Reforms Watch
Whilst Brexit continues to dominate the political landscape, there are mixed messages around implementation of the Civil Liability Act, the tariff and small claims track limit rise.
The position of the MIB is quite clear – their build and testing of the online portal is on track for the April launch. The MIB has said that consumer feedback to the first phase of testing at the back end of 2019 has been 'very positive', and further testing of the portal would take place later in January 2020. Once this next batch of testing is complete, more in-depth feedback has been promised. Dominic Clayden, MIB CEO has stated that, from the MIB's perspective "the build has gone well and overall delivery is in good shape".
Registration for using the new whiplash portal, or the snappily titled "Official Injury Claim", as we now know it will be called, for both claimant representatives and compensators opened on 22 January 2020. Compensators will need to register in good time in the event the reforms do go ahead in April 2020.
The MOJ maintain that the focus is April 2020 until it is no longer 2020, yet people on all sides of the industry are uncomfortable with the lack of progress of the new Civil Procedure Rules required to implement the changes. Certainly the poorer the alignment between systems and rules, the greater the chance of satellite litigation challenging the process – the so-called 'tariff-plus' damages for non-whiplash injury sites being just one example where gaming of the system can be expected.
Whilst we have understood for some time that ADR is no longer in scope for the new Portal for unrepresented or represented claimants, there has been no confirmation of any policy decision there or any further clarity on representation of minors where the claim value is under the £1,000 small claims limit.
Of most concern from a consumer perspective is the lack of any communication to the wider public about the existence of the new Portal and the ability to claim directly after April 2020. It is confusing enough for people steeped in the claims industry, so can we really expect any unrepresented consumers to do anything other than run to the nearest CMC who will welcome them with open arms?
Although the knock-on effect for the court process will not be felt for perhaps 6-8 months, as we know from last month's Civil Justice statistics, cases are taking longer to reach trial, including on the small claims track. This track will be expanded significantly to include personal injury claims up to £5,000. How will the increased numbers affect the time taken to get to trial? Is there any great incentive for compensators to settle liability disputed cases with a low cost risk or will they opt to give their insured their day in court and run to a hearing in any event? This could lead to a logjam in a court service already creaking under enormous pressure of resources. Of course, eventually technology may take some of these pressures away but that time does not seem imminent. The Online Court that Briggs envisioned for 2020 remains a distant prospect to practitioners.
We will know more early next month, although that feels a familiar phrase…
Case Law /Legislation Watch
Cycling Offences
The Road Traffic Offences (Cycling) Bill 2020 has been introduced in the House of Lords seeking to amend the RTA 1988 to create criminal offences for dangerous, careless or inconsiderate cycling applying to pedal cycles, electronically assisted pedal cycles and electric scooters. This area of the law is ripe for development. Insurers will be particularly interested in electric scooters, which continue to be controversial. This is however a Private Members' bill which may struggle to get through both houses.
Already most large cities on the continent see a prevalence of electric scooters being driven seemingly without restriction on pavements and roads. Currently use of electric scooters is illegal on roads in the UK, something that appears not widely known. Yet it remains a major growth market, and something like 50-60,000 e-bikes were sold in the UK last year, e-bikes however not being illegal or requiring compulsory insurance at the present time as long as they comply with rules that make them 'electrically assisted pedal cycles'. For environmental and mobility reasons this growth in both e-bikes and electric scooters is likely to continue. The amount of accidents and injuries caused abroad makes the likelihood of compulsory insurance for such vehicles in the UK greater (due to public policy pressures rather than European alignment post-Brexit) and this could be a major growth opportunity for insurers if car use reduces as much as expected in the coming decades. FOIL are holding a roundtable on the future of electric scooters/e-bikes on 11 March 2020.
Smart Motorways
After five people died in 10 months on a 16-mile stretch of the M1, Rotherham MP Sarah Champion has called for smart motorways to be halted, over concerns of the safety of "All Lane Running" motorways. The MP has asked the government to "take the opportunity of a recently announced review into smart motorways to change course and prevent further loss of life" and the issue will be the subject of tonight's Panorama on BBC One.
Nuisance calls
One of the banes of the industry has been calls pressuring individuals to make claims in RTA, holiday sickness and PPI. Now action has been taken against Gregory Rudd the owner of Keurboom Communications, which apparently made 100 million nuisance calls over a 2 year period between 2014 and 2016. After the firm was fined £400,000 in 2017, the owner has now been disqualified from being a director and cannot be involved in management of a company for six years without court approval. However judging by personal experience, the problem of nuisance calls continues largely unabated.
Portal fixed costs – Motor or PL?
Gordon Exall has reported recently in his blog a case dating back to September 2019 regarding the application of fixed costs in a case that was deemed neither to follow the PL or RTA Protocols. In Bateman v Devon County Council in Plymouth County Court, a rider of a motorbike came off the road due to a large pothole that was poorly maintained by the Council. The claimant accepted a Part 36 offer of £1,500. The claimant's representatives maintained they were due costs on an hourly rate but the defendant disagreed stating that fixed costs applied. It was agreed that the RTA Protocol did not apply as the defendant was not a road user, but the defendant submitted that the EL/PL protocol applied, since it was not a road traffic accident as defined within either the EL/PL or RTA protocols. The defendant went on to argue that the EL/PL protocol should be interpreted in a purposive way such that fixed costs applied. Alternatively, fixed costs should be applied indirectly using CPR Part 44.4. Both arguments failed with HHJ Mitchell finding that if there was a gap in the rules, it was not clear that 'there was some inadvertent overlooking of an intended purpose' that meant it should be fixed by this case. The judge held that fixed costs did not apply and the defendant did not seek leave to appeal.
Without changing the wording of the protocols, it is doubtful that the extension of fixed costs to £100,000 (also capturing some additional claims types such as damage-only claims) alone will correct this gap in the rules. It may be the case that the protocols themselves have to be amended including the range of exclusions to them.
Part 36 & indemnity costs
Hitting the Court of Appeal this month is the case of Burgess & Anor v Lejonvarn which concerns the award of indemnity costs for 'out of the norm' conduct. In the High Court, it was decided that the fact that the defendant did better than their offer to settle did not give rise to an automatic entitlement to indemnity costs. The claimant was unsuccessful at trial, being awarded nothing at all against a pleaded case of £360,000. The defendant had made a £25,000 Part 36 offer. In the High Court, Judge Martin Bowdery QC stated 'in general terms, an award of costs on the indemnity basis is justified only if the paying party's conduct is morally reprehensible or unreasonable to a high degree'.
This criteria was not met so the High Court decided that indemnity costs did not apply. The Court of Appeal judgment will be of significant interest.
New RTA Claims in December
New claims notifications in December 2019 fell by a significant 15.7% from the November figure, down to 50,499. However, when taken against December 2018 this figure was 7.1% or 3,331 CNFs up on the prior year. This is reflected in the cumulative 12 month graph showing a slight uptick:
There were 689,573 CNFs presented in the calendar year 2019 compared to 697,558 in 2018 so pretty flat overall.
It will be interesting to see how the early months of 2020 develop and whether we will see an increase in CNFs submitted ahead of the April deadline.
New Casualty Claims in November
PL Claims
A quiet month for PL claims with 3,351 CNFs submitted, down a sizeable 25.7% on the prior month but more stable year-on-year with just a 2.4% drop on 2019.
EL Claims
There were 2,622 new EL Accident claims in the Portal in December 2019, again a very significant reduction compared to the prior month of 30.8%. Once again, the year-on-year position is more stable with just a 5.4% drop. December does not seem a popular month for EL/PL claims submission, with the inevitable reduction caused by fewer working days and people enjoying extended breaks. Next month will no doubt see an upturn as has happened in previous years.
Stage 3 Usage and PSLA
Surprisingly, given the new Judicial College guidelines in place from November, PSLA fell across all areas save PL which saw a rise of 1.4%. RTA was almost static at an average of £2,822 or a fall of 0.4%.
Average PSLA in EL accident claims fell by 5.4% to £4,271. EL Disease saw a significant drop of 13.2% but as always, this is based on very low numbers.
Court Packs were down in RTA (below) to the lowest figure since August 2016 although December is traditionally a quiet month for court packs. The trend was also down for EL Accident but slightly up in EL Disease although based on low figures in any event. PL Court Packs were up by a significant 16.7% but again on comparatively low numbers compared to RTA.
Hopefully by next month we will have more to report on whether April 2020 remains the go live date for the whiplash reforms. If we don’t have any rules by then surely implementation will be pushed back. Let's wait and see…
Contact
For more information please contact Nigel Teasdale, Partner Nigel.Teasdale@dwf.law
