Market round up: December 2022
It’s been a busy time since the last newsletter. Having had the excitement of the Court of Appeal’s blockbuster rulings in Belsner and Karatycz, we are now anticipating its guidance on dealing with mixed claims in the Official Injury Claim (OIC) portal, after a hearing at the end of November in which both the Association of Personal Injury Lawyers and Motor Accident Solicitors Society intervened.
We are still waiting to see the true impact of Belsner. A good result on the face of it for claimant solicitors, it meant they also needed to check the terms of their retainers, while classifying cases that settle in the Claims Portal as non-contentious costs just provides a different basis for challenging them. Perhaps the greatest unknown, though, is what Checkmylegalfees does now. Heavily criticised by the Master of the Rolls, it came out with a very combative statement in the wake of the judgment and no less an authority than Dr Mark Friston, eponymous author of the renowned textbook Friston on Costs, reckons there are plenty of other targets for its work.
The Court of Appeal ruling also adds yet another voice to calls for reform of the costs assessment regime contained in the Solicitors Act 1974. It joins the Law Society, Association of Costs Lawyers and Senior Costs Judge, but whether the government is interested is another thing altogether. Given the need for statutory change, that is vital. And as shown by the latest delay to the extension of fixed recoverable costs to October 2023, the Ministry of Justice (MoJ) struggles to do one thing at a time when it comes to costs, let alone more. But it seems absurd that so much time is spent initially debating whether a bill actually is a bill, or what kind of bill (statute, final, interim etc) it is. Even costs professionals are fed up with it.
Meanwhile, we may by Christmas see the interim findings of the Civil Justice Council’s costs review (although it did reopen in November just for submissions on the impact of Belsner). If I had to put money on one thing, it would be that costs budgeting will remain but will be significantly changed – separating directions from budgeting, so that the latter can take account of the former, was one reform I saw in several of the responses to the consultation.
In November, the MoJ issued a review of the first year of the OIC that, erm, wasn’t a review. Rather, it was an analysis of the portal’s operational performance and not an evaluation of the reforms (which it only has to conduct by 2024 – and the MoJ also recently ruled out an early review of the tariff too). It didn’t stop the MoJ passing comment, however, and what I found most striking was how officials are moving the goalposts once more for how to assess success.
I’ve written before how the justification for the whiplash reforms has morphed over the years from combatting fraud to reducing the number of claims to an “acceptable” level, whatever that may be. Now the MoJ has to find a way to explain away why fewer than 10% of OIC users are confident enough to go it alone without a lawyer, given that this was its major selling point.
“This is not on its own an indicator of how well the service has worked, how easy it is to navigate or how the market has adapted,” the analysis sniffed. “What is important is that claimants have been provided with options as to how to achieve a proportionate outcome, regardless of the choice they make.”
The figure of 9% of unrepresented claimants showed there was “demand for the greater choice” that the OIC provided. Really? On launch, the MoJ said “it is anticipated that the majority of road traffic accident claims will use the portal in future”. It didn’t say how far into the future that may happen, of course, but ‘generations’ was probably not what it had in mind.
Do be aware too of the recent news that a large number of claim forms prepared by personal injury solicitors in claims exiting the OIC portal are being returned because of errors.
The last few months have seen more consolidation in the market, such as Express Solicitors acquiring Michael W Halsall, which has been in run-off because of the whiplash reforms. First4Lawyers’ own research found that one in four law firms impacted by the whiplash reforms have already exited that market, with more set to follow, while IRN Legal Services said there has been a “significant” drop in the number of high street law firms offering PI services, while the largest 25 PI law firms take a combined market share of around 30%. This makes PI “the most heavily concentrated sector in consumer law”.
Finally, you often hear defendant insurers explain how their data shows which claimant firms are the ones they should keep a particularly close eye on for dubious claims. But this has come out in the open, with the High Court rejecting a claimant firm’s objection to witness statements from the opposing solicitors about its claims record.
The statements from the head of organised fraud at DWF analysed 372 claims submitted by the firm and said 95% contained an allegation of psychological injuries, 67% of claimants were recommended for further psychological examination, and 68% of claimants served a psychological or psychiatric report. Further, all 207 reports provided by a particular doctor diagnosed a recognised psychiatric condition, with two-thirds of them estimating a recovery period of two years or longer.
The second statement said that the data, on its face, “strongly indicates that all of the claims have been cynically managed so as to contrive an outcome whereby in every case, and irrespective of the true circumstances of that case, the claimant is presenting a claim that they have suffered psychiatric harm as a result of the relevant index event”. It will be very interesting to see how this plays out.
