Market Round-up

Market round-up: October 2019

4 MINS

Neil Rose, Editor of Legal Futures, October 31, 2019

As Johnny Nash no doubt wrote with the Civil Liability Act reforms in mind, there are more questions than answers. Still…

It may be less than six months until the reforms are due to come into force, but one thing Johnny won’t be able to sing is “I can see clearly now”– the final shape of the new regime remains up in the air.

Following a recent MIB/Ministry of Justice (MoJ) event in Manchester, and our PI Futures conference last month, some have detected a softening of the MoJ’s tone on 6 April 2020 as the ‘go-live’ date. Richard Hutchinson, the official heading the whiplash reform programme, stressed that Justice Minister Lord Keen wants “to get this right and not rush it”. The aim, he said, is April 2020 “until it isn’t”.

If results from testing of the new portal for litigants in person bringing RTA claims of up to £5,000 are not good enough, he added, he will ask the Minister to explain what he meant by not rushing.

The MIB, meanwhile, says it will not sign off a system it does not think is good enough, and will not be afraid to tell the MoJ, if that is the case.

Mr Hutchinson, it should be noted, denies that the language or approach has changed in any way, and claimant lawyers may just be hoping against hope that the MoJ is paving the way for a delay. But when a defendant firm like Keoghs sees “a hint perhaps that the timetable may be slipping”, as it said after the MIB/MoJ event, then maybe it is not just self-delusion.

Asked at PI Futures if there was a risk to the date, Mr Hutchinson replied “yes”. This was no surprise – things can change and “unexpected things occur”. Without referring to an expected general election, he added: “I’ll leave you to think what these might be”. A Labour government, it is fair to assume, will scrap the reforms in their entirety.

At the same time, new Justice Minister, Chris Philp, was arguably the most outspoken Conservative backbench supporters of the reforms, and now he has a say in their introduction. I imagine he’ll be keen to crack on with them.

One of the big problems is that the new rules and pre-action protocol have yet to be signed off by the rule committee and will not likely be published until January, when previously we had been expecting them this month. While it is likely that all the various policy decisions made by the MoJ will be rubber-stamped by the committee, that cannot be guaranteed. Any changes to the assumptions that the MIB and MedCo have been working with – meaning that the system needs to be reworked – could make April 2020 unrealistic.

Other outstanding issues include how alternative dispute resolution in the portal will work, whether the damages tariff laid out previously needs to be updated, and whether the system will really be able to help litigants in person value their claims. The absence of a connection with the existing MoJ portal, if claims have to move between the two, will not be helpful.

Then there are questions about what will happen after April 2020. Detailed management information from the portal will quickly show up unexpected behaviours and they can then be dealt with, Mr Hutchinson said, and he pushed back at the oft-expressed fear that insurers may bulk deny liability – it would not be in their commercial interests to do so as they would have to reserve against such claims, he argued.

“Also, we are going to be looking with the ABI at what changes are going to be needed to the third-party claimant handbook… and to make sure insurers behaviour in how they’re treating third-party claimants is enhanced through this process,” he said. Whether claimants and their lawyers will find that reassuring is another thing altogether, as is what the MoJ will actually do if insurers in particular do not behave as expected.

Further, what will happen to children – though excluded from the higher small claims limit – where they have an injury of less than nine months’ duration, which under the new tariff (from which they are not excluded) will mean damages of less than £1,000 and so caught by the current limit? Will anyone want/be able to act for them? There is no clear answer to this.

But the authorities are listening; such was the disbelief with which people reacted to the news that the MIB’s contact centre – which will assist litigants in person – would have just 11 staff, that Anna Fleming, chief operating officer of the MIB, said they had rethought the plan. She told PI Futures that the MIB would instead “go heavy” on staffing in the early days as it measured the level of demand. Money, she said, was not the issue – the insurers paying for the portal are not questioning the cost.

All this uncertainty is a nightmare for claimant law firms. But it seems like the only prudent move at the moment is to prepare for April 2020 and then be happy if the reforms are delayed. As Johnny Nash might put it, it “Looks like the end of the world” and maybe “I’m moving on”, but it’s better to be ready than have “Tears on my pillow”.

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