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 »
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 »
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 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

comments: 1 »
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)

comments: 0 »
Jul 29

Why are you reading this?

Posted in General

My last day as a blogger for a while so I thought I’d complete my service with some further thoughts on Social Media. I recently read an article relating to social media and the most common sins. Whilst much of the article taken literally is true, I was disappointed with the authors stance and his literal take on the benefits of social media.  I will outline my point.

The author believes that there is a common misconception that social media is low budget. I would be interested in hearing why anyone has spent a huge amount of money on developing a social media strategy. It is free to sign up to twitter, Linkedin, facebook and the cost of a blog is minimal in comparison to a printed mail merge, or, sponsorship of an event.

 He also discusses how Tesco’s digital marketing officer has said they will use their digital marketing to “enrich and add value to the customer journey…” and how they should have discussed how they would use it to sell various items within their stores. Who in the current recession would be keen to hear how Tesco are planning on making us buy more. Firms are being pushed towards CSR policies, green policies and ensuring customers always receive the best possible service in the most holistic way. I do not believe for one minute that the Tesco supermarket giant has not thought this through. Of course they will use their strategy to sell more and their profits are evidence enough that this is the case, but they’re not daft enough to shout about it.

Apparently most big brands use social media because other brands are doing it. So why do we do it?

At Box Legal, we have significantly raised our profile through the use of social media (you’re reading this right?).

We are able to provide both our panel firms and possibly new firms with an insight into how we run our business. We are also able to offer advice and provide information on the various aspects of law and relevant newsworthy stories.  I believe, with the help of social media, we are able to add value to the current service we provide – all done in an eco- friendly happy way. And with that, I leave you until next time…

Nb. The article chosen for discussion is featured in Marketing Week, 28th July 2011 and is written by Mark Ritson.  

comments: 0 »
Jul 22

A little Box Legal and Social Media

Posted in General

So it’s down to me to come up with something interesting and exciting that could rival Daniels discussions.  Whilst I am not an ATE expert (although I am getting there…), having worked in professional services for a numbers of years and  worked closely with personal injury departments as a marketing manager, I would hope I am experienced enough to talk about that.

It’s been a busy week at Box Legal HQ with Daniel away. We are a very small team here which makes us quite unique. You will always get to speak to someone with a good knowledge of the legal process (Jon, Daniel and Simon are all legally qualified).This week, I have been busy visiting various panel firms in the North West. It’s a part of my role that I really enjoy, it gets me out and about and I  learn about how the different firms operate.

My role covers all marketing within the company and of course I am involved with social media . We have a blog (as you will know), a Facebook page, a Twitter feed and we all have a presence on LinkedIn. All are linked to one another so you may be reading this blog from a variety of places.

 I believe that social media has become one of the most important marketing tools we now have. With this in mind, I recently read a hilarious article about social media and how the normal protocol for how we act on a day to day basis seems to go out of the window when it comes to networking on sites such as these. Would you really walk up to someone in the street and poke them if you hadn’t seen them for ten years! Would you offer your friendship to various people and have a look at photos of their life without knowing them very well. While social media is vital to businesses, maybe sometimes we need to think a little bit more out of the box in the way we use it.  Below is a link to a YouTube video that will make you laugh. A good start to the weekend I think.      

http://www.youtube.com/watch?v=aDycZH0CA4I

comments: 0 »
Jul 16

Tick Tock

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

It’s that time again. I am off on holiday for the next two weeks so you will have to do without me for while. I think Kirsten might try her hand in my absence.

Before I go, let’s examine some issues regarding time shall we?

Starting with referral fees – me thinks their days may be numbered. Justice Minister Lord McNally is keen to ban them. Problem is of course - what is a referral fee? You may have read my blog concerning AXA – is your solicitor panel handling  work for you for free the same thing as paying for a case? The answer is yes in my mind. So how do you ban them? After all, Personal Injury Claims may be in the headlines but referral fees or ‘introductions’ are paid for all manner of legal work including conveyancing.  Before they were permitted, our friends Claims Direct managed to circumvent the rules with case assessment fees, client statement fees etc. You name it and there was a fee for it.

And if referrals are banned, is that going to be the end of claims management companies? The simple answer is no. They will join with solicitors – who rather conveniently will be able to offer them part of their practice in return thanks to the upcoming Alternative Business rules.

People don’t like insurance companies selling their cases so the political will is to ban them but the reality is likely to mean referrals simple morph into another form.

