently) recoverable from the defendant, protect the client from adverse costs and own disbursements and don’t have to be paid until the end of the case. Isn’t this a win-win situation for firms and claimants? Well obviously not.

The problem, in our view, is the perception of (a) the admin normally associated with policies and (b) the solicitor’s own view of the prospects of success. Let’s look at these:

(a) Admin

Most policies have a detailed application process, normally a form to fill in which can take some time and sometimes a fee is involved. In addition, many policies require the solicitor to provide a progress report at key stages and the firm may need to request permission if they want to incur unusual disbursements for example a second medical report. Solicitors see this as a burden that they don’t need – particular when linked to (b(3)) below.

(b) Prospects

Solicitors quite rightly must assess prospects of success before taking on a case. At this stage they have probably placed the claim (in their minds at least) into perhaps three different categories: (1) Propects marginal but worth a punt (2) Propects quite good but may be a split liability or some risk of losing (3) Dead cert.

Our research shows us that categories (1) and (2) are generally always insured as the solicitor thinks there are risks and so the admin (a) is worth it – but Dead Certs (3) generally aren’t insured. This can be expressed in a formula: Too much admin + Very low risk of losing = Not worth insuring.

Simple. The problem is – dead certs can be lost. What about causation issues and part 36 offers? What about lost interim applications? We see several of these claims every day.

So what is the answer? Well, if you remove the admin then the formula becomes more straight forward: Low risk of losing + easy to insure and no reporting = Worth getting cover anyway just in case.

This is what we have done: a simple on-line application (30 seconds), no reporting and no requirement to get permission to do anything.

Much easier than getting into a Nissan Micra.

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

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Jan 10

Taxi

Posted in General, Personal Injury Claims

No, not a reference to Heathrow and my attempts to get away on holiday but to our new branded taxi which is now doing the rounds in Manchester (see arty picture below).

Actually, we seem to have been lucky to get away at all over Christmas. One of our neighbours spent all night at Terminal 3 and was then told her plane was cancelled. They were going to New York but didn’t manage to rebook for a week. Another neighbour going to Goa was actually in her plane on the runway when the snow came. She was still there 10 hours later! When she finally got off, they told her to wait in the airport which she did all night – then they cancelled the flight. She has only just got her bags back. What a way to run an, er… railway airport. So I shall stop moaning about 12 hours in the airport with 3 children….

Back to the taxi. We thought it would be good to have one where most of the PI firms seem to gather. Not sure why personal injury firms have clustered in and around our second city. It might be the proximity to industry or perhaps the Accident Group influence. Maybe it is just a nice place to live (our marketing manager Kirsten says it is – that is where she is based).

Anyway, we thought we might have a competition to see who can spot the taxi – thought we could call it ‘Spot the Box’ (although happy for you to give some alternatives). Maybe there will be a cash prize each week…

Watch this space.

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

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Jan 5

PI Fire Sale – Last Few Days Left

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

Bit dramatic I know but it is effectively what the Government is trying to do. All submissions on the Jackson consultation must be in by 14th February and after that they will reply in the spring with details of how they are going to decimate the industry.

I may sound bitter (still recovering from spending 12 hours in Terminal 4 – more later) but we have a fight on our hands here. It is extremely important that everyone submits their comments to the MoJ so that they don’t just receive reports from large organisations. I have included a link to the consultation below and details of where to send it.

The consulation is long and a lot of it won’t apply to your firm but some bits will. Simply write a reply refering to the numbered parts of the consultation you wish to comment upon – there is no need to reply to all of it! We need to back up comments made with hard facts – example cases where your input was crucial and statistics for cases. We also need information about the RTA portal. Is it working? Do you have examples of abuse from defendant insurers? The more details the better.

Please don’t leave the submissions for APIL or MASS – your input is very important and may sway the MoJ to be more generous to you and your clients. Don’t allow yourself to think you are too busy to do this – spending half a day on this now could save your success fees on all of your future cases. This is much more important to your business than Mr Smith’s witness statement which can wait until tomorrow.

The consulation document is here: Proposals for reform of civil litigation funding and costs

Once you have written your submission send it recorded delivery to:

Annette Cowell
Ministry of Justice
Postpoint 4.42
102 Petty France
London SW1H 9AJ

May the force be with you.

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

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