5 ways restricting access to justice will hurt insurers

Photo of Kevin Donoghue, a solicitor who explains how restricting access to justice hurts insurers.
Solicitor Kevin Donoghue explains how restricting access to justice will hurt insurers.

By Kevin Donoghue, solicitor

A year ago I wrote to my local MPs. I explained why they should fight government proposals to raise the small claims limit to £5,000, which will potentially restrict access to justice to (up to) 95% of accident victims. Despite our best efforts, it seems that the government ignored these arguments, preferring evidence put forward by insurers that stand to profit from the change. In November 2016 the Ministry of Justice firmed up plans to raise the small claims limit. A short consultation period ended in early January, and formal plans are expected in spring. Insurers may be optimistic that the small claims limit will go up but, as the saying goes,

Be careful what you wish for; you may receive it.

Here are 5 reasons why insurers may regret their efforts to restrict access to justice for innocent accident victims.

They will lose:

1. Claimant solicitors as gatekeepers

Insurers hate to admit this, but claimant solicitors help them save time and money. How? By acting as gatekeepers. As qualified professionals, we are duty bound by a code of ethics to act in our clients’ best interests. Sometimes this means telling people something they don’t want to hear: that their claims are not worth pursuing. By doing so we protect our clients from the time, trouble, and cost of litigation. And we ensure potential defendants and their insurers are not troubled with unmeritorious claims.

The plan to increase the small claims limit to £5,000 means that this claims screening service will disappear for almost all personal injury claimants.

Without expert advice, most claimants will not know the strengths and weaknesses of their cases. They might be unduly confident about prospects of success and/or the value of their claim. And, because costs in the small claims track are very limited, the fear of losing financially will not deter people who simply want their day in court.

Insurers are process-driven, and will handle unmeritorious claims in the same way as they would any other case. This could mean paying lawyers to defend them in the small claims court knowing that, even if the insurers win, they will not recover anything close to their own legal costs from the losing claimant.

Alternatively, insurers may take an economic view and settle claims which otherwise would not be paid. Either way, it will drive up the number of claims made and cost insurers money to deal with and/or pay them.

2. Expertise on the claimant side which helps insurers handle claims cost-effectively

Claimant solicitors bring knowledge and experience to the claims process which enables defendant insurers to streamline their operations. Because solicitors like me have many years of training and practical experience we pursue claims efficiently and in accordance with the complex Civil Procedure Rules. We present only viable cases with winnable heads of claim. As we take cases to trial we plead them properly, file compliant court documents, attend hearings, meet deadlines, and represent our clients fearlessly, but properly, at trial.  By doing so we seek to present our clients’ cases in the professional manner they deserve.

As a result, insurers know that the claimant’s case will be properly presented and that they can deal with it in accordance with the Rules. This allows them to structure their departments efficiently, so that the right people are dealing with matters at the right time.

By contrast, cases brought by Litigants in Person or unqualified claims management companies are unlikely to be progressed with the same level of expertise or efficiency. Although it is true that anyone can pursue a claim at court, and if the small claims limit is increased many more will, the system can be challenging for the uninitiated. Without expert representation from a solicitor it is inevitable that some claimants will struggle. Judges will be expected to provide guidance and hand-holding, but can only go so far while remaining impartial. Defendant insurance representatives and their appointed solicitors will soon tire of direct contact with Litigants in Person, especially angry claimants who feel mistreated.

All this will increase time, money, and the stress on insurers’ claims handlers and lawyers.

3. Internal legal department profits

People usually contact their insurers immediately after a road traffic accident. This gives insurers early access to potential personal injury claimants’ details. In the past insurers took this information and passed it to preferred “panel” solicitors, for a referral fee. This was a highly lucrative business. For example, Direct Line made £21.1 million in referral fees in 2012. It’s easy to see why panel solicitors would pay so much. Liability in road traffic accidents is more straightforward compared to other areas of personal injury law. And, even if the insured driver was at fault, his or her passengers may be entitled to claim compensation.

But, for insurers, getting millions of pounds in easy referral fees wasn’t enough. When the Legal Aid, Sentencing and Punishment of Offenders Act (2012) (“LASPO”) came into force on 1 April 2013 it banned solicitors from paying referral fees.

Insurers quickly took advantage by taking claims in-house and setting up their own legal services divisions. For example, as this article explains, Direct Line insurance restructured the way they handled claims from both the claimant and defendant side to increase profits significantly.

Raising the small claims limit to £5,000 will hit insurers’ in-house legal services departments hard. Claimants will still want representation, and insurers will no doubt continue to offer it. But without the recovery of legal costs for most personal injury claimants, convincing accident victims to pay their own insurers to bring a claim will be a hard sell, and make it harder for those divisions to turn a profit.

4. Reputation and brand value

Despite a lack of evidence, insurers have effectively sold the government the “compensation culture” myth (read this to find out why). Justice Secretary Liz Truss described “a rampant compensation culture” when announcing the proposal to raise the small claims limit, singling out whiplash claims as “an easy payday”.

Some people may approve if raising the small claims limit cuts down on the number of whiplash claims. But these reforms go further. If the limit is increased to £5,000 genuine claimants in all areas of personal injury (not just whiplash claims) will be affected. This includes accidents at work, tripping and slipping accidents, and other accident claims. For example, someone suffering a broken collarbone after a fall at work might only be entitled to £4,290 compensation for the injury (from the Judicial College Guidelines, 13th edition). If they want compensation, the innocent accident victim may have to seek access to justice in the small claims court, and is unlikely to have expert legal representation.

Accidents at work can be complex. Claimants must navigate legislation, common law, and the claims process to seek compensation. Insurers routinely deny liability, often referring to technical points and case-law. They will be emboldened by the fact that they are dealing with claimant novices. They will fight claims that might otherwise have settled if the claimant had a solicitor.

But there’s a risk to this approach. In today’s connected world, insurers may find themselves on the receiving end of a social media backlash. In the example above it’s easy to imagine the innocent accident victim going on Facebook, Twitter, and Instagram, posting pictures of themselves in a sling, and holding a letter from an insurance company denying liability. Such posts could get plenty of likes, shares, and even mainstream media interest. It is unlikely that the insurer would get any sympathy.

Insurance is built on trust. Avoiding genuine claims undermines it. It is easy to see how negative publicity could lead to reputational damage and loss of brand value.

5. Government support

Some insurers have convinced the government to propose an increase in the small claims limit with the promise of a £40 saving on motor insurance policies. (Note that this will not be written into law so can be easily ignored.)

This possible, but unlikely, saving to the public is not nearly enough to cover the increased costs to the country caused by the decimation of this legal sector if the small claims limit goes up. As well as

  1. making countless genuine claimants fend for themselves in already-stretched courts, and
  2. losing the Treasury an estimated £1 billion in revenue,

a recent report estimates that 35,000 people are at moderate to high risk of losing their jobs in the law. Contrast this with a “key assumption” in the government’s impact assessment that:

Those providing services (lawyers, medical experts, Claims Management Companies) are assumed to find alternative activities of equal economic value.

