February 2019 blog for Claims Magazine
Was part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) worth the bother?
I can guess the reply of most claimant lawyers – and indeed of defendant lawyers – but now the Ministry of Justice (MoJ) has had its say, publishing the long-awaited post-implementation review in January.
It was understandably overshadowed by the review into the drastic impact of part 1 of the Act on legal aid, in part because the MoJ concluded that part 2 “on balance” succeeded in reducing the cost of litigation, discouraging unmeritorious cases and promoting access to justice at proportionate cost.
As a result, the MoJ is not proposing any amendments to the primary legislation, or immediate changes to the underlying rules and regulations, although it identified reform of the damages-based agreement regime and extending qualified one-way costs shifting beyond personal injury (PI) as the areas top of the list to address in the future (with the former sounding more likely than the latter).
The review included a data analysis from Professors Fenn and Rickman – whose work has underpinned much of the civil justice reform of the past 15 years – and this indicated lower base costs and damages, and reductions in the length of proceedings, in PI and clinical negligence cases following LASPO.
The MoJ said: “Based on the evidence received as part of the PIR, the government considers the part 2 reforms to have been successful in achieving the principal aim of reducing the costs of civil litigation.
“The evidence shows that, in a range of personal injury claims (including clinical negligence claims), costs have reduced significantly (c. 8-10%) and early settlement has also improved [by 9%].
“A definitive judgement on the impact on unmeritorious claims cannot be made at this time but the claims volumes data, the changes in financial incentives to CFAs, the test of fundamental dishonesty for QOCS and anecdotal stakeholder feedback suggest there has been an overall decline in unmeritorious claims.
“The government considers that, on balance, the evidence suggests the part 2 reforms have successfully met their objectives.”
Not the most ringing of endorsements, it has to be said, and the review acknowledged the concerns of claimant lawyers that the Act has made it more difficult and challenging to bring some claims. But it did not detail the imbalance many claimant lawyers now see between their clients and defendant insurers.
The Fenn and Rickman research also needs probing some more. Not for the first time, they had some trouble getting hold of data, and they had to discard cases subject to fixed recoverable costs from what they did have.
They were left with just two data sources: one from NHS Resolution and its costs firm of choice Acumension, and another covering non-clinical negligence PI claims over £25,000 provided by Peterborough-based law firm Taylor Rose TTKW, which acts for insurers and other compensators.
Reading between the lines, it appears that the professors were quite tentative in their conclusions – “They urge that evaluations of future aspects of reform in this area would be assisted by better collection of baseline data,” the review noted.
And even if the figures are accurate, is a reduction in costs of no more than 10% what the MoJ was really after? While 10% across the piece (of non-fixed-costs cases) no doubt adds up to a significant sum, have we seen it reflected in lower insurance premiums? Does it make up for the prejudice suffered by vulnerable people such as children and protected parties, as well as the cost of change across the industry?
The impact of the Civil Liability Act on claimants is likely to be much more severe. The cost of litigation will no doubt fall further. But at what cost to justice?
