Market round-up: June 2020
It was in December 2015 that the then Chancellor of the Exchequer, George Osborne, set the ball rolling on whiplash reform and it will now finally reach its conclusion in April 2021. These things do not happen quickly.
The decision to delay the reforms from August to April 2021 due to the coronavirus crisis means that they will happen two years after they were originally scheduled to come into force – if nothing else, the profession cannot say it has not had time to prepare.
I confess to being slightly surprised that the Lord Chancellor Robert Buckland went straight to next April, rather than trying for October or November this year, but he probably wanted to avoid the ignominy of yet another delay. Barring another unforeseen catastrophe – and perhaps depending on just how clogged the courts are as a result of Covid-19 – surely the reforms really will happen next April.
That should give all sides enough time to prepare, despite the strictures of the pandemic, although it will be interesting to see what impact it has had on the market for law firm M&A and WIP sales. There will always be buyers though, as shown by the acquisition last month of McMillan Williams by Taylor Rose TTKW; it had £18m of personal injury and clinical negligence WIP on the books. We also saw Simpson Millar buy the PI books of Yorkshire firm Lupton Fawcett and Manchester trade union firm Rowley Dickinson.
Let us assume (being generous) that the new rules will be published fairly shortly. The question remains whether the Ministry of Justice itself will use the extra time to sort the outstanding issues with the new portal, in particular the absence of the initially promised ADR scheme.
In the meantime, figures from the Personal Injuries Bar Association indicates that the number of hearings halved during lockdown – at the time of writing, we are still awaiting the outcome of the Civil Justice Council’s rapid consultation on how remote hearings have worked. The impression is that the higher courts have had the resources to cope better than the county courts.
It has at least been good to see the various co-operation agreements between claimant and defendant groups to help everyone through the pandemic, although this is not peace in our time. An interesting client briefing from leading defendant firm Kennedys reported that the coronavirus is starting to appear as justification for claims behaviours in road traffic cases.
It said that, as early as February, a claimant said they had been unable to get through to their GP to book an appointment for an assessment due to an increase in calls relating to coronavirus. Another example, from April, was a claimant saying they had been suffering with a headache but not sought medical attention due to Covid-19.
“It is easy to see Covid-19 becoming the ubiquitous excuse of the dishonest, who recognise a new and universally accepted ‘get out of jail free’ card,” Kennedys said. “Why didn’t you see a doctor? Covid. Why was there a delay in responding? Covid. Why did it take so long to repair the vehicle? Covid. What are these extra cleaning charges? Covid.”
The firm also anticipated a new line in coronavirus claims. It identified some newly formed claims management companies (CMCs) with ‘Covid-19’ or ‘coronavirus’ in their names, and said it expected personal injury claims taking various forms as new areas of duty, breach and loss are explored. This may include disease claims against employers and the NHS.
Kennedys said there were early signs of a move into social media advertising targeted at the public in relation to coronavirus-related claims: “We have identified a number of law firms updating their websites to include specific coronavirus compensation sections, focusing on challenging insurers whose policies are not reacting to claims.
“In third-party claims, firms are also advertising in respect of employers’ liability from contracting Covid-19 due to the failure in supplying personal protective equipment, even though there is currently a worldwide shortage.”
The briefing concluded: “We fully expect claims farming to continue its evolution into more types of claims. Covid-19 presents a new frontier for claims and claim behaviours. Following declining claim numbers in areas such as motor, EL and PL personal injury, Covid-19 opens new opportunities for CMCs.”
If this becomes an issue, this time I suspect it will not take the government five years to swing into action.
