No clarity over PI reform as D-day fast approaches

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No clarity over PI reform as D-day fast approaches

11th January 2013

‘D-day’ for personal injury lawyers and claimants is now less than four months away and yet many issues relating to the major forthcoming changes to the personal injury system still remain outstanding.

APIL President Karl Tonks said that unless defendant and claimant lawyers are provided with the clarity they need, they will be unable to prepare their business models in time for this new world and access to justice for claimants will almost certainly be eroded.

"After-the-event (ATE) insurers are yet to offer real clarity about how they will operate under the terms of the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act," said Karl, a partner at Fentons Solicitors LLP. "We do not know how ATE insurance will be priced and whether insurers will insure every case.

"If the rules on qualified one-way costs-shifting (QOCS) have been decided by the Civil Procedure Rules Committee they have yet to be communicated, leaving lawyers and insurers with very little time to adjust their business models accordingly.

"Then there is the spectre of the return of the ‘costs wars’ as a result of the extensive amount of information a solicitor will be expected to give to a client when entering into a conditional fee agreement (CFA) or a damages-based agreement (DBA) although we cannot yet be certain that DBAs will even be introduced in April. The combination of requirements in the draft regulations and the LASPO Act will inevitably mean a return to arguments about the enforceability of CFAs and DBAs.

"In fact, how can anyone even draft a new CFA or DBA without sight of the relevant regulations?

"While we are obviously delighted that the government has said it will now reconsider the date for extending the RTA claims process, the whole situation is still shrouded in uncertainty. What we now need is for the government to come back with a realistic date for the portal extension which will allow delivery of an efficient, workable system, which has been properly tested.

"The government must also rethink its views on the new fixed fees which have been proposed without any obvious reference to proper data, do not reflect the work involved, and only serve to cut independent legal advice from the system.

"Clarity is urgently needed on how referral fees will operate within alternative business structures (ABSs). We do not know whether joint ventures between law firms and claims management companies will comply with the new rules. Similarly, it’s unclear as to whether joint ventures between insurers and panel law firms will comply. Businesses must be able to adapt to the changes, but time is running out and there is still no clarity on how the new rules will work.

"The government must recognise that it is not just lawyers who will bear the brunt of the lack of details on these reforms.

"Access to justice for genuinely injured claimants will inevitably be damaged as lawyers will be at a loss as to how they will be able to proceed with cases. It is ironic that, at a time when such emphasis is placed on the need for a victims’ minister and a victims’ commissioner, innocent victims of negligence are likely to be made to suffer the negative impact of all these ill-conceived shambolic changes.

"Unless all these matters are ironed out as a matter of urgency, brace yourselves for chaos in April."

This article appeared on the Law Society Gazette website on Friday 11 January 2013