November has been a relatively quiet month in the sense that there have been no dramatic headlines. This week's Autumn Budget brought relief to insurers who were spared a further IPT rise and although the long awaited post-legislative review of LASPO has been announced it would appear that the Jackson funding provisions contained in Part 2 of LASPO will be reviewed separately. One of the bigger headlines came at the end of the month with the news that the Scottish Government has agreed that the regulation of CMCs by the FCA should be extended to Scotland and this is being brought forward as an amendment to the Financial Guidance and Claims Bill.
The next anticipated development is the Justice Committee's report on the proposed discount rate legislation which is due by the end of the month, although we already have an indication from MoJ civil servants that the rate is unlikely to be reviewed under the new provisions until late 2018/early 2019.
We look at these developments below along with our usual round up of forthcoming cases and issues on the horizon.
Personal injury: cross border claims. The appeal in Mapfre Mutualidad Compania De Seguros Y Reaseguros SA & Anor v Keefe on whether a Spanish insured can be joined into the English proceedings already brought against the Spanish insurer, was heard on 7 March 2017.
Police: human rights. In Commissioner of Police of the Metropolis v DSD & Anor, concerning the "black cab rapist" John Worboys, the Court of Appeal upheld a first instance decision that the failure of the Met Police to carry out effective investigations into the victims' complaints amounted to inhuman or degrading treatment contrary to Article 3 of the ECHR. The Met Police are appealing and the hearing took place on 14 March 2017.
Accidents abroad: jurisdiction. The hearing of the appeal in Four Seasons Holidays Inc v Brownlie took place in May with a further hearing on 20 July. The issue is whether the Court of Appeal erred in holding that the tort jurisdictional gateway test under the CPR, which requires that "damage" be sustained within the jurisdiction, is not satisfied by indirect or consequential damage. Judgment is awaited.
Police: duty of care. The issue in Robinson v Chief Constable of West Yorkshire Police is whether the police should be liable in negligence following an incident in which the claimant was injured when she became caught up in the arrest of a drug dealer. The matter was heard on 12 July 2017.
Update - Professional negligence: surveyors. The question in Tiuta International Ltd v De Villiers Surveyors Ltd is how the 'but for' test for causation is to be applied as between an allegedly negligent valuer and lender in a re-financing situation. The appeal took place on 6 November 2017 and judgment is due to be handed down on 29 November 2017.
Professional negligence: solicitors. The issues in the Scottish case of Steel v NRAM PLC are whether the majority of the Extra Division correctly interpreted and applied the law relative to the existence of a duty of care or whether the majority have developed a new test; and whether the majority of the Extra Division exceeded the scope of their appellate jurisdiction. The appeal was heard on 7 November 2017.
Procedure: service of claim form. The issues in Barton v Wright Hassall LLP are whether the Court of Appeal erred in upholding the judgment of the courts below that there was no good reason to validate service under 6.15 of the Civil Procedure Rules; whether the Court of Appeal’s reasoning breached the appellant's Article 6 and Article 13 rights under the European Convention on Human Rights; and whether the costs awarded by the Court of Appeal to the respondent were disproportionate to the work undertaken. The appeal was heard on 22 November 2017.
Occupational disease: actionable injury. The issues in Dryden & Ors v Johnson Matthey PLC are whether the appellants have suffered actionable damage in the form of losses flowing from the physiological changes to their bodies caused by the respondent’s negligence; if not, whether the respondent is liable for the losses by reason of a breach of an implied term in the employment contract to keep the appellants safe at work; and/or whether the respondents owed a duty of care to hold the appellants harmless from the purely economic losses sustained. The hearing will take place on 27 & 28 November 2017.
Directors' breach of duty: limitation. In Burnden Holdings (UK) Ltd v Fielding & Anor the issues concern the proper construction of s.21(1)(b) Limitation Act 1980. Is a wrongdoing trustee’s direct or indirect control of a company which receives trust property sufficient to engage that section, even though it requires the trust property or its proceeds to be in the possession of the trustee, or previously received by the trustee and converted to the trustee’s use? And also the meaning of "unlikely to be discovered for some time" in S.32(2) Limitation Act 1980. The hearing will take place on 7 December 2017.
Supreme Court cases awaiting developments. We await further official details for a number of cases where permission to appeal has been granted:
Gavin Edmondson v Haven Insurance which concerns an insurer engaging directly with claimants to conclude their claims which had been commenced in the Portal. We understand the appeal will take place on 5/6 February 2018.
Banca Nazionale del Lavoro SPA v Playboy Club London Ltd & Ors concerns a financial reference given by a bank to an agent acting for a club which ran a casino and whether a duty of care was owed to the club.
The issue in James-Bowen v Commissioner of Police for the Metropolis is whether the police failed in their duty to protect officers' interests when settling an assault claim.
Permission to appeal has been granted in Darnley v Croydon Health Services NHS Trust. The issue in the Court of Appeal was whether an A&E receptionist owed any tortious duty to provide accurate information to the claimant about waiting times.
Court of Appeal
Costs: assignment of CFA. The case of Budana v Leeds Teaching Hospitals NHS Trust on the validity of assigning a CFA was leapfrogged to the Court of Appeal and was heard on 5 July 2017. Judgment is awaited.
Update - Costs: proportionality. An appeal from the decision of Senior Costs Judge Master Gordon-Saker in June 2016 in BNM v MGN Ltd about the ‘new’ test on proportionality was leapfrogged to the Court of Appeal. In a judgment handed down earlier this month it was held that the old proportionality test applies to pre April 2013 recoverable additional liabilities. Judgment in the appeals in Reynolds v Nottingham University Hospitals Foundation Trust and McMenemy v Peterborough & Stamford Hospitals NHS Foundation Trust, which were heard in October, are due to be handed down on 28 November.
Update - Local authority mental health provision: personal injury awards. The question in Tinsley v Manchester City Council was whether a local authority could refuse to provide after-care services to the claimant following compulsory detention in hospital under s.117 Mental Health Act 1983, on the basis that the claimant was in receipt of a personal injury award. At the previous hearing the court held that the personal injury award was to be disregarded. That finding was upheld in a judgment handed down on 1 November.
Bereavement award: cohabitees. In Smith v Lancashire Teaching Hospitals NHS Trust & Ors the claimant had been cohabiting with her partner for over two years when he died as a result of the defendants' negligence. The case involves a challenge using the ECHR to the present position under the Fatal Accidents Act 1976 that cohabitees are not entitled to a bereavement award. The challenge failed at first instance but in his judgment, Edis J invited parliament to reconsider the law in this area. The appeal took place on 7 November 2017.
Costs of provisional assessment: Part 36 offers. An appeal will take place in the case of Lowin v Portsmouth & Co Ltd on 5 December 2017. At the previous hearing (an appeal) it was held that Part 36 trumped the provisions for a £1500 cap on the costs of provisional assessment and the claimant was entitled to indemnity costs. Read more on the case in the Gazette.
Mesothelioma: breach of duty. In Bussey v Anglia Heating Ltd a widow's claim for damages, following the death of her husband from mesothelioma, failed as she could not prove breach of duty. The judge made it clear that the CA authority of Williams v University of Birmingham (2011) is binding unless and until the Court of Appeal or Supreme Court decide otherwise. The appeal is listed for 23 January 2018.
New – Vicarious liability: connection with employment. Permission to appeal has been granted in the case of Bellman v Northampton Recruitment Ltd where at first instance it was held that an employer was not vicariously liable for an assault committed by its director after a work Christmas party. 12 KBW outline the grounds on which permission to appeal has been granted and you can read more on the first instance decision in our update from last year. The appeal has been given a hear-by date of 18 April 2018
Update - MIB agreements: judicial review. The judicial review by road victims' charity RoadPeace in relation to the MIB agreements was heard in January and judgment in R (on the application of RoadPeace) v Secretary of State for Transport & the MIB was handed down earlier this month. Most of the challenges about the compatibility of domestic legislation with EU law were unsuccessful although the judgment did confirm that amendments to domestic legislation are required to comply with Vnuk.
Costs budgeting: detailed assessment. We understand that permission to appeal has been granted in the case of RNB v London Borough of Newham where it was held that a reduction in the hourly rate in relation to incurred costs was seen as a "good reason" to depart from an approved budget on detailed assessment. A hearing date is awaited. Read more in Litigation Futures which also reports on a case where District Judge Lumb came to a different decision on the issue.
Update - Discount rate consultation. Following an announcement to the London Stock Exchange on the morning of 7 September the MoJ published its response to the discount rate consultation along with draft legislation proposing that:
o the rate will be set by reference to "low risk" rather than "very low risk" investments as at present
o the rate should be reviewed at least every three years
o the Lord Chancellor will consult a panel of experts when setting the rate
The Lord Chancellor then invited the Justice Select Committee to undertake a pre-legislative scrutiny inquiry into the draft legislation by the end of November. An oral evidence session took place on 1 November in which Lord Keen indicated that the legislation would come into force in early 2018 with the first review taking place as soon as possible thereafter. However civil servants quickly backtracked commenting that the first review is unlikely to happen before the end of 2018/start of 2019. The Justice Committee's report is due by the end of November and the MoJ has committed to respond within 2 months.
Update - Claims Management Regulation: fees cap. In February 2016 the MoJ published a consultation on proposals to cap the level of fees that regulated CMCs can charge consumers. It was proposed that the cap should apply only to the financial products and services claims sector. However, it did invite views on whether fee controls in the personal injury sector should be considered as well. The consultation closed on 11 April 2016 and in the intervening period the new Financial Guidance and Claims Bill included provision for a new power allowing the Financial Conduct Authority to cap fees. This month, the Claims Management Regulator has responded to the consultation, announcing its intention to
o Ban upfront fees in relation to PPI and other financial claims
o Ban any charges to a consumer where it is identified that the consumer does not have a relationship or relevant policy with the lender
o Require CMCs to ensure that all cancellation charges are reasonable and to provide consumers with an itemised bill setting out details of what the cancellation charges relate to.
The CMR has also this week (23 November) issued an information bulletin covering both the consultation response and recent developments in relation to the Bill.
Update - Driverless technology: House of Lords inquiry. Soon after the Department for Transport consultation on driverless technology closed, the House of Lords Science and Technology Committee launched an inquiry into the future uses of driverless vehicles in the UK. The Committee published its report in March highlighting that this is a fast-moving area of technology and that there is a lot for Government to do. There needs to be central co-ordination of strategy across the various sectors that could benefit from Connected and Autonomous Vehicles (CAV) and not just a focus on private road vehicles. There also needs to be further research and sharing of expertise and knowledge. This month the government has published its response (pdf) to the Committee's report and the Inquiry homepage now indicates that a debate is awaited. In the meantime the new Automated and Electric Vehicles Bill has this month continued its progress through the House of Commons.
New – Civil procedure: disclosure. A Judiciary press release published on 2 November 2017 details proposals for a mandatory disclosure pilot scheme to run for two years in the Business and Property Courts. A Disclosure Working Group was set up in May 2016 to look into widespread concerns about the excessive cost, scale and complexity of disclosure up to with a view to achieving a wholesale cultural change in the disclosure process. "The unanimous view of the Working Group is that a wholesale cultural change is required and that this can only be achieved by the widespread promulgation of a completely new rule and guidelines on disclosure which will apply for the majority of cases proceeding in the Business and Property Courts." Feedback is sought by 28 February 2018. Read more in Litigation Futures.
The following consultations are awaiting official responses:
Reforming the soft tissue injury (whiplash) claims process - Part 2. In February the government published the first part of its response to the Reforming the soft tissue injury (whiplash) claims process consultation. It then incorporated its proposed reforms to the whiplash claims process within the Prisons and Courts Bill which we reviewed in our update earlier this year. Although the Bill's progress ended with the dissolution of parliament we now know that the whiplash provisions will be reintroduced within the Civil Liability Bill announced in the Queen's Speech. In the meantime a second part to the consultation response is still awaited and is due to look at the outstanding proposals considered, including, the Insurance Fraud Taskforce recommendations, credit hire and rehabilitation. In July, Justice Minister Sam Gyimah gave a familiar response to the question of when a response would be published…"in due course".
Update - Review of Fixed Recoverable Costs. Jackson LJ published his Review of Fixed Recoverable Costs on 31 July. His proposals are to extend fixed costs only in claims worth up to £100,000 along with the remaining fast track cases not yet subject to FRCs. The report is now being considered by the senior judiciary and the MoJ, and a consultation will follow in due course. In September the Gazette reported on doubts that the reforms would be implemented by October 2018. Last month Jackson LJ spoke at two events but was unable to say what the government's response would be. He did though hope the MoJ would set out their plans soon. Read more in Simon Denyer's update this month Latest statements from the Ministry of Justice suggest maintenance of commitments to whiplash and discount rate reform, while action on extension of fixed costs also looks likely
Fixed recoverable costs for clinical negligence claims. The consultation on fixed recoverable costs in clinical negligence claims was published on 30 January 2017. It sought views on proposals to introduce fixed costs for claims valued between £1,000 and £25,000 and to streamline the claims handling process. In his recent report Jackson LJ acknowledged the difficulties in fixing costs in clinical negligence claims and recommended that the Department of Health and the Civil Justice Council set up a working party with both claimant and defendant representatives to develop a bespoke process for handling clinical negligence claims up to £25,000 accompanied by a grid of fixed recoverable costs. Last month MoJ permanent secretary Richard Heaton appeared before the Public Accounts Committee for its Cost of Clinical Negligence in Trusts Inquiry where he confirmed that the government has accepted Jackson LJ's recommendation. Also last month, in a move designed to help protect GPs from the costs of clinical negligence claims, the Department of Health announced plans for a state backed insurance scheme. Read more in the press release.
Review of low value personal injury claims including package holiday claims. On 13 October the MoJ published a call for evidence following their announcement in July of measures to tackle the apparent increase in package holiday sickness claims. The MoJ has already asked the Civil Procedure Rules Committee to consider how these claims can be incorporated within the EL/PL portal protocol so that they fall within the existing fixed recoverable costs regime - they are looking to extend FRC to these claims by April 2018. The MoJ has also asked the Civil Justice Council to consider the rules on how low value claims are handled more generally to try and address the incentives behind the bringing of unmeritorious claims. On the issue of holiday sickness claims, the call for evidence invites views on proposed amendments to the EL/PL portal protocol and data on volumes of such claims. On the wider issue of low value personal injury claims generally, including whiplash, NIHL and gastric illness claims, the MoJ invites views on any issues that should form part of this project, suggesting for example, the nature and timing of evidence, along with any other issues considered relevant. The consultation closed on 10 November and a response is awaited.
Credit hire: model directions. In June, the Civil Procedure Rule Committee issued a consultation on the "model order for directions to be used in credit hire cases". Acknowledging that the whole area of credit hire "remains a highly contentious area of litigation" the CPRC identified what they see as relatively simple steps that can be taken to narrow the issues and present the judge with the necessary evidence to make a determination. The proposed directions concern witness evidence and disclosure on impecuniosity and the agreement of hire rates. Stakeholders were urged to confer to try to achieve a consensus or risk a solution being imposed. The consultation closed on 1 August 2017.
Motor insurance: implications of ECJ Vnuk ruling for UK legislation. In December the Department for Transport published its consultation Motor Insurance: consideration of the 'Vnuk judgment' to look at “options for amending domestic motor insurance law in light of the European Court of Justice ruling…” The government is considering two options: one broadening the scope of insurance requirements to reflect the decision in Vnuk; the other would involve amending the Motor Insurance Directive. The consultation closed on 13 April 2017 and the government's response is awaited, but in the summer the Department for Transport published a summary of responses noting that the proposal to limit compulsory motor insurance to vehicles used ‘in traffic’ proved the most popular. In the meantime the European Commission requested feedback on the issue, and responses were published on the consultation homepage. That exercise formed part of a wider evaluation of the Motor Insurance Directive known as a REFIT evaluation on which the Commission recently held a wider consultation which closed on 20 October 2017. Responses have been published on the consultation home page but you can read the joint ABI and IFB response here (pdf). Also last month the Department for Transport responded to a written question confirming "The Department’s priority for the REFIT review is the correction of the scope of the Directive following the Vnuk judgment, such that it only applies to motor vehicles used in traffic. We collaborated with like-minded Member States to write a letter to the Commissioner putting forward this view."
Legal services regulation: removing barriers to competition. In July 2016 the MoJ announced a consultation on proposals to reduce barriers to market entry, and regulatory burdens on Alternative Business Structures in legal services. Lord Faulks’ ministerial statement also mentioned the Government’s intention to consider a further consultation on regulatory independence. The current consultation closed on 3 August 2016.
This month has seen the Financial Guidance and Claims Bill, Data Protection Bill, and Automated and Electric Vehicles Bill continue their passage through parliament although there is still no sign of the Civil Liability Bill or Courts Bill.
Whiplash reform: Civil Liability Bill. The aim of this Bill is "to crack down on fraudulent whiplash claims" with a view to reducing motor insurance premiums by about £35 per year. The briefing notes to the Queen's Speech say the Bill will "ban offers to settle claims without the support of medical evidence and introduce a new fixed tariff of compensation for whiplash injuries with a duration of up to 2 years." It is therefore expected that the new Bill will broadly mirror the whiplash provisions of Part 5 of the Prisons and Courts Bill, and perhaps this time there will be an opportunity for improvement around the definition of claims falling into the new process. Last month, Chair of the Justice Committee Bob Neill indicated at a Conservative Party Conference fringe event that the Committee will resume its inquiry into the whiplash provisions and the proposed increase in the small claims track. And during an evidence session with the Justice Committee on the work of the MoJ (also last month), Lord Chancellor David Lidington confirmed the government's intention remains to increase the small claims track limit and also that the Civil Liability Bill would be brought forward when parliamentary time was available, but that Brexit legislation was the priority. Read more in Simon Denyer's update from earlier this month.
Online court: Courts Bill. This Bill will "reform the courts system in England and Wales to ensure it is more efficient and accessible, and in doing so utilise more modern technology". Presumably, although it has not yet been confirmed, this Bill will pick up from Part 2 of the Prisons and Courts Bill which included provision for the legal foundations for the introduction of new online procedures and online dispute resolution (ODR), and for the creation of a new online court that could deal with low value money claims below £25,000, as recommended by Lord Justice Briggs’ Civil Courts Structure Review.
Update - Driverless technology: Automated and Electric Vehicles Bill. This Bill was introduced to the House of Commons on 18 October. Part 1 of the Bill deals with the insurance of automated vehicles and Part 2 makes provision in relation to charging of electric vehicles. Having passed its second reading on 23 October, it has now been considered in a Public Bill Committee and was reported without amendment. It will now be considered at the Report stage on a date to be announced. In the meantime, in this week's Autumn Budget Chancellor Philip Hammond confirmed that the government wants to see fully self-driving cars on UK roads by 2021.You can follow the progress of the Bill here and a Commons Briefing Note has been published on it. Last month, Caroline Coates reviewed the new Bill in this article.
Update - Claims management regulation: Financial Guidance and Claims Bill. The provisions in the Bill relating to claims handling are those which came out of the 2016 Carol Brady review and the consultation on capping fees. Last month we reported on an unexpected U-turn on the issue of a ban on CMC cold calling. Since then, the Bill completed its passage through the House of Lords and has had its first reading in the Commons. The headline in the latter stages of the Lords was the news that the Scottish Government has agreed that the regulation of CMCs should be extended to Scotland. Read more in our recent alert and you can follow progress of the Bill here.
Update - Data Protection Bill. Having been introduced in the House of Lords on 13 September the Bill has now completed the Committee Stage and the Report Stage is due to start on 11 December. It will eventually replace the Data Protection Act 1998 as the primary data protection law within the UK. The Bill widens the reach of GDPR which as a Regulation is already directly applicable in the UK. The Bill also sets out the derogations that will apply in the UK and therefore should provide clarification as to how some of GDPR's provisions might be navigated by insurers. At 218 pages including 18 schedules the Bill is by no means straightforward and may yet be subject to further change as it proceeds through parliament. You can follow the Bill's progress here and the government has produced a number of overview notes here. A House of Lords briefing was also produced last month in advance of the Bill's second reading.
The following Law Commission draft Bills are also awaiting further developments:
Update - Deprivation of liberty: Mental Capacity (Amendment) Bill. In 2014 the Law Commission began a review of the Deprivation of Liberty Safeguards (DoLS) under the Mental Capacity Act. The DoLS aim to protect people who lack mental capacity, but who need to be deprived of liberty so they can be given care and treatment in a hospital or care home. If a person’s right to liberty needs to be infringed in other settings, an authorisation must be obtained from the Court of Protection. The DoLS have been criticised for being overly complex and excessively bureaucratic, placing increasing burdens on local authorities. In 2015 the Law Commission held a consultation and in 2016 published an interim statement. On 13 March 2017 the Law Commission published its final report along with a draft Bill. It recommends that the DoLS be repealed with pressing urgency and sets out a replacement scheme called the Liberty Protection Safeguards. In addition the draft Bill makes wider reforms to the Mental Capacity Act which ensure greater safeguards for persons before they are deprived of their liberty. Last month we noted the publication of a House of Commons briefing note was published outlining the Law Commission's recommendations. Then on 30 October the government published an interim response welcoming the report and confirming that a final response would be produced by Spring 2018.
Update - Insurance contract law reform: draft Insurable Interest Bill. In April 2016 the Law Commission and the Scottish Law Commission published a draft Bill following their review of the issue of Insurable Interest, having previously made proposals for reform in 2008 and 2011. They were asked to return to the issue due to the increased numbers of requests to write policies which include cover for children, cohabitants and to insure ‘key employees’ for substantial amounts. The draft Bill is intended to reflect the proposals set out in the issues paper and the Law Commissions invited comments on the draft Bill by 20 May 2016 with a view to publishing a final draft Bill and report in autumn 2016 but there have been no further developments to date. The project webpage now notes that the project is on hold due to other priorities within the team but they aim to publish a revised draft of the bill in due course.
Also on the horizon...
Update - Insurance Fraud Taskforce. The IFT published its final report in January 2016 and in a written ministerial statement in May 2016 the Government welcomed the report and accepted the recommendations in relation to low value personal injury claims. Since then the IFT has met to consider progress to date and the further work required. In the November 2016 whiplash consultation the Government took the opportunity to obtain views on the implementation of certain of the IFT's recommendations. These included a recommendation to amend the QOCS rules where a claimant discontinues less than 28 days before the start of a trial. As mentioned above, part two of the consultation response is due to cover the question of implementing the recommendations from the IFT. In the meantime, in August the IFT published a report (completed in February) outlining the progress made during 2016 on the original recommendations. Both the IFB and the MIB published their support for the report with the latter adding further updates on the current position of projects outlined in the report. Last month, following an IFT recommendation the Claims and Underwriting Exchange (CUE) was expanded to accept data relating to travel insurance claims. This month there is news from the IFB that an industry working group, tasked with developing a communications strategy to combat insurance fraud, has appointed behavioural experts to carry out experimental research into the impact different approaches could have on fraud levels.
Update - MedCo. Following the MoJ’s announcement last October of the revised Qualifying Criteria for MROs, effective from 8 November 2016, MedCo suspended 134 shell companies for failing to comply with the new Qualifying Criteria. This change, together with the change to the search criteria were introduced to tackle the gaming of the MedCo system (read more in this update). MedCo has since reported on a range of enforcement action: at the end of May it suspended 23 MROs and 14 Direct Medical Experts for failing to upload medical case data to the MedCo system; on 6 June it reported the suspension of a further 21 "shell" companies for failing to meet the Revised Qualifying Criteria; and a week later announced that it had removed Tier 1 status from four MROs, reclassifying them as Tier 2 and had suspended a further two Tier 1 MROs. In August MedCo warned against "inappropriate behaviour" during the audit process and last month MedCo published an FAQ document (pdf) to address common issues arising out of the Guidance supporting the revised Qualifying Criteria for Medical Reporting Organisations. This month MedCo has published its annual report and financial statements. More details can be found on the MedCo homepage and the Gazette reports that Rogue companies suffer £1m loss from MedCo clampdown.
Claims Management Regulation. Carol Brady published a final report following her independent review of claims management regulation in March 2016. The Treasury and the MoJ had commissioned the review to examine the perception of widespread misconduct among CMCs and to make recommendations to improve the regulatory regime. It was then announced in the budget statement, also in March 2016 that responsibility for regulating CMCs would be transferred from the MoJ to the FCA and since then we had been awaiting information on when the primary legislation required to transfer regulation to the FCA would be ready. We now have that legislation in the form of the Financial Guidance and Claims Bill discussed further above, noting in particular the agreement this month to extend regulation of CMCs to Scotland. At September's PI Futures conference Claims Management Regulator Kevin Rousell indicated that it would be 2018 or 2019 before the FCA take over regulation of CMCs and also confirmed that CMCs will have to be authorised afresh by the FCA. Read more in this Legal Futures report of his speech at the conference.
Holiday sickness claims. Following recent media reports of an explosion in fake holiday sickness claims, the government moved swiftly to announce (July) that it had asked the Civil Procedure Rule Committee to look at the rules governing the costs of holiday claims with a view to bringing them into the fixed recoverable costs regime. The press release also indicated that ministers would soon be asking the Civil Justice Council to look at the rules around how low value personal injury claims more generally are handled to reduce the incentives to bring claims lacking merit. We have reported above on the call for evidence which also notes that the Claims Management Regulation Unit and the Solicitors Regulation Authority are already working together to deal quickly and effectively with any misconduct.
NIHL claims: Government action. In June 2015 the ABI published its report Tackling the Compensation Culture: Noise Induced Hearing Loss, improving the claims system for everyone which highlighted concerns about the increasing numbers and cost of NIHL claims. In response to those concerns the MoJ asked the Civil Justice Council to consider the issue and make recommendations. The CJC published the long awaited report in September, although Jackson LJ had spoilt the surprise at the end of July by announcing and endorsing the agreed fixed recoverable costs matrix as part of his own review (see Simon Denyer's review of the proposals). The news then was the proposals for reform of the claims handling process. You can read more about the proposals in our comprehensive update this month. We also took the opportunity to comment on the handling of NIHL claims in the recent call for evidence in relation to holiday sickness claims and low value personal injury claims.
Update - Mesothelioma claims: LASPO funding provisions. In late 2014 following a Justice Select Committee inquiry, the Government decided not to end the LASPO exemption on recoverability in mesothelioma claims. They said a further review of the likely effects of the funding reforms on mesothelioma claims would form part of the Post Implementation Review of LASPO. A Commons Briefing Note on mesothelioma claims last year speculated this would happen over 2017/2018. On 17 January, Justice Minister Sir Oliver Heald QC attended an All-Party Parliamentary Group meeting on Legal Aid and announced that a post-legislative memorandum on LASPO would be sent to the Justice Select Committee before May ahead of a full post-implementation review of the Act to be conducted by April 2018. Last month we reported on hints that an announcement was imminent. On 30 October the MoJ published its post-legislative memorandum to the Justice Select Committee although Part 2 of LASPO (which brought in the Jackson reforms) will be reviewed separately from the Legal Aid provisions in Part 1. Read more in Simon Denyer's recent update.
Update - Civil Courts Structure Review: LJ Briggs' Final Report. On 27 July 2016, Lord Justice Briggs published his final report following his review of the structure of the civil courts. There was no change from the headline recommendation of the interim report, namely the introduction of an online court capable of handling claims with a value up to £25,000. A detailed summary can be found in the press release accompanying the report and you can read more in Simon Denyer’s analysis. In January the Lord Chief Justice and the Master of the Rolls issued a Joint Statement confirming that the senior judiciary endorses the final report of the Civil Courts Structure Review, and supports the recommendations made by Briggs LJ. And as reported above, we expect the newly proposed Courts Bill to reintroduce the provisions enabling the creation of the new online court. This month the Gazette looks at recent developments and concerns about the online civil court. In the meantime a pilot began in September to trial a procedure that will allow legal representatives to file claims online at the CCMC. The pilot is being run on an invitation only basis and for carefully circumscribed cases.
SRA: thematic review of personal injury sector. In February the SRA announced that it was starting a review to better understand the personal injury market and in August it began approaching a number of firms to participate in its survey. In October the SRA published its research. According to the survey, conducted by ICF Consulting, the perception is that the market seems to be generally working well although there are concerns that require further investigation. These include the quality of medical reports and a lack of knowledge within firms which have moved into areas such as clinical negligence and disease. Read more in Simon Denyer’s update. Work is ongoing to determine the prevalence of the issues highlighted and the SRA is visiting Personal Injury firms to understand how they have adapted following LASPO. The SRA expects to report further this year. In the meantime, in June, campaign group Access to Justice was urging solicitors to report law firms who bring fake holiday sickness claims and says that the SRA is investigating around 15 reports of potential misconduct and in September, the SRA issued a warning notice to solicitors who handle such claims.
CMA legal services study. In January 2016 the Competition and Markets Authority launched a market study to “examine long-standing concerns about the affordability of legal services and standards of service.” An interim report was published in July and the final report followed in December. The CMA found that competition in legal services for individual consumers and small businesses is not working well, and made recommendations to address the issues. In January 2017 the SRA confirmed that it was preparing rules on publishing price information for consultation in the summer. On 27 September the SRA launched a consultation "Looking to the future: better information, more choice" which includes proposals for law firms to publish information on prices and services for certain types of work, such as conveyancing, wills and personal injury work. It is also considering publishing data collated by firms on the complaints they receive. Controversially the consultation also proposes to allow solicitors to provide non-reserved legal services outside of firms regulated by the SRA. The consultation is open until 20 December.
In the long grass?
Issues where there has been no activity for some time:
QOCS: Civil Justice Council report. In 2014 a new CJC working group was set up to advise on issues arising from the implementation of the Jackson reforms. Part of their remit, was to investigate and report on arguments for and against extending QOCS to other categories of case characterised by an asymmetric relationship between the parties such as actions against the police and solicitors’ professional negligence in injury claims. The report (pdf) was published on in June 2016 and concluded there is a strong case for extending the principle to police claims. For solicitors’ negligence claims, whilst there may be a case in principle for extending QOCS here, there does not appear to be a similar push for its application. In both cases, they say that any decision to extend QOCS would be a matter of policy for the Ministry of Justice.
Damages Based Agreements: Civil Justice Council (CJC). The Government's response to the CJC review of DBAs is still awaited. In September 2015 the CJC made a number of recommendations but the main issue of interest going into the review was the Government’s decision not to permit hybrid DBAs, and in particular concurrent hybrid DBAs. The Working Group was divided on whether these should be allowed but it concluded “it was a policy decision which was ultimately one for the Government". Read more in the CJC media release. We understand from a Practical Law update following a Westminster Policy Forum last month that the government might reconsider DBAs within its forthcoming review of Part 2 of LASPO.
For further information please contact Alex Fusco, Professional Support Lawyer on 0161 603 5211.
This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.