Do not speak of your happiness to one less fortunate than yourself.
Further reform has long been promised of the prosecution of low value personal injury claims, although its implementation has been delayed by the various electoral tangles the Conservative party has got itself into, in recent years. The tranche of particular reforms on the near horizon, which will affect solicitors working in the personal injury sector, include the raising of the small claims track limit to £2000 (or £5000 for road traffic accident claims) and a bespoke process for whiplash claims.
The aim and consequences of these reform are expressly to exclude solicitors from undertaking this sort of work, due to the prohibitions on the recovery of costs inter partes, or the impossibility of making a solicitor-own client charge at a meaningful level, due to a small award of damages made under a tariff based scheme.
I wrote an article about these reforms and their ramifications in 2019. It can be found here:
Since the date of that article, the putative reforms have again been postponed and submerged beneath the pandemic which has swept away many projects in the last year. But the reforms have not been forgotten. They are now in sight. A proposed implementation date for them is 6th April 2021. They could have systemic effects on the personal injury sector, as significant as anything that occurred in 2013.
Although the reforms are notionally three months away, there has been no publication of any proposed rules, Practice Directions or meaningful information as to how the reforms will become manifest: the key technological innovation is a bespoke claims Portal for whiplash victims, designed to be navigated by litigants in person, bent on collecting their £200 damages.
I remembering wondering at the time they were first mooted, all those years ago, how genuine were the motives behind the implementation of these reforms. The more cynical part of me, assumed that rather than suffer a political storm, by the outright abolition of the right to claim damages for whiplash, by removing the claims from costs bearing rules and also reducing the damages to a pittance, the government could ensure that people simply would not bother to claim: thus ensuring the de facto disappearance of whiplash, rather than it’s de jure abolition.
Such a move would be cynical indeed, but by no means unprecedented: remember for example the introduction of fees in Employment Tribunals, which had the effect of reducing the “burden” of employment claims on business, by ensuring people could not afford to bring them.
At the tail end of last year, the Civil Justice Council published a report on low value personal injury claims, and the report can be found here: The Civil Justice Council Low Value PI Working Group Report October 2020. I read it with interest over the Christmas break.
The actual terms of reference of the report do not concern the merits of the reforms which are already in the pipeline. Those are assumed to be a “done deal”. Instead they are framed as follows:
2.1 The terms of reference for the Group are: To consider and recommend what further reforms could be introduced for low value (under £25k) personal injury claims, with a view to (i) resolving meritorious claims more quickly and with the costs reduced and (ii) preventing unmeritorious claims.
2.2 The Group agreed that as well as including fraudulent or dishonest claims the term “unmeritorious claims” means those cases where no solicitor, would objectively regard a claim as having any prospects of success.
Instead of proposing further reforms however, much of the report is concerned with considering the consequences of the reforms which are already about to unfold, and in particular those which will be brought into force on 6th April 2021.
It is also fair to say that the Working Group did not speak as one voice: there were significant divisions on a number of topics. What is interesting however, is the consensus of views on some of the key developments, which I will set out below.
On the whiplash reforms the report notes:
As mentioned above, the Group agrees that as claims become more likely to be brought by LiPs, the rules for SCT claims must be written in a form that is clear and intelligible to the lay individual. This is in relation both to what is required to process a claim and how to use the on-line system. These rules should promote the prompt disclosure of all evidence relied upon and streamline and automate the process.
The Group anticipates that the OICP will follow the current portal process as far as possible, as it is acknowledged by the Group that on the whole the process works well. The Group expects there to be a Stage 3 type process similar to the current Portal albeit this would deal with both liability and quantum, with there being an oral hearing as appropriate. The Group expects the documents and key information to be uploaded in the proposed process and to have been captured in a Stage 3 type pack on issue of proceedings.
The Group notes that the OICP will be a standalone process and will not have any capability to transfer information or automatically communicate with the existing Portal. The Group recommends that, in the long term, this is an area that should be given further consideration to ensure that the processes are streamlined and data is automatically transferred between portals.