So what about Jackson? Well the timescale still indicates October 2012 for implementation. Which in legislation terms (excluding taking the country to war) is pretty quick. This is of course notwithstanding the fact that the Legal Aid, Sentencing and Punishment of Offenders Bill (LASPO)  is a very lengthy document. To keep the pedal to the metal, the Government has adopted the unique (and many say foolhardy) approach of fast tracking the consultation process. This has resulted in the scarcely believable time slot allocation of just 15 minutes per organisation. Now, LASPO is 187 pages long and contains no fewer than 119 sections. I calculate that they have therefore allowed each organisation to speak for just under 5 seconds per page. Now this is supposed to be the Government listening to esteemed organisations such as the Bar Council and the Law Society but clearly there is an agenda here. This procedure has judicial review written all over it. A more contemptuous attitude I could not imagine.

So the final subject on this topic is my flight time – 10 hours. It’s a long way to Mauritius you see. Longer than the Government will consult in total with all interested parties in the LASPO Bill.

You couldn’t make it up.

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

comments: 0 »
Jul 12

Things are hotting up

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

Just back from southern Turkey. Now I was expecting it to be warm – the forecast was around 32 degrees. This level of sun I can cope with – after all we had 2 days of these temperatures here (otherwise known as our summer).

Anyway, dead on the money – it was 32 degrees – on Friday. It then jumped 10 degrees in a day to 42 degrees on Saturday. This was a shock. If you ventured outside, it was like having a sauna in your clothes. Lovely.

So what has all this to do with After the Event Insurance or PI claims? Not a great deal but just a tenuous link to the state of things with (a) Jackson and (b) referral fees and a general round up.

It looks like the newspapers (what’s left of them) have the bit between their teeth about referral fees and insurance companies. We also had Panorama last night telling us that a lot of the PI industry is made up of scams and fake crashes and the Law Society coordinating a backlash against the Jackson Reforms. Amongst all of this, is the Government really going to force through a set of rules that only the defendants say will work? You bet.

Now you remember my questions to Jaggard and Axa?  Jaggards: ‘How can costs be rising if RTA claim costs are fixed’ and Axa ‘What do your panel of solicitors taking PI claims from you [now without a fee] do for free in return’). Well,  I have had very few replies from either of them. Now when I say ‘very few’ I mean zero. Come on – they are straight forward questions and we should be told. Anyone else have the answers?

I think I preferred Turkish heat. Unpredictable maybe but up front and in your face.

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

comments: 0 »
Jul 6

Admiral Insurance Worried About Referral Fee Ban

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

The chickens are coming home to roost. The pot and kettle are at it again. Something smelly is hitting the fan.

I am running out of idioms here.

Admiral Insurance made £142.4m profit last year from it’s motor arm (remember they are part of an industry pleading poverty to the Government). Now, 52% of this profit related to ‘ancillary sales’.

What is this? Well, I doubt Admiral sell many replica parrots or sailor’s hats so where could this £74.05m profit be coming from? Could it be from referral fees? Many leading experts think so and so does the stock market.

More evidence I feel that it is not the ‘claims culture’ nor adverts on TV causing a rise in motor claims. It is the insurance industry themselves.

Now what do you think they will be claiming next? I know, they will be saying that, by being allowed to charge referral fees, they can keep the cost of premiums down. If they weren’t allowed them then they would have to put the premiums up to keep as profitable. It’s an interesting argument but clearly flawed. If all insurers ceased flogging cases, the number of claims would drop and so the amount of money being paid out would fall as well.

But hey, I’m just a lawyer who runs an insurance broker. What do I know?

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

comments: 1 »
Jun 30

Referral Fees: AXA Jump Off the Band Wagon

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

It is great to see these masters of spin at work isn’t it?

First the ABI denied it – then they had to come clean and admit that insurance companies were selling car accident insurance leads. The  justification: If we didn’t do it then Claims Management Companies would do it so we may as well make the money.

Well rubbish. AXA have been found out and have tried to head off a PR disaster for themselves by suddenly becoming the good guys – ‘We will no longer charge lawyers referral fees’.

Now what does this mean? Will they no longer encourage their insured to claim personal injury? Will they still encourage them but pass the leads through for free? Will they ask for something in return from the firms receiving the cases – I don’t know but maybe they will have to do some uninsured loss recovery for free? You see there is more than one way to skin a cat so AXA may suddenly have seen the error of their ways but I am sceptical that there won’t be some sort of balancing of the books going on.

I know – why don’t AXA (and all other insurers come to that) publish their referral arrangements for us all to scrutinise?

They won’t of course. Is it all a conspiracy? Have the insurers deliberately driven up claim numbers so they can cry fowl to the Government who, let’s face it, have fallen for it hook, line and sinker.

I think an investigation is called for.

Less of the Shane Warne and more Bob Willis please AXA.

