The first part of April was relatively quiet as both parliament and the judiciary were on their Easter holidays. Things started moving on 17 April when Lord Keen gave a keynote address at the APIL Annual Conference. The speech provided a useful overview of the current MoJ priorities bringing commenting on a number of the proposed areas of reform that we follow in Looking Ahead. The message taken by claimant representatives was that there would be no let-up in the reform plans.
The next date that everyone was waiting for was the second reading debate of the Civil Liability Bill which took place on 24 April when a heavyweight cast of lawyers who sit in the House of Lords lined up to speak. Coincidentally, and earlier than last year, the Compensation Recovery Unit published its annual performance data showing a significant fall in the number of new claims made. As Simon Denyer noted in his update on the debate "unsurprisingly the new figures were quoted either in terms of the extent of the decrease, or by reference to the fact that the numbers remained high when a historical comparison was made."
The previous week had seen the long awaited Supreme Court decision in Edmondson v Haven in which it was determined that claimants' solicitors had been deprived of their costs when an insurance company had settled portal claims direct with the claimants. Whilst the decision may have implications for historic claims it would seem likely that its significance may well be overtaken by the forthcoming reforms.
In other developments this month, the new Pre-action protocol for resolution of package travel claims was announced and will come into force on 7 May and the Online Court Pilot entered the 'Public Beta' phase.
We look at these developments below along with our usual round up of forthcoming cases and other 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. Judgment is awaited.
Update - Portal claims: direct offers. In Gavin Edmondson Solicitors Limited v Haven Insurance Company Limited an insurer settled six portal personal injury claims on an all-inclusive basis directly with the clients of Gavin Edmondson Solicitors who had CFAs with its clients. The solicitors were therefore deprived of their costs and the Court of Appeal allowed Edmondson's claim for equitable interference against the insurer to recover its costs. Judgment was due to be handed down last month but was postponed and was instead handed down on 18 April. The Supreme Court dismissed the insurer's appeal but for different reasons from the Court of Appeal. Read more on the decision and its implications in our update.
Police: duty of care to employees. The question in James-Bowen v Commissioner of Police for the Metropolis is whether a person who is sued in civil litigation for alleged misconduct by his employees (or others for whom he is vicariously liable) owes those employees a duty of care in the conduct of his defence. The hearing took place on 6/7 March 2018 and judgment is awaited.
Negligence: banking. The case of 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 appeal took place on 24 April and judgment is awaited.
New – Local authority: protection from harassment. The Court of Appeal in CN v Poole Borough Council held that a local authority owed no duty of care in the exercise of its social services child protection functions, to protect two children from harassment by a neighbouring family. 1 Chancery Lane has reported that the Supreme Court will hear the appeal on 16/17 July 2018. Read more on the Court of Appeal decision in our update from December.
Supreme Court cases awaiting developments. We await further official details for the following cases where 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.
Perry v Raleys Solicitors is a professional negligence claim concerning the alleged under-settlement of a vibration white finger claim. Read more in this Crown Office Chambers update.
In R&S Pilling T/A Phoenix Engineering v UK Insurance Limited the issue in the Court of Appeal was whether motor insurance extended to liability for damage to the property of third parties as a result of fire caused by repair work being carrying out to a stationary car, i.e. whether the repairs amounted to "use" of the vehicle. We understand that the hearing is due to take place on 13 December 2018.
In Cameron v Hussain & LV= the Court of Appeal held that a claimant was able to bring her claim for damages arising out of a road traffic against an unidentified driver.
Court of Appeal
Professional negligence: solicitors. Dreamvar (UK) Limited v Mishcon De Reya (a firm) and Anr concerns a fraudulent property transaction in which a fraudster impersonating a property owner purported to sell the property to the claimant. In seeking to recover the loss it had suffered as a result of the fraud, the claimant brought claims for negligence and breach of trust against its own solicitors and solicitors acting for the fraudster. The appeal took place in the week of 26 February and judgment is awaited.