This is wishful thinking to say the least, and by coincidence, is the same number estimated to go from the financial services industry if the UK leaves the EU in a “hard Brexit”. The government seems determined to push Brexit through, but can the country afford to leave the EU if it also guts the personal injury sector?

The government will quickly realise that it has been sold a pup and target those responsible: the insurance companies that stand to profit.

Mutual Benefit in Protecting Access to Justice

There’s still time to put an end to this madness. Insurers could realise that they stand to lose out and approach the government to discuss alternatives. Viable counter-proposals exist.

And the government could look at the mess Brexit is causing and decide that, at a time of such uncertainty, raising the small claims limit and restricting access to justice is too much for the country to bear.

I sincerely hope so.

 

Kevin Donoghue is the Solicitor Director at Donoghue Solicitors, an award-winning law firm dedicated to providing access to justice.

 

A Solicitor’s Review of 2016 and Predictions for 2017

Photo of Kevin Donoghue, solicitor who specialises in actions against the police, who reviews 2016 and gives predictions for 2017.
Kevin Donoghue, solicitor.

By Kevin Donoghue, solicitor

2016 has been a tumultuous year for the country as a whole, and civil litigation lawyers in particular. But what does 2017 hold? Here I look at three issues which affected us this year and make predictions for how they will play out in 2017.

1.      The proposed increase in the small claims limit

What happened in 2016?

You might think that the immense task of implementing June’s Brexit vote would be enough to keep the government occupied. Sadly not. In November, the Ministry of Justice announced plans to raise the small claims limit for all personal injury claims, and either scrap “whiplash” damages completely, or introduce a cap of £425 for them. As I wrote in February about the small claims limit, at a time of great political upheaval the government’s plan will make it harder for genuine claimants to recover their rightful compensation. It is expected to:

  • cost the country at least £1billion of much-needed revenue
  • deny 85% of injured people legal representation
  • hasten the collapse of the professional legal sector leading to mass unemployment.

Announcing the proposals, the Lord Chancellor, Liz Truss, seems to have bought into the myth of a “compensation culture”. (I wrote about how wrong this is here.)

Prediction for 2017

As this article in the Law Society Gazette points out, instead of solving the (non-existent) problem of a “rampant compensation culture”, these plans will make it worse. By taking ethical, professional, solicitors out of the personal injury sector claimants will suffer at the hands of unscrupulous claims management companies (CMCs).It seems that the government has simply forgotten about the suffering caused to innocent accident victims by the collapse of Claims Direct and The Accident Group, two high-profile CMCs.

And it is naïve for the government to think that raising the small claims limit will cut spam phone calls and text messages. Solicitors are banned from cold calling; claims management companies are not. CMCs, and those who help them with bulk text-messaging and robocalls, must be thrilled with the proposed changes. Expect more of the same.

The Ministry of Justice gave interested parties, including claimant lawyers, a (deliberately?) short period to respond to its consultation. It announced the proposals on 17 November and expects responses by 6 January 2017. It will confirm what will happen in April 2017. Insurance company lobbying means that they are well placed to get the increase in the small claims limit they crave, leading to even bigger profits because insurers will no longer pay genuine lower value claims. If implemented, it is unclear if any of the proposed changes require secondary legislation. If not, the government will proceed with its plans in 2017/ 2018.

2.      Continued attacks on access to justice

What happened?

The proposed increase in the small claims limit joins previous government policies which limit access to justice. During the Article 50 Brexit hearings, the Lord Chief Justice said, “We have in this country a civilised way of dealing with things, and it is simply wholly wrong for people to be abusive of those who seek to come to the Queen’s courts. If this conduct continues, those who do it must appreciate that the full vigour of the law will be used to ensure that access to Her Majesty’s courts are freely available to everyone.”

In this blog post I noted that these stinging words could also apply to the government.

Prediction

Previous and current government policies, particularly:

  • the proposed raise in the small claims limit,
  • failure to extend Qualified One Way Costs Shifting to all actions against the police claims, and
  • keeping prohibitively high court fees

will make access to justice harder to obtain, especially for innocent victims of police misconduct.

3.      Failing Police Culture

Throughout 2016 I wrote about various issues which I come across in my work as a solicitor dealing with civil claims against the police. Among other things I:

There’s a common theme in these posts: concern at the police’s culture and its attitude to public scrutiny.

a)      Police Complaints Reforms

What happened in 2016?

Prime Minister Theresa May’s disgust at, what she described as the police’s “contempt for the public”, led to the Policing and Crime Bill. The Bill, which is one step away from becoming an Act of Parliament,

would implement many of the proposals in the Government’s Improving Police Integrity consultation. It would reform the system of police complaints in the following ways:

  • A major role for Police and Crime Commissioners (PCCs) in the handling of police complaints
  • Changes to the handling of complaints aimed at making the system easier to follow and more transparent
  • Changes to the role and powers of the Independent Police Complaints Commission (IPCC) to reinforce its independence from police forces
  • The introduction of ‘super-complaints’ to allow certain advocacy groups and charities to raise concerns over troubling systemic issues in policing.”

As I pointed out, senior police officers brought these changes upon themselves by deflecting blame and failing to take responsibility.

Prediction

With the Policing and Crime Bill due to become an Act in 2017 the police complaints system will be under increased scrutiny. Its success will depend on the police embracing cultural change from the top down.

b)     Body Worn Cameras

What happened?

A University of Cambridge report found that police body worn cameras had a positive effect on policing. The lead researcher said, “I cannot think of any (other) single intervention in the history of policing that dramatically changed the way that officers behave, the way that suspects behave, and the way they interact with each other.” Chief Inspector Ian Williams of West Yorkshire Police also praised the many benefits of the “excellent” cameras, including increased detection rate, less time at court, and avoiding the need for vulnerable victims to give evidence at court.

Despite this, the system for body worn camera use is flawed and undermines public confidence in three ways:

  1. Instead of using body worn cameras which are constantly recording when on duty, police officers themselves control when the cameras are activated. Also, body worn cameras on the market today have a 2 minute pre-record function, but UK police only use (at best) cameras with a 30 second pre-record period. It is easy to imagine a situation where cameras are used selectively.
  2. Footage is kept for a very short period due to data protection issues. But that law could be used to justify deleting incriminating evidence against the police.
  3. Police officers involved in incidents have the power to edit footage. Editing creates a new, shorter file for use in evidence. But if the original footage is erased, leaving only the selectively edited file, innocent people could be wrongfully convicted.

