May 17

Government to Consult on Raising the Small Claims Court Limit

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

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

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

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

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

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

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

Soooo we shall see.

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

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

Trebbles all round!

comments: 0 »
May 10

Unbelievable

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

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

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

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

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

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

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

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

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

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

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

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

So every cloud does have a silver lining.

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

 

comments: 0 »
Apr 27

LASPO Lego

Posted in General, Personal Injury Claims, The Jackson Report

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

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

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

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

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

I was distraught.

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

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

comments: 1 »
Apr 19

Government Overturns Lords Amendments

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

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

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

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

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

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

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

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

Sairha Hussain
Legal Support Advisor
Box Legal Limitied

comments: 1 »
Mar 26

A Narrow Escape for Industrial Disease Victims

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

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

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

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

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

Watch this space….!

comments: 0 »
Feb 8

ABI Gain Direct Access to Top MoJ Civil Servant

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

This is how laws are made these days it seems.

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

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

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

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

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

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

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

I feel a judicial review is approaching.

 

comments: 0 »
Feb 1

Jackson Reforms to be delayed by 6 months

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

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

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

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

More soon….

comments: 1 »
Jan 23

The Future for BTE Insurance

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

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

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

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

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

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

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

Place your bets now please….

comments: 0 »
Jan 12

After The Event Insurance Industry Post Jackson

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

Happy New Year to you all.

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

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

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

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

So bring it on.

 

comments: 0 »
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 »
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 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 »
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 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

comments: 1 »
May 31

Costs Judges Slate Jackson Reforms

Posted in After The Event Insurance, The Jackson Report

I’m not sure why they didn’t come out with this before the Ministry of Justice announced the planned reforms but anyway, at last people are agreeing with what we have been saying all along. The Jackson reforms are a sledgehammer to crack a nut and will result in tonnes of satellite litigation for the courts just at a time when all of the challenges have been dealt with.

Master Campbell, Master Haworth and Master Leonard – all Senior High Court costs Masters – have written a long report analysing the proposed changes. Whilst they agree with some of them, they disagree with most and, it has to be said, they are at the coal face so know the issues more than anyone else. If they don’t like them, the Government has to take notice. If the Ministry of Justice tries to push them through and ride roughshod over these opinions then I can see trouble ahead.

I won’t go into detail here as their comments have been set out nicely here [ http://claimscouncil.org/news/publications ] but as far as After the Event Insurance is concerned, they think it should stay, it should be recoverable from the Defendant but it should be capped to avoid huge premiums being bought last minute by solicitors. Which is is exactly what we said should happen….

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

comments: 0 »
May 17

Is the ABI Starting to Unravel?

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

The Association of British Insurers (ABI) may be starting to unravel…. and all because of the Jackson reforms.

The problem they have is the nature of insurance has changed. It used to be that people paid a premium and then the insurer sat back and hoped that no one made a claim.

Now, with referral fees, claims can be valuable – to some.

DAS has already left the ABI and now Elite (an After the Event Insurer) looks set to follow. Clearly, ATE Insurers are going to suffer when the Jackson reforms come in and so their interests are diametrically opposed to the mainstream insurers who are very keen for the rules to be introduced.

The problem is, referral fees are also going to be looked at – and this will cause further friction within the membership. Some of the mainstream insurers now sell personal injury claims to the highest bidder and so actively go after people who have had accidents. This doesn’t make them popular with insurers who haven’t adopted this approach.

The cracks are appearing which I suspect is good news for the man in the street. The ABI has proved to be a powerful lobby-er whose persuasive powers have swayed the Government to dance to their tune.

Let’s hope the Pied piper is silenced sometime soon.

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

comments: 0 »
May 13

We are going into the film business

Posted in After The Event Insurance, General, Solicitors, The Jackson Report

Of course you knew that already. Obviously, a company full of lawyers selling After the Event Insurance is bound to start making movies – it’s a logical step after all.

Well, the thing is, we are developing a completely new website and will be using short films to get the message across. The problem of course is that we know nothing about making ‘webinars’ etc so instead we are going to hold a competition and get the YouTube generation to come up with some new takes on the corporate video.

The first competition will be starting next week and will run until the end of July. We are offering a total prize fund of £2250 and are looking for a 2 minute stop/go animation explaining what After the Event Insurance is and the effect of the Jackson Report.  So we hope some students out there will be entering with the hope of paying for some of those tuition fees.

