As we have discussed in earlier postings on this Blog, for some years now, there has been a tendency for many solicitors undertaking personal injury work, to “streamline their processes” – in other words, to cut corners in order to reduce overheads and maximise profit. These litigation factory operations are nothing less than a menace. If you are unfortunate enough to find yourself a client of such a firm, expect your claim to be dealt with by an inexperienced, and probably unqualified, member of staff, effectively working from a script.
Medical histories go unreviewed and medical reports from inappropriate medical practitioners are obtained through third party medical agencies. Evidence is never challenged, proper legal and tactical advice rarely given and pressure exerted upon unfortunate clients to settle claims at the earliest opportunity, for wholly inadequate sums of compensation. Sadly, this seems to have become the norm.
However, just when it seemed that things could not get any worse, the Government are now legislating on capping solicitors costs in the vast majority of personal injury claims. “Whoopee”, shout the press, nobody is going to shed a tear over reducing the income of fat cat lawyers.
However, the reality of the proposals will mean that in the majority of cases, solicitors costs will be fixed at what is roughly equivalent to 4 hours work for an experienced, specialist personal injury solicitor. Now, let’s take a fairly typical example. Let’s say a client has been injured at work, they are off work altogether for several weeks before returning to work, initially part time and then increasing their hours over the course of several further weeks, back to full time. They have lost earnings and have incurred fees for medical treatment, such as physiotherapy. The employer disputes liability for causing the accident. The solicitor gathers evidence such as witness statements and reviews all of the relevant health and safety documentation obtained from the employer. A site visit may be necessary. Medical records must be reviewed, medical expert(s) instructed and medical reports scrutinised. Questions to (or even a meeting with) the medical expert(s) may be necessary to clarify certain important issues. Court proceedings may have to be drafted and issued and advice given to the client regarding both their prospects of success and the value of their claim. The claim settles before the case goes to trial. The client receives their damages.
Now, that whole process, if undertaken properly, may have involved 30 to 40 hours work by the solicitor. It may be a little more or less than that, but if you think of that as being roughly equivalent to one working week (albeit spread out over several months) of the solicitors time to achieve a settlement, capping their costs at roughly 4 hours, perhaps 10 to 15 percent of the work actually required, says one thing – there is trouble on the horizon. It will become more difficult for clients to find experienced, specialist solicitors willing to undertake the work and instead more people will end up instructing the ununscrupulous litigation factories.
So who will be the winners? The insurance companies cannot believe their luck. Christmas really has come early. A large proportion of claims will be under settled and in addition, they will only have to pay a proportion of the legal costs. But surely there will be a benefit to the public because less being paid out will mean tumbling insurance premiums. Erm…no! When the Government recently went through a similar exercise with low value road traffic accident claims, the insurers promised that premiums would be cut. However, as soon as the reforms came into operation, the insurers announced that in fact premiums would not be reduced after all.
There are still challenges to these new rules in both parliament and the courts. However, as the Government seem totally unprepared to even listen to the concerns raised, the outlook is not one of optimism.