Prediction

More police officers will wear body worn cameras as the technology and data storage becomes cheaper. The public will expect to see full footage when incidents occur and question its absence and selective editing. To maintain public confidence, the police will need to address these issues and consistently deal with disclosure of footage when matters are “sub judice” (not yet judicially decided).

c)      Spit Hoods

What happened?

Despite some police forces, such as Sussex Police, using spit hoods for years, these “barbaric tools” appeared on the country’s radar after the Metropolitan Police cancelled a trial of their use in police custody suites after a public outcry.

During 2016 I wrote about spit hoods here on our blog, and discussed their use in radio interviews.I:

  • noted that many forces already use, and misuse, the hoods, on children as young as 11.
  • quoted a Freedom of Information Act response which found that none of the spit hoods used by the police have been tested or approved by the government, unlike other forms of equipment such as body worn cameras.
  • described the delicate balancing act between police and public safety, and explained what happened when things went wrong. (In a detailed case study we described how our client Paul Smith (details used with permission) received £25,000 compensation after being wrongfully arrested and spit-hooded.)
  • considered the approach taken by the police officers’ union, the Police Federation. The Federation is keen to see spit hoods issued more extensively, and uses the more neutral term “spit guard” instead of “spit hood”. But that clever bit of PR spin does not hide the fact that people have died after being spit-hooded.

Prediction

The Metropolitan Police is consulting again on the use of spit hoods. After the consultation, it hopes to pilot the use of spit hoods in five custody suites in north-east London. As only 1/3 of police forces presently use spit hoods, the rest will be watching closely to see how the public reacts.

The police were caught on the back foot by the public outcry. I expect they will continue to seek public acceptance of spit hoods (referring to them as “spit guards”) and minimise the risks.

Final Thoughts on 2016 and 2017

2016 will long be remembered for its low points: the rise in hate crimes after the Brexit vote and Donald Trump’s election, Syria, the refugee crisis, terrorist attacks, celebrity deaths, and many other issues. We start 2017 with a blank slate. I urge the government and police to take their responsibilities as leaders seriously, and put the public first.

 

Kevin Donoghue is a solicitor who specialises in civil actions against the police.

 

 

Why are Solicitors Against Raising the Small Claims Limit?

Kevin Donoghue, Solicitor Director of Donoghue Solicitors explains why solicitors are opposed to an increase in the small claims limit.

I recently wrote to my local MP, Peter Dowd, and Louise Ellman, MP (the MP for Liverpool Riverside, where Donoghue Solicitors is based) to ask them to consider the Government’s proposed reforms of the accident claims process, and in particular, raising the small claims limit.

Photo of Kevin Donoghue, solicitor. Raising the small claims limit could have devastating effects in Kevin Donoghue's opinion.
Kevin Donoghue of Donoghue Solicitors considers the implications of the proposed raise of the small claims limit.

As an Association of Personal Injury Lawyers (‘APIL’) Senior Litigator, who runs an APIL corporate accredited practice, I represent many innocent accident claims victims. I am deeply concerned by the potential impact of the changes.

The government proposals will:

  • Raise the small claims limit from £1,000 to £5,000
  • Change the law by preventing people from claiming compensation for soft tissues injuries (such as “whiplash”) in road traffic accidents.

What is the Small Claims Limit in England and Wales?

The small claims limit is a money value placed on contested civil claims when proceedings are issued at County Court. With accident claims in England and Wales, if the personal injury element is worth less than the current small claims limit of £1,000 the case will usually be assigned to the small claims track. (There are exceptions, e.g., for complex cases, and sometimes claims worth more than £1,000 will get allocated to the small claims track.).

When a case is allocated to the small claims track it means that the Court considers the matter to be of low value and/or straightforward. Either way, in the Court’s opinion, solicitors are not required unless the parties want to pay privately. Consequently very limited costs or expenses are payable. As a result, most people bringing small claims represent themselves as Litigants in Person.

I disagree that personal injury accident claims are suitable for the small claims track. They are complex matters that require expert legal help to identify the issues, prepare evidence, and recover appropriate compensation to put the Claimant in the pre-accident position. Already Litigants in Person are at a huge disadvantage in small claims because Defendants in accident claims are usually insured. Insurers routinely fight small claims using expert solicitors and barristers. As a result, the scales of justice weigh heavily in their favour. More innocent accident victims will lose out if the Government raises the small claims limit.

If implemented these proposals are likely to have devastating consequences for innocent accident claims victims, people involved in the legal profession, and the UK economy. Only insurers and their shareholders will benefit.

It is for these reasons that I have urged both MPs to act. My letters stress the economic impact because, unfortunately, some politicians still believe the insurer-peddled myth of a “compensation culture” and may be reluctant to intervene. (I have written about this bogus idea in the past. Even Conservatives like former Minister Lord Young dismissed it.)

For now though, I’m not interested in a PR battle over mere words. These proposed changes to the small claims limit are so significant for concrete reasons that I hope our politicians stand up and fight. We are all relying on them.

Small Claims Limit Letter

My letter to Louise Ellman MP is reproduced below:

Louise Ellman MP

House of Commons

London

SW1A 0AA

29 January 2016

Dear Mrs Ellman,

Economic Cost of Changes to Personal Injury Compensation Claims

I am writing to you as a solicitor who specialises in compensation claims, a small-business owner, and employer, to urge you to make representations to the Justice Secretary.

I believe that the Government ‘s plan to increase the small claims court limit to £5,000 for people injured through no fault of their own – and to abolish recompense altogether for almost all those who have suffered soft tissue injuries in road accidents, is wrong.

I am sure you have read and heard the insurance lobby and government talk about the (non-existent) “compensation culture” and “fat cat lawyers”. I am not going to waste your time refuting that unsubstantiated nonsense. Instead, I invite you to consider the impact of these proposals from an economic perspective both nationally and locally.

£1Billion+ Cost to HM Treasury

It is estimated by the Access to Justice Action Group (www.accesstojusticeactiongroup.co.uk) that

the Treasury is likely to lose in excess of £1billion from lower recovery of welfare benefits paid to the DWP from successful claims, and loss of VAT, Income Tax and Corporation Tax from the demise of law firms, their suppliers and contractors, as thousands of lawyers and their hard working staff lose their employment and end up on state benefits.

Liverpool will be disproportionately impacted by these proposals. The city is a legal powerhouse with firms of all sizes employing people involved in compensation claims work. Liverpool’s law firms contribute to the local and national economy through taxation, jobs, and spending. It has a thriving support sector of IT, telecommunications, marketing professionals etc. Law firms like mine occupy prime real estate in the city, which encourages development and generates business rates for Liverpool City Council.

The compensation claims legal sector is already struggling. Many firms have gone “to the wall” since the Legal Aid, Sentencing and Punishment of Offenders Act (2012) (“LASPO”) came into force in 2013. The impact of that, and the current proposals, continues to take its toll on firms of all sizes. Last week the AA pulled out of the personal injury claims business. One of the country’s biggest law firms, Slater and Gordon, recently announced redundancies. Closer to home, Water Street-based PCJ Solicitors, which posted a turnover of £5.5million in its 2014 accounts, entered administration on 19 November 2015. The firm will leave unsecured creditors hundreds of thousands of pounds out of pocket.