I shall publish the rules and rough script next week so watch this er, space. 

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

comments: 2 »
May 10

Referral Fees and Before the Event Insurance

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

Old Ken Clarke was all for Before the Event (BTE) Insurance. No wonder the Government has decided to leave referral fees alone.

Let me explain.

BTE Insurance, as you no doubt are aware, is an annual policy attached to motor or household insurance policies which covers the policy holder (and often their family) in the event of a legal dispute. If for example someone has a policy with their motor insurance, it would have cost them about £25 to £40. For the next 12 months they then have legal assistance and all of their legal fees paid for if they need to make or defend a legal claim.

So, let’s say they have an accident which wasn’t their fault. They contact their BTE insurance provider who places them with a solicitor. The policy holder will be protected against legal costs if they lose and if they win, the solicitor recovers their charges from the defendant. Sound familiar? Well it is exactly what happens with After the Event Insurance save for one significant fact: The BTE insurer will charge the solicitor a referral fee for getting the case.

In other words, the BTE provider sells the case to the solicitor, for up to £750! So instead of the BTE policy actually being a liabilty for the BTE Insurer, it is in fact an asset – they want clients to claim on them as it makes them money. What is more, the BTE provider insists (often with a nod and a wink) that the solicitor doesn’t claim on the policy. You know the sort of thing – if they did claim, it would be the last case they received or similar strong arm tactics.

So the BTE provider is receiving up to £40 for each policy they sell plus £750 for each personal injury claim. Nice.

Let’s compare this to After the Event Insurance bought er, after an accident has happened. Motor ATE Policies typically cost around £350 although the cost to clients post Jackson is likely to be much less, around £150. How many car accidents have you had in the last 10 years? Me – none. The average person – one. So, in 10 years, if you were buying a BTE policy just in case, you would have shelled out around £400.  Instead, if you simply bought an ATE Insurance policy when the accident happened, it would most likely cost just £150 for you to have exactly the same cover.

So BTE isn’t the answer. Not only are BTE Insurers flogging cases to the highest bidder, they are charging clients far too much. After the Event Insurance is much more efficient and cost effective. You only buy it when you need it, not each and every year just in case.

Ken Clarke is wrong. BTE Insurance is not the holy grail but a licence to print money. Tick the ‘No’ to legal insurance box on your motor quote and save a packet.

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

comments: 0 »
May 6

Part 36 offers and ATE Insurance

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

I have been asked to explain how After the Event Insurance works with Part 36 offers, so here goes.

As you will no doubt be aware, a Part 36 offer is an offer to settle made by either party in an attempt to conclude a claim early. They are most often made by defendants and can be in relation to liability or quantum or indeed both.

The rules state that, if a defendant makes a Part 36 offer and the claimant decides not to accept it, if they go to trial and less is awarded by a judge or if later the claimant is forced to accept less than was offered, the claimant has to pay the defendant’s legal costs (and disbursements) incurred from the date the offer was made until the end of the case. What is more, the claimant also has to pay his/her own legal costs (so basically any disbursements if acting under a CFA) from the offer date as well, as these cannot be recovered from the defendant.

So this is where After the Event insurance comes in. You see the problem solicitors have is that they are dammed if they do and dammed if they don’t. If they tell a client to accept an offer, they get hassle from the client who thinks the solicitor isn’t getting them the right settlement and just wants to get their costs. If they tell the client to carry on and then fail to beat the offer, the client says they should have advised them to accept. So you see, ATE Insurance is as much to protect the solicitor here as the client. With our After the Event insurance in place, if a solicitor advises the client to continue, but then the offer isn’t beaten, the insurance will kick in to cover the adverse costs and disbursements. Without it, the client has to pay these out of their damages OR (as is often the case we hear) they create such a stink that the solicitor ends up paying them.

Well at least this is all changing post-Jackson I hear you cry? Not a bit of it. Exactly the same rules will apply. So which is it? Protect your client from costs and yourself from accusations of bad advice or take a punt on each and every case. Bit like driving without a seat belt. Daft.

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

comments: 0 »
Apr 26

After the Event Insurance & Holding Harmless Policies

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

Good break? Very hectic bank holiday for the Morris family so I have come back to work for a rest.