The Group is concerned that the lack of effective measures to handle credit hire, credit repair and rehabilitation could result in a claimant with a modest claim under one of those headings being forced to bring conventional SCT proceedings for a modest sum (a few hundred pounds), tying up court resources but potentially waiting around 40 weeks for a hearing to take place. It may be extremely difficult for the average LiP to comprehend which parts of his/her claim should be dealt with through the OICP and which parts cannot, and/or which parts of his claim will be handled on his behalf by a third party under an industry agreement. The issue will need careful handling: the separation of the different elements of a claim has the potential to raise issues of res judicata.
In effect, a duplicate (but unconnected) Portal is being built for litigants in person to enter in their whiplash claims: all issues of liability and quantum, will at that stage be in dispute, the claimant may have had the benefit of a hire car, and have a bundle of insured/uninsured losses and will have to navigate the Portal on their own, or at their cost, inputting not only the basis of their claim, but quantifying it and entering in the correct “bits”.
This sounds like either a recipe for disaster, or manna from heaven for that sub-species of litigant in person, who delights in entering folio after folio of text online, after midnight and who when appearing unrepresented at a hearing, is the bane, of the Voice of Common Sense on the District Bench.
The penny has also dropped, that whilst no one buys their hardware and software from different suppliers, if they can help it, the current IT development work has taken place in isolation from the development of the rules that are meant to be replicated within it. To what extent the rules will fit snugly within their IT shell is going to be impossible to say:
The Group is highly concerned that the proposed rules, the Practice Direction and Pre-Action Protocol have not been published and that development and testing of OICP is taking place in isolation.
The realisation has also dawned, that if, contrary to my cynical expectations above, there is a rush of enthusiasm for making whiplash claims utilising the new Portal, or for claims for other injuries worth less than £2000 or £5000, many thousands of claims being run by litigants in person will be pumped into the court system, at a time when it is likely to still be barely afloat from the effects of the Covid 19 pandemic:
The court service cannot be neglected: more District Judges are likely to be required to handle the increased volume of claims. Even where ancillary special damages are initially dealt with outside the OICP, once the case proceeds to an assessment hearing, the court must deal with all damages.
The Group has concerns. At present and for the foreseeable future there is a nationwide shortage of District Judges coupled with a crisis in recruitment and retention. The underlying ethos of the Reform Programme for modernisation of the Courts depends upon “push down” of work from the Court of Appeal to the High Court Bench, through the Circuit Bench and thereafter to the District Bench. Even if additional District Judge resources could be provided (which is highly unlikely) an increase in small claims hearings would impose even greater burdens on this level of the judiciary.
A litigant in person as well as not recovering costs under the reforms, is not subject to paying costs or put at any risk of paying them. Their claims will not be subject to part 36 sanctions and so these litigants in person will have no financial incentive to settle their case as early as possible.
So, a suspicious individual claimant, confronted with an offer from an insurer, may reasonably take the view that they do not know whether it is a good offer or a bad offer, and decide that the obvious solution is to “let the judge decide” as that will be the sole source of professional input they trust, as to what their claim is actually worth. A claim, may more or less, by default go to a hearing. Some faint hopes are expressed in the report that this might be addressed by signposting:
Clarity is needed as to how a LiP will be able to value his/her damages, particularly when the claimant has a combination of tariff and nontariff injuries. The Judicial College Guidelines (JC) are unlikely to be signposted on the portal and even if they are, the average LiP may struggle to interpret them. It is therefore important that clarity is given on the valuation of multiple injuries to ensure that generally injured claimants receive fair compensation.
Moving beyond the whiplash arena, there remains the problem of the claim which is not worth very much, but will still be brought, outside the new Portal, as a small claim. At the moment, there is nothing, not even a few mouldering leaflets in the abandoned county court offices, giving guidance as to how the new breed of litigant in person is to seek access to justice:
A dedicated PAP for all personal injury (PI) claims dealt with under the Small Claims Track (SCT), which is accessible to litigants in person (LiPs), should be developed. This will need to be written in language that is comprehensible to LiPs (for the proposed OICP, the Motor Insurers’ Bureau (MIB) is working to a reading age of 11 years). The vast majority of whiplash claims will be dealt with through a new process due to be implemented in April 2021 (see below). However, with the proposed increase in the SCT limit for employers’ liability (EL) and public liability (PL) claims to £2000 and to £5000 for Road Traffic Accidents (RTA), more cases will fall within the SCT limit.