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

comments: 1 »
Jun 27

The Pot Calling the Kettle Black

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

Did you hear Jack Straw and a chap from the Association of British Insurers (ABI) on the Today programme this morning? No? Well, it went something like this:

Jack Straw’s friend had an accident about 6 months ago – no injuries and everything paid for by the other driver. He then started to get calls from Claims Management Companies asking him it he wanted to claim for Personal Injury. This went on for some time. The friend asked Jack Straw to find out how the Claims Companies got hold of the information about his accident. Well, after some digging, what do you know? The friend’s own insurance company admitted that they had sold the information to the claims management companies.

So there you have it – proof that the so called compensation culture is the fault of the defendant insurance industry and not due to adverts on TV. This is what we and many other companies in the know have been saying for some time – backed up by the data of course which shows all types of accident numbers reducing save for motor claims.

On the Today programme, the ABI representative got a real grilling from John Humphries (for it is he). The ABI’s justification for the practice is - wait for it – ‘if the insurers didn’t do it then everyone else would so the insurers at least make money out of it’. Well this isn’t bourne out by the figures – as stated above. Clearly this practice is driving motor claims higher. It should be banned.

When is the Government going to wake up and realise that they are being bamboozled by some very clever lobbying by the defendant insurance industry.

Unbelievable.

4.50pm Update: I have found the discussion on the BBC Website. Click here to listen: http://news.bbc.co.uk/today/hi/today/newsid_9523000/9523272.stm

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

comments: 2 »
Jun 22

Justice Bill is Published

Posted in General, Personal Injury Claims, The Jackson Report

It is all over the papers this morning. The tabloids all concentrate on the rights of home owners to beat up burglars and seem to brush over the other reforms.

To be honest, it is a complete mishmash of proposals from probation and sentencing to civil procedures and legal aid. There is so much there in the 96 pages that it is easy to overlook items.

Here’s a good one. As expected, the changes to success fees and after event insurance appear from part 43. Some bright spark has proposed that the cut off date for after the event insurance is going to be the date of the insurance and not the accident date. This means that solicitors are going to have to check very carefully that everything is insured prior to the reforms otherwise I can see some clients complaining (and no doubt crying fowl) when they have to pick up the tab for a policy required later in the case.  I am assuming the cut off date for qualified one way costs shifting is going to be the accident date though (can’t see how it can be anything else) and so there is a big hole here for solicitors to fall in to.

My view is that this legislation, although popular with the Daily Mail readers, won’t go down so well in the House of Lords. Of particular concern will be the reforms proposed to Legal Aid and we therefore expect some batting back and forth (still in Wimbledon mode you see) before it gets through. This would obviously be good news for the civil procedural changes although it would only delay the inevitable.

You can find the full Bill here: http://www.publications.parliament.uk/pa/bills/cbill/2010-2012/0205/12205.i-v.html

Watch this space.

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

comments: 0 »
Jun 21

Anyone for Tennis (or ATE Insurance)?

Posted in General, Personal Injury Claims, Solicitors

I have just realised that it has been a week since my last posting. It has been really busy here with new sign ups and policies. Contrary to popular belief, I do have other things to do at work – not just ranting away on-line.

Looks like Jaggards have been very busy as well – no explanation from them yet as to how costs can be increasing….

So what’s the subject for today? Well, as the tennis is on, I thought it could be something to do with that. I used to live in Wimbledon and was there for nearly 3 years (if truth be told it was in a flat about 20 mins walk outside the main town – more like Merton, but you know how it is). Each time the tennis came along I thought – I know, I will queue up and watch a match or two. You know what? I never got around to it. I always thought there would be next year and the queueing put me off a bit. So now here I am in North London and even more put off attending. I really can’t face the district line (they seem only to have about 3 trains) and what would we do with the kids? More hurdles so less incentive to go. And it is so much easier watching it erm at my desk on iPlayer (don’t tell the boss I said that).

Here’s a thought. If only we could make our After the Event Insurance like the iPlayer. No queuing, no long forms, no er, district line (you get the idea). What we need is a click and insure product available from the desktop so that people aren’t put off by the admin and hassle.

Well that’s exactly what we have got. Our insurance takes 30 seconds to apply for and the only reporting we need solicitors to do is tell when they issue proceedings. Very easy. What’s more, if the solicitor uses a case management system (for example Proclaim), it can link with our website which means firms don’t even need to fill in the form. Insuring a case is just two button clicks. And guess what? We are only a few weeks from launching our new website which will make things even easier.

No sleeping overnight in tents with our products.

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

comments: 0 »
Jun 14

Justice Bill is nearly ready & Jaggards at it again

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

A couple of topics today.