There didn’t seem to be many people going to work this morning though. I read somewhere that over 25% of people would be taking these middle 3 days off in order to end up with an 11 day holiday. Now here at Box Legal, I am in obviously, and so is Jon Gouldsmith and Kirsten Arnold. Which means it must be my colleague Alan Whicker who is off. I wondered why I hadn’t seen him (with apologies to Tommy Cooper).

Enough of the flim flam, let’s talk about something you may not have heard of: ‘Hold Harmless’ ATE Insurance policies.

Strange name, strange concept. Basically, there are unscrupulous After the Event Insurers out there and some greedy (some would also say foolish) solicitors. The solicitors have agreed to take out After the Event Insurance from the insurer but have also agreed never to claim on the policies (they ‘hold’ the insurer ‘harmless’ to claims). How can that be I hear you say? Well, the whole point is that the policy is recoverable at the moment from the defendant. The solicitor agrees to buy the policy for a low sum, say £100 but can then recover £350 or more from the defendant. This gives them a tidy ‘profit’ of £250 per policy and the insurer makes £100. Everyone’s a winner? Well, no. What happens if someone loses? Well the solicitor has agreed to pay out all of the costs from the profit they have made on the policies. Which basically means they are acting as insurers themselves - which is illegal by the way and the SRA aren’t happy either.

Solicitors acting in this way are putting profit before their client’s best interests as they will always be having one eye on the risk of losing. The insurer is basically defrauding the defendant insurance industry as they are issuing a piece of paper and saying it is an insurance policy when in reality it isn’t.

We are aware of a number of insurers and firms who act in this way. The problem is, they are clever and there isn’t anything in writing. It is all done with nods and winks.

So how do you stop them? Well, there’s no need actually. When Jackson comes in, Hold Harmless policies will disappear. Why? Well, the client is going to be paying and will vote with his or her feet if a solicitor tries to sell them an inflated policy. The SRA is looking to come down very hard on firms attempting to make a profit out of ATE insurance at the expense of client’s damages. We believe some may try to continue the con but they will be a dying breed.

Bit like people who actually turn up for work I suppose.

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

comments: 0 »
Apr 19

Disbursement Claims on After the Event Insurance Policies

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

Hello there. I am back.

We had a lovely week in the French Alps. Fantastic weather but only snow quite high up so the children had to go in the cable car every day to ski school whilst the poor old parents sat outside drinking espressos at 3 (where’s my Euros symbol?) a pop. We shall go earlier next year.

I thought I would talk today about disbursements as I think these are not really seen as a risk for clients (everyone focuses on adverse costs) but they are very important.

We have carried out an analysis on claims paid since we set up our scheme some 7 years ago. It may surprise you to know that the average disbursement claim paid out is nearly £1,900! Don’t forget that is the average – if you look at the top 25%, it is over £5,000 per claim and the worst ever was for just over £16,000!

I think it was good old Lord Jackson who suggested that solicitors would be happy to shoulder these expenses and absorb them into the overheads of their business models. This was generous of him – particularly as he has effectively taken away the success fee (clients will shop around for the cheapest one). I don’t think many firms are going to be happy to pay £1,900 per failed case let alone £5,000 or even £16,000!

And it gets worse….

The number of claims are likely to reduce (less money for solicitors = lower ability to pay referrers = less referrer profit = less claims) and we all know what happens with supply and demand on services. If a company is supplying engineer’s assessments and is doing 5,000 of them a year, they can keep their prices low due to high volumes. If instead they are only doing 3,000 a year, they still have to cover their overheads and so, to keep profitable, their prices will have to rise. It’s the old ‘pile it high, sell it cheap’ Woolworths analogy in reverse (and look what happened to them).

So we think disbursements are going to rise – and that’s not all….

Our legal expert, Jon Gouldsmith, pointed out something interesting to me. A lot of our claims involve barristers who have acted on a CFA and so when they lose, they have waived their fee. Well, success fees for barristers won’t be recoverable from the defendant post-Jackson, just like the solicitor’s success fee. It will be a client expense and so we think clients won’t like them and nor will barristers. They will go back to standard fee paying arrangements which means their fees are going to be added to the disbursements which the solicitor has to, er write off (this means pay of course!) in the event of a loss. Our calculations show this will add about 15% to the disbursements liability.

So the bad news is, clients are going to have to be told that they face an average disbursements liability of £2,000 odd and a worse case scenario of, say £18,000 based on our figures. Some solicitors may want to ask for money on account for this.

OR, clients could buy a useful thing called After the Event insurance!

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

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