The Government’s proposals will accelerate the sector’s collapse and threaten the continued existence of many more law firms and support businesses.

The proposals will also affect the budget of the already-stretched court service. Court fee increases have risen dramatically over recent years, particularly in civil litigation, which including personal injury compensation claims. Claimants are often unwilling or unable to pay the fees, leaving their solicitors to cover the costs while litigation progresses. If solicitors are no longer involved to fund court fees the Government will be forced to take money from elsewhere, and/ or close courts leading to more redundancies.

Wider Economic Impact

Whilst a limited increase in the small claims threshold is appropriate (inflation would suggest the correct higher figure would be £2,000), the current proposals will result in injustice to ordinary honest people whilst creating excessive profits for insurance companies; and even more so, if the injured are banned altogether from receiving anything at all for their suffering and losses.

It is estimated that 85% of injured people will be denied legal representation. They will be left alone to face an unfair battle against powerful insurance companies. Most will not even bother; or will be exploited by claims management companies.  Others will accept woefully inadequate offers to avoid the stress of the Small Claims Court.

My own firm is typical in that we help people locally and throughout England and Wales. Compensation recovered by innocent victims directly impacts on the local and national economy through spending on essential items (like medical care and aids) and discretionary spending (e.g. buying a newer car after a road traffic accident). Failing to recover any compensation, or under-settling, will have serious ripple effects in the wider economy.

Insurers’ Profits Soar Amid Broken Promises

The Government say its proposals will reduce “fraud”. However, the evidence does not support this argument; and the Government has already introduced a long series of measures to deal with this anyway.

Savings can only come from denying people the compensation to which they are rightfully entitled. The Government’s proposals will codify this.

The insurers claim savings would be passed on to policy holders. However, they’ve said this many times before (for example, during the discussions about LASPO) – and each time failed to meet their promise. The Government have made clear they will not “police” this, either. Despite the insurers’ promises car insurance premiums have increased 9.2% in the 12 months to the end of September 2015, taking the average cost of a comprehensive policy to £569.

The insurance industry’s own Association of British Insurers (ABI) figures show that their costs of recompensing those hurt by their policy holders have fallen 29% since 2010. The amount paid out annually by motor insurers fell from £8.3 billion to £5.89 billion last year – a decrease of £2.41 billion. Yet savings from this multi-billion pound windfall have not been passed on.

In fact, this huge sum has gone to inflate the insurance industry’s profits instead. For example, Direct Line and Admiral have between them paid out £1.65 billion in dividends in the last three years – equivalent to £221 for each of their policy holders.

Innocent accident victims, the city of Liverpool, and the wider UK economy, should not be made to pay for the Government’s wrong-headed plan.

I would welcome the opportunity of discussing these issues with you.

Yours sincerely

Kevin Donoghue

Solicitor Director

 

 

 

Should I Take a Pre-Medical Offer Whiplash Settlement?

Photo of Hannah Bickley, ACILEx, who explains pre-medical offer whiplash settlements.
Hannah Bickley, ACILEx, explains pre-medical offer whiplash settlements.

By Hannah Bickley, ACILEx

Pre-medical offer whiplash claims are often settled quickly and, for the insurers, cheaply. But should you accept a pre-medical offer or reject it and pursue full compensation? Here’s my view.

How Pre-Medical Offer Whiplash Claims Work

My colleague Daniel Fitzsimmons has discussed how a pre-medical offer works in an earlier blog post. He’s right to point out that it’s usually a mistake to accept a pre-medical offer, especially in claims involving “whiplash” injuries where the innocent claimant suffers neck and/ or back strain in road accidents.

This is because personal injury claims are as varied as the people who make them.

Despite this, insurers have woken up to the fact that some people are willing to settle their claims at a substantial discount in return for a quick settlement. They usually offer a fixed amount, which wrongly suggests that all whiplash claims are the same. The saying “a bird in the hand is worth two in the bush” springs to mind, especially if you choose to settle your claim without a medical report.

But should you take their low-ball offer? As my client David Hoang found out, with only a small amount of extra time and effort the claimant who rejects a pre-medical offer whiplash settlement can be properly compensated.

Car Accident Whiplash Claim

David Hoang (details used with permission) is a 29-year old office worker. In April this year he was driving to a restaurant. On his way he saw an ambulance approaching with its lights flashing. He pulled over onto the kerb to let the ambulance pass. Suddenly another car came round the corner and hit Mr. Hoang’s car in the rear.

Thankfully the other driver behaved responsibly, stopped at the scene, and accepted the blame.

David’s car was written off in the crash and dealt with by his own insurers. But he suffered whiplash to the neck and went to a walk in centre for attention.

He came in to our offices to see me and we started the claim.

As I am required to do, I submitted Mr. Hoang’s claim via the personal injury claims portal.

Within a week the responsible driver’s insurers admitted blame and made a pre-medical offer of £1200 for everything, including whiplash and out-of-pocket expenses.

Mr. Hoang considered the offer, and the speed he received it, but rejected it on my advice.

I advised him that without a proper medical expert assessment, there was no way of knowing if this offer was acceptable. By taking “the bird in the hand” he may under-settling his claim and losing out significantly.

We discussed the procedure to correctly value his claim. I explained that he would have to be medically examined, but that this would not take long and could be arranged close to home. We would also need to correctly prepare his claim for injuries and other expenses, and he would need to keep in touch while I prepared his claim and negotiated on his behalf.

While this would also take some time, he agreed with me that this small amount of inconvenience was potentially worth it. He was entitled by law to full and proper compensation. Now I had to deliver.

Tweet: Insurers make low-ball pre-medical offers in #whiplash claims. Reject them to get proper compensation. http://ctt.ec/9Avm6+

 

Benefit of Rejecting a Pre-Medical Offer

I arranged for an expert doctor who specialises in musculoskeletal medicine to examine Mr. Hoang. The appointment took place only five miles from his home.

The doctor’s report confirmed that David had suffered a neck injury which he anticipated would take 8-12 months to recover. He also suffered from travel anxiety which would go away over roughly the same period.

As well as his personal injury claim David had a modest (£7.50) claim for out-of-pocket expenses.

Once Mr. Hoang had approved the medical report and claim for expenses I submitted the evidence to the insurers with my offer to settle.

I kept in touch with David throughout and advised him at every stage. Although he lives locally, we used email and phone calls most of the time.

Negotiations took six weeks, during which time I made the insurers come up from their pre-medical offer of £1200 to £2457.50, more than double the original offer.

Mr. Hoang’s claim took just over 5 months start to finish. Do you think it was worth his while to reject the pre-medical offer whiplash settlement and seek full compensation?