New – Applicable law: accident in France. The issue in Committeri v Club Mediterranee SA & Anor was whether French or English law applied where a claimant had a climbing accident in France. The answer to the question depended on whether the claim was contractual or non-contractual in nature. The judge held the claim was contractual so that English law applied and this meant that the claimant had no viable claim. The appeal is listed for 9 May.
Procedure: non-party costs orders. The issue on appeal in XYZ v Travelers concerns the application for an order under s.51 Senior Courts Act 1981 for a non-party costs order against the insurers in a product liability claim. The appeal is now due to take place on 9/10 May 2018.
Vicarious liability: connection with employment. At first instance in Bellman v Northampton Recruitment Ltd 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 now been listed for 12/13 June 2018.
New – Asbestos: access to documents from settled litigation. Late last year Master McCloud granted an application by the Asbestos Victims Support Groups Forum UK for disclosure of the documents referred to in product liability litigation which had settled earlier in 2017. The disclosure contained "extensive quantities of historic material and records relating to asbestos safety and regulation" relating to the question of what was known and when about the safety of asbestos. An appeal has been listed in Dring (For and on behalf of The Asbestos Victims Support Groups Forum (UK)) v Cape Distribution Limited & Ors for 18 June 2018.
Update - Discount rate consultation. Last month we reported on the MoJ's response to the Justice Committee's pre-legislative scrutiny inquiry into the draft legislative provisions which will enact the proposed changes to the method of setting the discount rate. That response coincided with the publication of the Civil Liability Bill which incorporated the draft provisions. We now follow those provisions in the Legislation section of Looking Ahead below.
The following consultations are currently open:
New - Legal services: insurance and compensation. The SRA has launched a consultation on changes to the legal insurance and compensation rules with proposals including limits to the compensation fund and reducing minimum PII cover. The SRA says these changes will give firms more flexibility to choose the right level of insurance to suit their business and clients, while making sure there are still appropriate protections for users of legal services. The proposals include:
• reducing the maximum single claim limit to £500,000 (£1 million for conveyancing)
• keeping the need for a six year run off period of insurance after a firm closes but capping the overall level of cover at £3m for firms that have done conveyancing work and £1.5m for other firms
• removing the need for compulsory insurance to include cover for large commercial clients
The consultation will run until 15 June 2018. This month the Law Society has published a briefing to provide an overview of the consultation.
The following consultations are awaiting official responses:
If any client wishes to request any of the DWF consultation responses referred to below they can do so by emailing email@example.com
Update - Small claims track limit increase. On 5 December the Justice Committee launched a new inquiry into the government's proposals for raising the small claims track limit for personal injury via secondary legislation. The Committee planned to take account of the written and oral evidence submitted to the unfinished 2017 inquiry into personal injury: whiplash and the small claims limit, but invited further written submissions. DWF made submissions on both occasions. On 16 January the Committee held an oral evidence session at which DWF's Nigel Teasdale gave evidence on behalf of FOIL. In February it emerged following an MoJ meeting with MASS, APIL and the Law Society that the RTA reforms are now expected to be implemented from 2019 with the reforms in non RTA claims coming later. Although the small claims track limit does not feature in the Civil Liability Bill (as the measure can be introduced through secondary legislation) concern was expressed by a number of the speakers during the second reading of the Bill last week.
Reforming the soft tissue injury (whiplash) claims process - Part 2. In February 2017 the government published the first part of its response to the Reforming the soft tissue injury (whiplash) claims process consultation, to which DWF responded. It then incorporated its proposed reforms to the whiplash claims process within the Prisons and Courts Bill which we reviewed in our update last year. That Bill's progress ended with the dissolution of parliament but the whiplash provisions have been reintroduced within the Civil Liability. In the meantime a second part to the consultation response is still awaited and is due to look at the outstanding proposals including, the Insurance Fraud Taskforce recommendations, credit hire and rehabilitation. Last month (7 March), Justice Minister Rory repeated the 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, to which DWF contributed, on 31 July. His proposals are to extend fixed costs in claims worth up to £100,000 along with the remaining fast track cases not yet subject to FRCs. The report is being considered by the senior judiciary and the MoJ, and a consultation will hopefully be launched before too long. The government's response to the clinical negligence fixed costs consultation confirmed in February that "the Lord Chancellor will announce the next steps in due course," and last month Lord Keen responded to a question, saying "the government is considering the report and will set out the way forward in due course". This month in his speech at the APIL conference Lord Keen made similar comments but added "the government will consult before implementing any changes so stakeholders will have a further opportunity to express their views."
Update - Review of low value personal injury claims including package holiday claims. In October the MoJ published a call for evidence following their announcement last July of measures to tackle the apparent increase in package holiday sickness claims. At the same time, the MoJ asked the Civil Procedure Rules Committee to look at amending the EL/PL protocol to fit these types of claim and asked the Civil Justice Council to look at low value claims more generally. We have been following the work of the CPRC on the new Protocol and knew that it was nearly complete, so it was not a huge surprise when this month the MoJ announced that holiday sickness claims will be dealt with under the new Pre-action protocol for resolution of package travel claims from 7 May as part of the latest CPR update. It seems likely that attention will now turn to the outstanding part of the call for evidence, namely the wider consideration of all low value personal injury claims.
Credit hire: model directions. Last June, the Civil Procedure Rules 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 and DWF responded.
Update - Motor insurance: implications of ECJ Vnuk ruling for UK legislation. In December 2016 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, to which DWF responded, closed in April and the government's response is awaited, although we know that the preferred option is to amend the Directive. 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 held a wider consultation which closed in October. Also in October the Department for Transport responded to a written question confirming that its "priority for the REFIT review is the correction of the scope of the Directive." We await further developments, both on these consultations and on the next steps following the recent Roadpeace judgment which declared domestic law incompatible with Vnuk. In the meantime last week saw an opinion from Advocate General Bobek on the question of "use of vehicles" in the Portuguese case of Fundo de Garantia Automóvel v Juliana. An unused car which was kept in the yard at home was stolen and involved in an accident and in the A-G's opinion the obligation to insure extends to that situation.
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 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." The working group was seeking feedback until 28 February 2018 and the proposed schemewas expected to be submitted to the Civil Procedure Rules Committee for review and approval in March/April 2018, although we have yet to see the most recent minutes of the CPRC meetings to establish whether there have been any further developments. Read more about the pilot in Litigation Futures.
Default County Court Judgments – At the end of December the MoJ launched a consultation looking at the processes for money claims issued in the County Court. They have particular interest in views on limiting the circumstances in which an individual can have judgment entered in default against them without their knowledge. DWF submitted a response to highlight the issue of judgment being entered against policyholders in insurance claims when it is an insurer who will ultimate pay the claim – the MoJ had not identified this scenario in its consultation. The consultation closed on 21 February.
McKenzie Friends. In February 2016 a Judiciary consultation Reforming the courts’ approach to McKenzie Friends was launched following a Working Group review looking into the increasing numbers of fee charging McKenzie Friends. The consultation invited views on possible reform including the revision of Practice Guidance, or codification of the practice and procedure relating to McKenzie Friends. As part of that, the consultation asked whether there should be a ban on fee charging McKenzie Friends. DWF responded. In September 2017 the Judicial Executive Board announced that a large number of responses were received and that a further working group would review the proposals in light of the responses. Read more in the Gazette.
The long awaited Civil Liability Bill was published last month. We report on the Bill's second reading and developments on the other legislation we are following. There is still no sign though of the Courts Bill.
Update - Whiplash reform: Civil Liability Bill. As we reported last month, the Civil Liability Bill was introduced in the House of Lords on 20 March. The Bill contains the whiplash provisions outlined in last year's Queen's Speech to "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 also contains the provisions for changing the method of setting the discount rate. The Bill had its second reading on 24 April 2018 where the principal objection during the debate was about the use of secondary legislation to flesh out details of the definition and tariff for whiplash claims. The discussion on the discount rate mostly concerned the process of reviewing the rate, rather than the change to the investment assumptions, with a number of peers supporting a 5 year review period. The Bill is due to enter the Committee stage on 10 May and Lord Faulks has already tabled amendments (opens in pdf) which would speed up the first review, change the review period to 5 years and introduce potential situations where the court could consider setting different rates. You can follow its progress and find all related documentation on the Bill's webpage, including a new briefing note which was prepared for the second reading. Simon Denyer also outlines the issues debated in the second reading in this update.
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. In March, in a debate about imminent court closures, the Lord Chancellor David Gauke said, "I hope to be able to bring forward further news on the courts Bill in the near future". You can also read more below about developments on the online court pilot.
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. By the end of February it had finished its passage through the Commons and had already had its second reading in the House of Lords. We were awaiting dates for the Committee stage and these have now been announced as 9 and 17 May. You can follow the progress of the Bill here and a Lords Briefing note has been published on it. Also this month a letter has been published (opens in pdf) from Transport Minister Baroness Sugg seeking to address some of the specific issues raised in the last debate. On the insurance part of the Bill the Baroness offers a meeting before the Committee stage to clarify some of the terminology used when discussing the Bill.
Update - Claims management regulation: Financial Guidance and Claims Bill. The provisions in the Bill relating to claims management regulation are those which came out of the 2016 Carol Brady review and the consultation on capping fees. The most straightforward provision has been the transfer of regulation to the FCA. More controversial have been the calls for a cap on the fees CMCs can charge in personal injury claims and for a complete ban on cold calling. After some confusion over what the government was promising in relation to a cold calling ban, the Committee stage in February resulted in a clause prohibiting calls for direct marketing of claims management services except where the recipient of the call has given consent i.e. not a blanket ban. The extension of regulation to CMCs in Scotland was also added in Committee. DWF had contributed to the debate by submitting written evidence before the Committee stage. This month, the Bill had its postponed third reading on 24 April when the question of an outright cold calling ban was raised again. No further amendments were made on this issue but the government has agreed to keep talking about the outstanding concerns before the Bill concludes its passage through parliament. The Bill enters the ping pong stage on 1 May. Also this month HM Treasury opened a technical consultation seeking views on the proposed secondary regulations that will enable the transfer of claims management regulation to the FCA. The consultation closes on 1 June 2018.
Update - Data Protection Bill. Having been introduced in the House of Lords on 13 September the Bill has now completed its passage through the Lords and has had its first reading in the Commons. The Bill widens the reach of GDPR which as a Regulation is already directly applicable in the UK. 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. The Bill moved from the Lords to the Commons with a new clause at paragraph 15 of Schedule 1 permitting the processing of special category data that is necessary for an insurance purpose. This month the Public Bill Committee completed its work and reported the Bill with amendments to the House. A new Commons Briefing note reports on the Committee stage and dates are awaited for the Report Stage and Third Reading. You can continue to follow the Bill's progress here
The following Law Commission draft Bills are also awaiting further developments:
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. In March 2017 the Law Commission published its final report along with a draft Bill. It recommended 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. In February the Joint Select Committee on Human Rights launched an inquiry into the proposed reform of the DoLS and whether it is striking the right balance between adequate protection for human rights with the need for a scheme which is less bureaucratic and onerous. Last month the government published its final response in which it sets out its provisional views on the individual proposals. Broadly it agrees with the Liberty Protection Safeguards model but it also wishes to consider the proposals as part of its review of the Mental Health Act and in the wider health and social care context, so work will continue to be done to move towards implementation. Read more from the Law Commission and the Gazette.
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 for consultation in due course.
Also on the horizon...
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. In the whiplash consultation in late 2016 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, which covers the IFT recommendations, is still awaited. In the meantime, last 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. In October, following an IFT recommendation the Claims and Underwriting Exchange (CUE) was expanded to accept data relating to travel insurance claims. In December Justice Minister Dominic Raab answered a question on the steps being taken to implement the IFT's recommendations and to reduce personal injury fraud generally. In February the SRA published a report on what it has been doing in response to the IFT report. Read more in Legal Futures.
MedCo. In October 2016 the MoJ published revised Qualifying Criteria for MROs, effective from 8 November 2016. MedCo immediately suspended 134 shell companies for failing to comply with the new Qualifying Criteria and over the course of the next 6 months or so, MedCo reported on a range of enforcement action. Last August MedCo warned against "inappropriate behaviour" during the audit process and in October MedCo published an FAQ document (pdf) to address common issues arising out of the Guidance supporting the revised Qualifying Criteria. In November MedCo published its annual report and financial statements and in December gave an update on its audit programme. More details of these developments can be found on the MedCo homepage.
Update - 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 that responsibility for regulating CMCs would be transferred from the MoJ to the FCA. This is being taken forward in the Financial Guidance and Claims Bill discussed further above and as we have reported HM Treasury has now issued a consultation (which closes on 1 June) inviting views on the accompanying draft regulations. A new CMR Bulletin this month provides a helpful summary of recent developments and issues of interest for claims management services.
Update - Holiday sickness claims. As we have reported above, the MoJ has now finalised the Pre-action protocol for resolution of package travel claims and associated fixed costs which will apply to claims started on or after 7 May 2018. Read more about recent developments in Miles Hepworth's update from last month.
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 its long awaited report in September 2017, although Jackson LJ had spoilt the surprise 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 new news then was the proposals for reform of the claims handling process. You can read more about the proposals in our comprehensive update. We also took the opportunity to comment on the handling of NIHL claims in the 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 of additional liabilities 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. In January, the then Justice Minister, Dominic Raab responded to a written question about CFAs and DBAs saying, "the government is committed to carrying out a post-implementation review of Part 2 of the LASPO Act, to be completed by summer recess 2018." However, following an appearance by the Lord Chancellor before the Justice Committee in March, we now know that the review of Part 1 of LASPO is unlikely to be completed before the summer and it would therefore not be a surprise if the review of Part 2 were similarly delayed. This month in his speech at the APIL conference Lord Keen confirmed that the review of Part 2 will take place this year, that feedback will be sought from stakeholders and that the Civil Justice Council will host a stakeholder conference to consider the impacts of Part 2.
Update - Civil Courts Structure Review: LJ Briggs' Final Report. In July 2016, Lord Justice Briggs published his final report following his review of the structure of the civil courts. The headline recommendation was 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 2017 the Lord Chief Justice and the Master of the Rolls issued a Joint Statement endorsing the report and supporting the recommendations. The Courts Bill proposed in the Queen's Speech is expected to reintroduce the provisions enabling the creation of the new online court but the Bill is still awaited. In November the Gazette looked 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. This month the pilot moved on to the 'Public Beta' phase. Read more in Legal Futures.
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 and in December the SRA published its review which found that firms generally had adequate systems and processes in place, yet also found some issues which could lead to misconduct. At the same time the SRA issued a revised warning notice arising from concerns about how law firms handle personal injury claims, especially when dealing with CMCs. An SRA report (pdf) published in February on its work following the Insurance Fraud Taskforce report revealed the number of complaints it had received about referral fees and cold calling, and also the scale of law firms' dependence on the personal injury market.
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 2016. 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 December 2017 the government responded and ruled out a review of legal regulation, although Lord Keen did agree that improvements to the framework can be made through incremental changes. We have also been reporting on the SRA's work in this area: in January 2017 the SRA confirmed that it was preparing rules on publishing price information for consultation in the summer. In 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 closed on 20 December. In January, the SRA published research on "Price transparency in the legal services market" which was carried out off the back of the CMA market study. Last month the SRA launched a consultation on proposed changes to legal insurance and compensation rules which they say should make users of legal services "benefit from a more competitive market place and increased choice". The consultation runs until 15 June 2018. Read more in Legal Futures.
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 in October that the government might reconsider DBAs within its forthcoming review of Part 2 of LASPO. In February the Gazette reported on a suggestion that the way DBAs may be introduced into Scotland could demonstrate how their use in England and Wales could be increased. In his valedictory speech in March Lord Justice Jackson summarised the current problems with DBAs saying "There is a pressing need for work here by the MoJ and the Rule Committee."
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 but to date there has been no response. In December 2017, while responding to the CMA Legal Services Market Study, the government confirmed it would not be going ahead with a consultation on regulatory independence as it believes there is scope to make more progress within the existing framework.
For further information please contact Alex Fusco, Professional Support Lawyer on 0161 603 5211.
You can find all previous editions of Looking Ahead here
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.