Producing a guide is not a simple task, for example the CJC guide to bringing and defending a small claim in April 2013 ran to 31 pages and had many links embedded within it to wider rules or forms or other websites on various points.
The report blandly suggests that more specific directions should be imposed, in such cases including for example disclosure. This is an odd suggestion, though and runs counter to the ethos of the Small Claims track. If you can litigate your minor construction dispute over your defective kitchen, without worrying too much about the formalities of evidence, then there seems no logical reason why further layers of cost and complexity, through further procedural obligations, should be imposed on small tripping cases.
Appropriate directions for the management of cases on the revised SCT will be required, as cases previously dealt with on the fast-track, will now fall into that jurisdiction and will require more specific directions than are currently available. For example, claims involving the proof of causation may need directions relating to the obtaining and disclosure of evidence like those needed in liability disputes. In addition to a pre-action protocol (PAP) for the SCT, there will need to be an amendment to Part 27 and the associated practice direction.
Of course, it may be that there will be no flood of litigants in person, crushing the County Court lists with minor PI claims and displacing the District Judge’s current diet of credit hire claims, possession hearings and other juicy morsels.
Instead, it may simply be that claims management companies will occupy a space, hitherto occupied by solicitors. If they can make a business out of low value PPI claims, why should the conduct of PI claims prove to be impracticable? The Report notes:
The Group accepts that it was too early to predict what impact the GDPR and the Data Protection Act 2018 will have on the ability of CMCs to utilise data and to what extent the ICO will investigate/prosecute more cases.
Although since the introduction of greater regulation, there has been a reduction in the number of CMCs, the Group also accepts that CMCs will remain a part of the claims process.
Based on previous experience the Group anticipates that the reforms to the whiplash regime contained within the Civil Liability Act will lead to some CMCs attempting to exploit the market. The introduction of the tariff will reduce general damages for the whiplash element of a motor-related personal injury claim but still provides an opportunity to maximise general damages in the non-whiplash elements and in special damages areas such as credit hire, credit repairs, storage, recovery, rehabilitation, etc. Whilst the OICP is aimed at unrepresented claimants, the MOJ anticipates that more than two thirds of claimants who use that Portal will be represented but that still leaves a significant number of LIPs. Based on MedCo figures this would suggest more than 150,000 claimants will be LiPs. The Group has highlighted above the importance, under a digitised process, of verifying the true identity of the claimant.
The Report also raises the prospect that the reforms may actually permit or create behaviour by actors in the claims sector, which is adverse to the interests of injured claimants:
There is concern amongst the Group that the most vulnerable claimants may be at risk of exploitation in the OICP. The Group welcomes the steps that the FCA have taken so far in respect of regulation of CMCs but detection of the activities referenced above can be difficult and it will require collation and sharing of the OICP data to the various agencies and careful monitoring. The Group is hopeful that the FCA applying stricter and more robust regulation of the CMC sector will lead to higher standards of conduct.
The OICP will see the migration of some low value RTA claims, from solicitor representation, to CMCs. The Group are concerned that this may lead to various types of adverse behaviours, such as unfair, unwarranted or excessive high-cost Damages Based Agreement (DBA); undercover “service charges”, particularly for non-English speakers or those who are not tech ‘savvy’; the emergence of claims ‘hi-jacking’ apps or services, advising clients not to use their own insurer, which is often not in their best interests; and the risk that unrepresented LiPs may be referred to CMCs as a matter of routine by the MRO/medical expert undertaking the medical examination.
For solicitors acting for both claimants and defendants, the reforms were bad news, from the outset, as it means fewer claims requiring the input of a lawyer and fewer claims to be defended, meaning therefore fewer solicitors.
For injured claimants, the reforms are clearly bad news too. How does a claimant benefit from not being able to utilise a lawyer or having their damages reduced?
But from the issues raised in this Report, it appears that if the flood of litigants in person, does emerge it will do so at precisely the wrong time for the beleaguered court service, and that may have resource implications which stretch beyond the personal injury sector and impact many other areas of work.