New business models and disability claims

One of the trends of the last 20 years, in the legal profession has been the move to specialisation. Many firms of solicitors now concentrate on a few, or even a single area of work, particularly in the field of personal injury litigation. This brings particular benefits in acquiring expertise, specialised knowledge, a relevant skill set, or economies of scale.

Specialisation comes at a price however. Specialisation necessarily erodes the quality that has been described as “resilience” as all of a firms eggs can be placed in one basket, exposing it to what I would term systemic risk, if market conditions take a turn for the worse. The firm will then suffer, from a lack of flexibility which would permit risk to be spread across a variety of work types, or  work to be drawn from many sources: which would permit a firm to switch easily to another source of work, if one particular work type dries up or becomes unprofitable.

Further, in an extreme scenario, where specialisation is very great and a “Black Swan” event occurs, then this can be catastrophic for a solicitors practice.

Examples in recent years, can easily be found of solicitors who have lost insurance company clients, or fallen off panels, or found trade unions have taken their work elsewhere, which have had very grave (sometimes fatal) ramifications for the firm.

The Black Swan

There are clear indications that the package of reforms, which have loosely been associated with Lord Justice Jackson, represent for some firms a “Black Swan” event.

I say loosely, because it is not just the provisions of LASPO 2012 or reform of the Civil Procedure Rules, which are in play. Instead one sees the shadow of the Black Swan, in the combination of the removal of recoverable success fees, the implementation of lower levels of fees in Portal cases, and the extension of the Portal to PL/EL and even disease claims and the fixing of Fast Track costs.

Looking a little further ahead, one can see looming on the horizon for personal injury litigators, the remorseless expansion of the Portal, stagnant fee levels, the introduction of revised and lower hourly rates, and an upsurge in professional negligence claims arising from breach of rule 3.9, coupled with a surge in disputes over solicitor/own client charges, arising from and generated by clients resenting paying success fees.

The way forward for a firm in this dilemma, is represented by a classic strategy of resilience. It is to seek to diversify and to draw business from a wide variety of sources.

Resilience

It is interesting to see how this is already happening. Over the last 12 months, I have watched the great expansion of firms professing to have expertise in clinical negligence claims. I have noted how firms, who see themselves primarily as “no win, no fee” lawyers, rather than personal injury lawyers, have aggressively marketed their expertise in PPI claims and then into all forms of financial mis-selling. And I am now starting to observe an upsurge in solicitors marketing their expertise in professional negligence claims, targeting solicitors who have mishandled or under settled a client’s personal injury claim.

But these are crowded fields.

Disability discrimination

There are others, which are equally promising, or more so, and one of these is an area I have been developing over the last few years, namely county court tort actions or High Court claims for judicial review, in the field of disability discrimination.

In recent years, I have acted for disabled people suing bus companies, train companies, local authorities, NHS trusts, central government departments and universities. Overwhelmingly the cases have been successful, and most have settled without the need for a court hearing.

All of the cases qualify as Multi-track cases, due to their complexity, the fact they will last for longer than one day, and because a judge needs to sit with assessors.

It surprises me, that so few firms of solicitors, particularly personal injury firms, who act for disabled people on a daily basis, have shown any interest in developing business in this area.

The skill set required, includes a mix of knowledge of the principles of discrimination law, and litigation in the civil courts.

A recent judgment in a case I argued earlier this year, Hamnett.v.Essex County Council [2014] EWHC 246 (Admin) shows the potential scope of this area of work, and how decisions are regularly made, which can have grave impacts on the day to day lives, of disabled people and give rise to worthwhile claims. Yet at the current time, there is a wide disconnect, between the people who have those claims, and the lawyers they need to litigate them.

Funding

Funding of disability discrimination claims to date has largely been on the basis of conditional fee agreements, and ATE insurance: but this has now been thrown into doubt, by the Jackson reforms, which at a stroke have reduced the profitability of the work, by the effective removal of success fees inter partes, and have made it far more difficult to source cost effective ATE insurance.

But the claims remain. And profitability has been reduced, not removed, by the removal of recoverable success fees.

There are other options for funding too, which I suspect will take a greater prominence in the coming years.

Some of these cases, where a disabled person has developed depression or an anxiety disorder, are in fact personal injury cases, and qualify for Qualified One Way Costs Shifting.

They are precisely the sort of case, where trade unions, who have commonly supported discrimination cases and personal injury claims, for many years, could usefully provide a further source of support for members and their families.

And should BTE insurance become more widespread, or wider at least in its scope, it could prove a useful resource for disabled people, to fund their litigation costs.

In this country, it is suggested that there are 7 million people, who qualify for the protection of the Equality Act 2010, on the basis of their disability. That is an awful lot of potential clients, with an awful lot of potential claims.

Andrew Hogan has acted in numerous disability discrimination claims in both the county court and the High Court for many years. His website can be found at www.disabilitybarrister.co.uk

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  1. Pingback: Disabled people need to create the Disability Litigation Market Services they need | thinkablesite's Blog

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