First let’s talk about Jackson. That well known supporter of the PI industry, Jonathan Djanogly has confirmed that the Justice Bill will be published later this month. It has been delayed due to the Impact Assessment not being ‘fit for purpose’ as judged by the Cabinet Office (no doubt something to do with being prepared before the MoJ could have read all of the submissions to the consultation, being based on Jaggards i.e. skewed data blah blah blah). A new impact assessment will be produced alongside the Bill and will no doubt look very similar to the old one but with just some tweaks to keep the Cabinet Office lawyers happy.

The Justice Bill is going to contain a whole raft of changes and not just to Personal Injury claims. It is going to deal with Legal Aid and sentencing reform so I don’t think it is going to go through parliament (not to mention the House of Lords) without some challenges. No one knows how long the Bill will take to become law but the best guess we have is 6 months. The devil is of course in the detail and we won’t be seeing the draft procedural rules for some time. Even if the Bill can be enacted in 6 months, we still don’t expect the full reforms to be ready until at least October 2012. We shall see…

Now I have already mentioned our dear friends Jaggards and their willing to help the Government with their unbiased data set. Well they are at it again – helping the Ministry of Justice to decide on fixed costs. To be fair, they aren’t actually helping officially but having already had a foot in the door, I wouldn’t bet on them pushing it open a little more. Ready for this – it’s a good one………. they are now saying that fixed costs are too high and so the Jackson reforms, when they come in, will actually mean PI solicitors will be making more money and those poor defendant insurers will be losing even more.

Now I would like to know which abacus they are using and see their methodology. Which planet are they on exactly? Fixed costs are er, fixed and Jackson isn’t going to increase these. The success fee is not going to be recoverable under Jackson so how exactly are PI solicitors going to make more money? If you work for Jaggards and read this blog then please leave a comment explaining this one – I will publish it verbatim.

So there you have it – more smoke wafting over the battlefield. Unbelievable. 

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

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Jun 9

How After the Event Insurance Works & the Importance of Insuring Early

Posted in After The Event Insurance, General, Solicitors

Actually, let’s start with insurance generally.

All insurance companies need to make money (this comes as a surprise to some!). This means that they have to pay out less in claims than they get in in premiums and have enough left over to pay overheads, wages etc. In order to set annual premiums, insurers analyse risk very carefully and set premiums high enough to cover their calculated risk (and a bit on top just in case). If they get it wrong, there is always next year’s premiums which will have to go up to cover any losses from the year before and to cover the increased risk calculation this year.

After the Event Insurers operate in a similar way but with a few differences. First, they need to make money so they calculate premiums based on risk just as a domestic insurer. The problem is, premiums are normally only paid at the end and aren’t paid annually – the end means the end of the case and this can be 3, 4, 5 or more years away. This is a long time for the cash to come in and also a long time before the insurer knows whether or not it is getting it right or not. It is therefore only now, after many years of operating, that ATE Insurers are bedding down their risk profiles. Just when they get it right, things are about to change of course (see Jackson).

The other problem for After the Event Insurers is that the market (in insurance terms) is very small. Domestic insurers may have millions of policy holders whereas ATE insurers are lucky to have 10,000. This means the spread of risk is much lower. Lower risk spread means lower premium income, higher premiums and higher risk.

So you see, ATE Insurers get upset with solicitors who don’t play ball and insure all of their cases from day one. The problem with firms insuring later on is that, by doing this, the ‘easy’ cases which are settling early aren’t being insured. With no premiums coming in from these straight forward claims, the insurer’s spread of risk is further reduced. It is like a tightening net and a bit of a downward spiral. This is because, if a solicitor insures later, the premiums the insurer has to charge to maintain income for virtually the same risk means all premiums have to rise. The solicitor is then faced with higher premiums so is put off insuring early and in fact waits even later – perhaps until proceedings are issued. This means there is even less spread of risk so premiums rise again etc etc. You get the idea.

There is another problem though. Insuring late means that a lot of the claim isn’t going to be covered. Let’s do a comparison with health insurance. If you take this out when you are young, premiums are cheap – perhaps just a few pounds per month. Why? Well, the risk of you being ill when young is very low. If you wait to take it out until you are say 50, premiums are very high because people who are in their 50s tend to have more ailments. Let’s say though that you wait until you are 50 years old to take out a policy. Once on cover you then contact the insurer and say that you incurred some physio charges two years ago due to a bad back. Do you think the insurer will pay up? Of course not. The treatment occurred prior to the inception of the policy. This is exactly the same as an After the Event Insurance policy. If a solicitor takes it out late in a claim, any disbursements incurred prior to the policy start date won’t be covered AND MOST POLICIES WON’T COVER THE DEFENDANT’S ADVERSE COSTS UP UNTIL THIS POINT EITHER. This means, by insuring late, a solicitor has exposed their client to the risk of having to pay pre-policy disbursements, adverse costs and a very high ATE Premium to boot.

So the moral of this tale is, insure everything and insure early.

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

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