I do. The numbers speak for themselves.

P.S. Thanks!

I’m glad I was able to get David the compensation he rightly deserved. He was very happy and sent a beautiful gift box full of goodies to the office with a very kind note. Here I am planning what to enjoy next:

 

Photo of Hannah Bickley with a gift box from a grateful client following settlement of his accident claim.
Hannah Bickley with a gift box from a grateful client following settlement of his accident claim.

Although I was just doing my job, it’s always nice to be appreciated. Thank you David!

 

Hannah Bickley is a GCILEx litigation executive at Donoghue Solicitors. She specialises in accident claims. Instruct her by completing the online form on this page or call 0151 236 1336.

 

5 Reasons Why We Don’t Pay a Staff Bonus

Photo of Kevin Donoghue, solicitor, who explains why Donoghue Solicitors doesn't pay staff bonuses.
Kevin Donoghue, solicitor, explains why Donoghue Solicitors doesn’t pay staff bonuses in this article.

By Kevin Donoghue, Solicitor Director of Donoghue Solicitors

I’m proud that, at Donoghue Solicitors, we do things a little differently.

It may be uncomfortable to hear, but like every other law firm, we are in business, not charity. Even though we spend a lot of time and money giving back to our community, being professional means that we often have to make commercial decisions.

We’re not being selfish.

Our regulator, the Solicitors Regulation Authority, demands that we run our business properly.

Rule 8 of the 10 mandatory SRA Principles says that all solicitors must:

run your business or carry out your role in the business effectively and in accordance with proper governance and sound financial and risk management principles

As a solicitor and member of the wider legal community, I approve of this. It does no one any good to see law firms go out of business, especially clients.

But it is possible to run a commercial outfit and still put clients first. This view led me to think early on about how I would recruit and incentivise staff. This matters because without good quality, motivated people working for the firm it would soon cease to exist.

I trained to become a solicitor at a nationwide firm. Coming from a place where people are spread out and often have little to do with each other, I knew that I wanted to keep things small. It was, and remains, important to me that we focus on building long-lasting relationships with clients and staff. One way to do this was to recruit and pay people based on both their technical abilities and client care skills.

With this in mind, I decided to buck the trend of many law firms and pay my staff a salary without a performance-related bonus. Here’s why.

Staff Bonus Structures

Often law firms, particularly in the accident claims sector, pay “fee-earning” staff (solicitors, legal executives, and paralegals) a low salary which they can then supplement with a performance-related bonus. Solicitor’s firms have different ways of doing this, but they are all target-based.

  • Some pay bonuses on hours billed;
  • some on fees received;
  • others on cases opened or closed.
  • Some firms pay a bonus on annual performance;
  • some on monthly performance.
  • Some are individual based;
  • some department based;
  • others use complicated combinations of the above.

There are five consequences, all of them negative in my opinion, of paying staff performance-related bonuses in solicitor’s firms:

  1. The client suffers. This was the most important point for me when I decided against paying my staff a bonus. For clients, there are five main problems:
  • When deciding whether to take on a new client, lawyers could refuse to take cases which, on their face, are not guaranteed winners but might have arguable prospects. From the bonus driven fee-earner’s point of view, why should they invest time and risk their bonus on a case that might not win? This situation could result in genuine claimants being denied access to justice. (N.B. This is not the same as the reasons for declining a case on a “no win no fee” basis, which I have written about here.)
  • Harassed lawyers chasing bonuses might not have the time for proper client care, resulting in dissatisfied clients and poor instructions, which could result in things being missed, the claim being under-settled, and/or the client having to make a complaint.
  • Those same solicitors or other lawyers might leave the firm if they feel that the bonus system is unfair. They would be replaced by someone new, who has to spend time getting to know the client and the case. This is time-consuming, frustrating, and worrying for the client.
  • If the case is transferred from a lawyer who has left the firm, the client could be refused representation by another over-worked but appropriately skilled fee earner because they don’t have the time to invest in inheriting a former colleague’s case, or they think it doesn’t have good prospects of success. This might result in someone less qualified or able taking the case, which is a problem for the client, the lawyer, and the firm.
  • Finally from the client’s point of view, pressure on fee-earners to bill monthly or annually could result in a case being under-settled just to hit a bonus target. As a result, the client might get compensated sooner but they could lose out on the full amount of compensation they deserve. This could result in a professional negligence claim.
  1. It creates a “me first” culture. Lawyers may be reluctant to help their colleagues with cases, court hearings, meetings etc. as this takes away from their own time and bonuses. And, at the year-end, the person who received the help may get a bigger bonus and greater recognition for the following year, leading to resentment and jealousy. It also creates a toxic atmosphere at work which results in higher staff turnover, which as I mentioned above is bad for both the clients who have to work with another lawyer and the firm which has to replace them.
  1. Fee-earners can refuse to “share” clients with each other and across departments for fear of losing that client to a competitor within the firm. This helps no one, not least the poor client who could be missing out on quality representation and then has to go through the hassle of finding another solicitor elsewhere. Lawyers may also refuse to share contacts and potential referrers of work, leading to lost clients to other firms.
  1. Solicitors and other lawyers often spend time brainstorming ideas and cases to maximise their prospects of success. The law is a knowledge-based job, and knowledge is best shared. But bonuses create a culture of jealousy which limits sharing of ideas. This could lead to clients losing their cases, and making complaints and/or claims against the firm.
  1. Bonuses are difficult and time-consuming to manage. I attended a management course a while ago where a managing partner who had inherited a firm which had a bonus system said that, despite radically changing it, they still had to spend time refining it every year. They are a waste of everyone’s precious time and resources, which could be better spent helping the client (see point 1) and each other.

An Alternative to Staff Bonuses

Given all the problems with performance-related bonuses I have described it is a wonder to me that anyone uses them at all. Instead of this dysfunctional system, I decided when setting up the firm to make the client the focus of staff performance, not the bonus a lawyer could potentially take home. That way we all benefit when a client succeeds in their case, when we learn something which we share (staff training is continuous and thorough), and when we grow as a firm.

For example, my colleague Daniel Fitzsimmons recently settled a case for Mr. AN. A minibus driver knocked Mr. N off his bike. AN suffered personal injuries, property damage, and other losses. Daniel worked with Mr. N, me, and (trainee legal executive) Hannah Bickley to make sure that:

  • AN’s case was properly and fully detailed;
  • he got complete and accurate medical evidence from the right specialists; and
  • he was put in the position he would have been in if the accident didn’t happen. (This is the purpose of tort law in personal injury accident claims.)

Cases like this are all about teamwork, and Mr. Fitzsimmons treated AN as a member of the team. He involved him in decisions and took the time to discuss matters, demonstrating excellent “client care”. When it came time to settle, Dan negotiated hard and kept pushing for more when other lawyers on performance-related bonuses may have settled early to hit their targets.

Daniel recovered £4,600 for AN plus his legal costs, which was an excellent settlement. We’re proud of the job we did. AN was happy too. He was a helpful and co-operative client and has become a friend of the firm.

Photo of Daniel Fitzsimmons, a Chartered Legal Executive who works at Donoghue Solicitors.
Daniel Fitzsimmons a Chartered Legal Executive who works at Donoghue Solicitors.

Benefits

From a management point of view not dealing with bonuses (or the office politics they create) means that I get to spend more of my time

  • winning cases for my clients as I am a practising solicitor as well as the Director of the firm,
  • managing the firm’s growth, and
  • ensuring that we are progressing as a group.

I am proud of the fact that, since I started Donoghue Solicitors over four years ago, we have never lost a member of staff. Our clients and contacts know us all well and we have satisfying, long-lasting relationships.

And because we don’t pay performance-related bonuses we can invest more time in looking after our clients and getting on with the serious business of helping them win their compensation claims, which is what we’re here for after all.

 

If you want help with your compensation claims (actions against the police, accident claims, or professional negligence) contact us via the form on this page or call 08000 124 246.

 

 

Is the SARAH Bill an abuse of Parliament’s Powers?

Photo of Kevin Donoghue, solicitor, who considers the SARAH Bill.
Kevin Donoghue, solicitor, considers the SARAH Bill.

By Kevin Donoghue, solicitor

On the eve of Guy Fawkes Night it was fitting that the government showed that it was capable of blowing up respect for Parliament’s legislative powers.

On 4th November, the Social Action, Responsibility and Heroism Bill (also known as the “SARAH Bill”) received its second reading in the House of Lords.

The government wants the SARAH Bill to “make provision as to matters to which a court must have regard in determining a claim in negligence or breach of statutory duty”.

It is remarkably short, at just over 300 words. If you had a homework assignment to draft a bill and came up with it you’d get an incomplete.

During the debate Lord Faulks, the Conservative Minister responsible for promoting the Bill in the House of Lords, explained that the purpose of the Bill is to encourage volunteering and public spirit. If passed, it would give reassurance to people who are sued that the courts will recognise the context in which they acted.

He said the Bill was broadly drafted to apply to a range of situations and “bodies such as small businesses, volunteering organisations, religious groups and social clubs, as well as to individuals.”

Lord Lloyd of Berwick said that the Bill was unnecessary. He questioned if its true purpose was to send a message to the Courts instead of making new law. If so, that is not a proper use of Parliament’s legislative powers and it should not allow the Bill to become an Act of Parliament.

Was he right? Let’s look at the clauses in turn:

1. When this Act applies

This Act applies when a court, in considering a claim that a person was negligent or in breach of statutory duty, is determining the steps that the person was required to take to meet a standard of care.

The Bill deals with the consequences of compensation claims, which usually include personal injuries. They are based in either negligence, breach of statutory duty, or both.

Negligence is proven when a claimant can show that:

  • a defendant owed him/ her a duty;
  • the defendant breached that duty;
  • the claimant suffered loss; and
  • the loss was reasonably foreseeable by the defendant.

Statutory duties, where Parliament enacts laws to extend common law, include strict liability cases.

Before 2013 strict liability laws protected people in accidents at work because defendants could automatically be found liable without claimants having to prove negligence.

But in 2013 Parliament passed the Enterprise and Regulatory Reform Act, removing strict liability from most work accident cases. Now claimants must meet the (harder to prove) negligence standard of care.

As a result of both common and statutory law, the courts are already required to consider the steps taken to meet the required standard of care, so there’s nothing new in Clause 1 of the Bill.

2. Social action

The court must have regard to whether the alleged negligence or breach of statutory duty occurred when the person was acting for the benefit of society or any of its members.

This clause is also already well covered in both statutory and common law.

In 2003 Lord Hoffman said that the courts must consider the “social value of the activity which gives rise to the risk” in the House of Lords judgment of Tomlinson v Congleton Borough Council.

Despite this guidance binding on all courts which deal with compensation claims, in 2006 the government brought in the Compensation Act. This Act merely confirmed the common law approach stated by Lord Hoffman when it said:

Part 1 Standard of care

1 Deterrent effect of potential liability

A court considering a claim in negligence or breach of statutory duty may, in determining whether the defendant should have taken particular steps to meet a standard of care (whether by taking precautions against a risk or otherwise), have regard to whether a requirement to take those steps might—

(a)prevent a desirable activity from being undertaken at all, to a particular extent or in a particular way, or

(b)discourage persons from undertaking functions in connection with a desirable activity.

In the debate Lord Faulks tried to justify Clause 2 of the SARAH Bill. He said that replacing the “may” consider clause in the Compensation Act with the “must” consider clause in the SARAH Bill is a significant change.

It isn’t.

Lord Hoffman’s ruling established the current law. Neither the Compensation Act nor the SARAH Bill adds anything.

Moving on, “acting for the benefit of society or any of its members” is the kind of woolly phrase which only a non-lawyer like Chris Grayling, our current Lord Chancellor, could approve.

Can’t it be argued that we all act for society’s benefit, even if for purely selfish reasons?

Compare factory owners and Cub Scout leaders, both of whom benefit if this Bill becomes an Act.

A factory owner could just as easily take advantage of this phrase when making employees work without proper protective gear. Employers like factory owners keep people in work, pay taxes, support their communities etc. and benefit society that way. Cub Scout leaders help children grow as people. Who is to say which benefits society more?

If left in, defendants (or more accurately, their insurers) will abuse this unnecessary clause.

3 Responsibility

The court must have regard to whether the person, in carrying out the activity in the course of which the alleged negligence or breach of statutory duty occurred, demonstrated a generally responsible approach towards protecting the safety or other interests of others.

Here’s another Grayling phrase: “generally responsible approach”. What’s that? On what legal standard is it based? It’s an entirely new phrase with no legal precedent.

If introduced it will lead to expensive litigation and wasted court time while the courts, claimants, and their lawyers, try to make sense of it.

Right now all volunteering groups, businesses (small or otherwise), clubs etc. must put standards and procedures in place which have developed over years of common law and government made statutes.

To give them a new defence based on made-up language would undermine all that.

4 Heroism

The court must have regard to whether the alleged negligence or breach of statutory duty occurred when the person was acting heroically by intervening in an emergency to assist an individual in danger and without regard to the person’s own safety or other interests.

And there’s more: the court has to consider if “the person was acting heroically”.

What’s that? Not all heroic acts are dramatic.

In 1955 Rosa Parks refused to move to another seat on a bus and helped end racial inequality in America.  Nelson Mandela spent 27 years in jail and contributed to the end of Apartheid.

Both would undoubtedly be considered heroes, but, applying the wording of this clause, were they “acting heroically”? Arguably not; as there was no “emergency” or “danger”.

And this clause is potentially life-threatening for our emergency services, as it requires the court to apply the “heroism” clause only when it decides that someone was acting “without regard to the person’s own safety or other interests”.

It worries the fire service as they think  it will encourage people to go into burning buildings to try to save someone, only to need rescuing themselves.

Guidance from St John Ambulance and others stresses that you should make sure you never put yourself at risk. This clause undermines them all.

Lord Lloyd was right. There is nothing new in this ill-considered and unnecessary Bill.

 “Silly” SARAH Bill

Unsurprisingly, both Houses of Parliament had a field day with the SARAH Bill.

Even Conservatives criticised it, calling it “silly” and “utter tosh”.

So why bother?

As always, it comes down to money.

The Conservatives have been in hock to the insurance companies for years. The Guardian found that they had contributed £4.9 million to the Tories between 2005-2011.

Worse still, Lord Chancellor Chris Grayling received £71,000 from the founder of Direct Line Insurance to run his office when he was a lowly shadow home secretary.

This modest investment in our leaders is a bargain when you consider the breakneck pace of reforms to the legal sector, and in particular compensation claims:

  1. the Legal Aid, Sentencing and Punishment of Offenders Act 2012 greatly affected the rights of innocent accident victims by removing their right to recover fees and expenses from the person responsible. Bar Council Chairman Nicholas Lavender QC claimed in a speech on Saturday 8 November that this Act has denied access to justice for 400,000 people in the last year alone.
  2. the Enterprise and Regulatory Reform Act 2103 removed strict liability from health and safety regulations, making it harder for people to claim compensation after accidents at work; and now
  3. the SARAH Bill 2014, which, Lord Faulks freely admits, is designed to help “small businesses” and others (i.e. their insurers) fight claims. As he said in the House of Lords debate about Clause 3:

“It cannot be fair that such people feel pressured to settle speculative and dubious claims. So as well as giving that reassurance, we hope that this provision will give them greater confidence in resisting such claims and indeed—this is important—will help to deter such claims being brought at all.”

Solution

As I have shown, the SARAH Bill is a pointless waste of Parliament’s time. Rather than help heroes and volunteers, its true purpose is to:

  • help the Conservatives cosy up to their insurance company paymasters;
  • increase insurance company profits; and
  • deny the rights of innocent accident victims.

Unfortunately, Lord Lloyd withdrew his amendment to have the Bill killed at the second reading stage. It will now be considered on 18 November at a House of Lords Committee.

My suggestion: use it as kindling for a bonfire.

Only then will the government and their insurance company backers know that their cynical abuse of Parliament’s legislative powers failed.

 

If you have had an accident at work and want to claim compensation, call me on 0151 933 1474 or get in touch through my firm’s website.

 

 Thursday 13 November 2014 Update:

Labour MP Paul Flynn recently filed an Early Day Motion for a debate to “drop this lamentable headline-seeking example of crude populism.”

And in Parliament on Tuesday, Justice minister Shailesh Vara confirmed that:

The Bill will send a powerful message to the public that if they are acting selflessly in an emergency to help somebody in danger and something goes wrong, the courts will always consider the context of their actions if they are sued in negligence or for breach of statutory duty.” (my emphasis)

Lord Lloyd was right. The government blatantly state that the purpose of the Bill is to send a message, not to legislate. That is an improper use of Parliament’s powers. The government should withdraw this Bill immediately.

 

 

 

 

 

 

 

 

How Co-operating Helps You Win Your Compensation Claim

 

Photo of Daniel Fitzsimmons who specialises in compensation claims.
Daniel Fitzsimmons specialises in compensation claims.

By Daniel Fitzsimmons

My daughter, Olivia, loves watching old episodes of “Sesame Street” on YouTube.

I grew up with the show and, as a parent, appreciate the way the writers combined education and entertainment. Recently we watched a song about co-operation. Enjoy it here.

As the song says, “sometimes there is a job so big, if we want to get it done, we’ve got to bring those birds together and all work as one, and that’s co-operation…”.

In compensation claims I couldn’t agree more.

After the merits of the case, co-operation between legal team and client is the most important factor in winning your compensation claim.

Without it, you might lose your claim completely due to missing court deadlines or failing to get crucial evidence.

Even if you co-operate half-heartedly your claim will take longer, be harder to win, and might be worth less.

For me, winning a compensation claim is as much about being a project manager as it is about legal skills.

I need to assemble and manage a team including experts, barristers, witnesses, my colleagues, and, most importantly, my client.

Only when we all work together can we achieve a successful result.

Compensation Claim Management

An example of co-operation in practice is my client Alan N’s case. Alan received £3,600 for his compensation claim. His claim might have failed if we hadn’t worked together so well.

Alan, a newly qualified pharmacist, was riding his bike to work when he was hit by a van. He suffered various injuries, including cuts and bruises to his elbows and right knee and a puncture wound to his left thigh.

As well as his personal injuries he lost earnings and damaged his bike.

Alan instructed me to pursue his bike accident compensation claim against the van driver. Alan told me that he was on the major road when the van pulled out of a side road and hit him.

I agreed to take Alan’s claim on a “no win no fee” basis. I found the van driver’s insurers with help from the DVLA and sent them details of Alan’s compensation claim.

The insurers failed to admit liability so, at this point, we had a choice to make.

Fight on, all the way to trial if necessary, or abandon the compensation claim.

I explained to Alan that, despite what people tell you, there are no guarantees of success with compensation claims. If you go to trial the other side’s lawyer is equally confident. If they weren’t they would settle before court.

It was a risk he was willing to take.

Compensation Claim Preparation

Alan was sure he was in the right and I agreed, so I put a team together to issue proceedings.

To prepare Alan’s case I asked him to be a willing member of the team. Alan understood this and played his part. He:

  • responded promptly to my phone calls, emails, and letters;
  • provided information quickly so that I could preserve crucial evidence to prove liability;
  • attended a medical appointment on time and gave clear evidence for the doctor’s report;
  • gave a site inspector information to prepare a report to help show that his version of events was correct; and
  • met with me at his home and our offices so I could progress his compensation claim. This involved preparing schedules of losses, court pleadings, witness statements, and other items essential for court proceedings.

The experts I instructed helped by keeping appointments and providing usable reports on time.

And my colleagues at Donoghue Solicitors ensured that I was able to reply to every phone call, letter, and email, and provided me with advice and support when I took the important decision to back Alan’s case.

Court Proceedings for Compensation

After I issued court proceedings the driver’s insurers filed a defence.

They said the accident was not their driver’s fault. They claimed Alan was cycling on the wrong side of the road and he crashed into the van, not the other way round.

As his claim proceeded towards trial we spoke and met regularly to review:

  • the defence;
  • evidence both sides intended to produce at court; and
  • witness statements.

Alan agreed to free up his diary and booked time off work to give evidence at court.

Fortunately, less than two months before trial I was able to use the evidence we had prepared to convince the van driver’s insurers to admit blame. I then negotiated settlement of Alan’s compensation claim.

When I entered into negotiations it was important that I had his co-operation to keep the pressure on. We were in constant touch by email and phone.

By working together to settle his claim Alan received more than double the amount he would have recovered if we took our chances at court.

Compensation Claim Team

By readily co-operating Alan received excellent compensation and ensured that the claim process was a good experience.

It was also a powerful motivator for the rest of the team.

The group I assembled worked well with Alan’s help. We were all committed to the goal of helping him recover the most compensation possible.

This joint effort and expert help ensured that I could present Alan’s case in the best possible way, and at the right time, so that his prospects of success and compensation were greatly increased.

Without this level of communication and co-operation Alan’s case would not have progressed as quickly or as well, if at all.

That’s well worth remembering when dealing with your own compensation claim.

 

For help with your compensation claim, contact me on 0151 933 1474 or through the Donoghue Solicitors website. I am an accredited “Litigator” practitioner member in the Association of Personal Injury Lawyers.

 

 

Why won’t a solicitor take my no win no fee claim?

Photo of Kevin Donoghue, Solicitor, explains why a solicitor won't take a no win no fee claim.
Kevin Donoghue, Solicitor, explains why a solicitor won’t take a no win no fee claim.

By Kevin Donoghue, solicitor

You’ve decided to claim compensation, researched which solicitors’ firm to use, and got in touch with a lawyer.

But the solicitor you contact says they won’t represent you, even using a conditional fee agreement (also known as ‘no win no fee’) agreement.

If you’re in this position and find yourself asking “why won’t a solicitor take my no win no fee claim?” let me give some insight.

Funding Options, including No Win No Fee Funding

Funding for legal cases is something which all solicitors are under a legal duty to consider with their clients at the outset.

As you may know if you’ve read our page about how much it costs to make a police compensation claim, the page on our site about no win no fee accident claims, or the professional negligence no win no fee section of our website, we try to be clear and straightforward in our explanations of the various funding options available. These include:

  • legal aid;
  • paying for your case privately;
  • using before the event or union funding; and lastly
  • no win no fee agreements.

That way you know what to expect when you speak to us, or any other solicitor, about your claim.

Talking about how your case will be funded is important because starting a compensation claim (especially on a no win no fee basis) is a big decision, not least because of costs.

Prospects of Success and Costs

Unfortunately, there is never one simple explanation to answer the question “why won’t a solicitor take my no win no fee claim?”, but some common reasons are:

1.      The solicitor who reviewed your case is not confident it will succeed.

This is the most important reason, as solicitors only take cases on if they are confident that there is a reasonable prospect of winning.

It applies regardless of the method of funding used, even with private clients who pay their own legal fees, legal aid, and union- backed cases.

For a solicitor to:

they must have absolute confidence in the client, their case, witnesses, evidence, and many other things.

Solicitors want happy clients who win. Getting the maximum compensation for clients to help them get their lives back on track is what gets lawyers like me out of bed in the morning.

Losing benefits no one, especially the client, who will have wasted their time and effort in claiming compensation.

So the reasons for declining to act, especially on a no win no fee basis, are not purely selfish.

Of course, solicitors want to be paid for the work they do. (Law firms are not charities; they are businesses. In business, who doesn’t want to earn money?)

And losing a no win no fee case means that the solicitor would not get paid their own costs, which can run into the tens of thousands of pounds and put strain on the firm’s finances.

But there’s more to it than that.

Solicitors are under a duty to act in the best interests of their clients, who are called “claimants” in civil compensation claims.

And changes in the rules which came into force on 1 April 2013 mean that taking a legal case is now a more risky proposition for claimants.

Why?

Because the Legal Aid, Sentencing and Punishment of Offenders Act (2012) abolished the right of innocent claimants to recover “success fees” and after the event insurance from the losing defendant, or more usually, the defendant’s insurance company.

Success fees uplift the claimant’s solicitors’ fees to compensate for:

  • the risk of taking the case and losing; and
  • delaying payment.

After the Event insurance provides protection for the claimant’s own expenses, such as court and experts’ fees (called “disbursements”), barrister’s fees if necessary, and the other side’s costs.

Being able to recover success fees and after the event insurance from the losing defendant (or their insurers) meant that, before April 2013, the winning claimant would usually receive 100% of their compensation.

(This is why people commonly think of “no win no fee” as free legal representation, when in fact the term means that if you win, there is a fee. It’s just that, before 1 April 2013, that success fee was paid by the losing defendant and not the successful claimant.)

The system in place before April 2013 ensured that the winning claimant’s solicitor could get paid a fair rate (legal costs plus a success fee).

And the after the event insurance protection meant that, if the claimant lost their case, they would still be able to walk away “scot-free” as their solicitor would honour the no win no fee agreement and waive his or her fees, and the insurance would pay for the rest of the claimant’s expenses and the defendant’s costs.

But, since 1 April 2013, if the claimant loses they are only protected for their own solicitor’s fees (under the no win no fee agreement) unless “qualified one way costs shifting” applies. Now they have to pay for their own disbursements, barrister’s fees (unless also working under a “no win no fee” agreement), and the defendant’s costs out of their own pockets unless they can get after the event insurance and agree to pay for it out of their damages (if they win).

Since 2013 the market for after the event insurance has shrunk considerably, so that it is very difficult to get in some areas of law, such as actions against the police.

Without it, taking a case to court and losing could cost the innocent claimant thousands of pounds. Defendants and their insurers don’t instruct cheap lawyers and experts, court fees for running a case to trial alone can exceed £2000, and if you need an expert or two to prove your claim (most cases do), then you are responsible for their costs too. (Experts can’t work on a “no win no fee” basis because their duty to give an impartial opinion means they can’t be influenced to find in either side’s favour by the risk of not getting paid.)

Imagine taking a case to court, losing, and being left with a judgment debt for thousands against your name? You would have to find the money to pay the debt and deal with the impact on your credit score. All because you wanted to make a compensation claim.

For this reason alone, being told that your solicitor will not take your claim on a no win no fee basis, as a private client, or any other way, can be a good thing.

2.      Your claim is of low-value

The small-claims limit, below which legal fees are not paid, is £1,000 in personal injury cases, and £10,000 otherwise.

In principle, this means that most personal injury cases would be eligible for costs if successful.

But not all.

Minor injuries, limited psychological upset claims, and cases where the claimant makes a quick recovery, can mean that costs will not be paid even if the claimant is successful.

As a result, the claimant’s own solicitor’s fees and disbursements would have to be paid out of their damages. In practice, this means that the claimant would be left with nothing.

In other cases where personal injury is not claimed, such as many data protection breach claims, even recovering £9,999 would mean that costs do not have to be paid. