Market Round-up

Market round-up: December 2020

4 minutes

Neil Rose, Editor of Legal Futures, December 08, 2020

I don’t know how many times I’ve written these articles and bemoaned the fact that we are still waiting for the pre-action protocol and practice direction to govern the whiplash reforms, but I can add another one to the list.

Let’s not forget that if they actually happen next April – and, to judge by the comments of David Parkin, deputy director of civil justice at the Ministry of Justice at my recent PI Futures conference, they will be – the reforms will have been delayed by two years. If there was one message that came through loud and clear throughout the week-long event, it was that everyone is desperately waiting for clarity.

The session on the reforms, kindly sponsored by First4Lawyers, heard that there was “still some way to go” before finalising the rules and Mr Parkin, while “hoping” to publish them by the end of the year, did not commit either to that or allowing three months between publication and implementation.

Three months has become the minimum period players in the market need to adjust systems to take account of the changes, but a variety of speakers through the week, including the chair of MedCo, made it clear that even three months would be tight.

We got some fresh detail from Mr Parkin. He said the plan was to lay the draft whiplash injury regulations – detailing the compensation tariff, the uplift a judge can impose and the ban on pre-medical offers – early in the New Year. This will be by affirmative resolution, meaning there will be a debate in Parliament.

The new rules, including raising the small claims limit to £5,000, will be introduced via a negative resolution, meaning it becomes law unless a motion to reject it is passed by the House of Commons within 40 days.

Mr Parkin said the tariff, a draft of which was published in 2018, would be uprated for inflation but predicted the figures would otherwise not change much. He described them as “proportionate and fair” for the types of injuries involved. Claimant lawyers would not agree but what can they do about it? The Motor Accident Solicitors Society has tried appealing to the Lord Chief Justice – who has to be consulted on the tariff – to urge him to call for a review of the figures.

Even if he does, the government is not required to do so, and it would also see Lord Burnett move into political territory he may wish to avoid. It is clear that the figures are ultimately a political judgement rather than based on any more solid calculation.

With no provision for ADR, credit hire or rehabilitation costs, one might legitimately wonder if the portal is worth the candle, but Mr Parkin insisted that it was. He indicated that these elements might be introduced in the future, a timescale that is likely to mean many years, I suspect. Earlier last year, he suggested that the Ministry of Justice’s very long-awaited response to part 2 of the whiplash consultation would be published by the end of 2019. We are still waiting and he will not put a date on it now. It’s all about the April reforms.

Instead of ADR, we are to have a streamlined “bespoke court service” to resolve liability and potentially quantum disputes “quite quickly”. What that will look like, of course nobody yet knows, and the latest figures from HM Courts & Tribunals Service show that small claims have been disproportionally impacted by Covid-19 in terms of timeliness. In July to September 2020, it took an average of 48.8 weeks between a small claim being issued and the claim going to trial, 10.7 weeks longer than the same period in 2019.

One delegate at PI Futures reported that he had just received a date for a stage 3 hearing in February 2022.

The government has decided to hand over to the courts responsibility for how the portal will deal with cases where there are also minor non-whiplash injuries, with Mr Parkin saying the government was willing to support a test case. Cue many more months of uncertainty; I don’t suppose it will be accelerated like the business interruption insurance case has been, which in any event has taken several months to progress too.

He added that the MoJ expected 85-90% of cases to settle within the portal. It anticipates the portal handling around 150,000 cases in the first year before reaching a “steady state” of 400,000 by years three to four.

If there was one glimmer of hope for claimant lawyers, it was that Mr Parkin sounded open to the idea of delaying the increase in the small claims limit for employers’ and public liability claims to £2,000, which is also due to happen in April. Saying that the whiplash reforms were the “priority”, he told delegates: “If people wish to make representations on the timing of that, then please do so.”

We are often told that lawyers thrive in uncertainty. But as this increasingly shambolic reform process proves, that is not always the case.

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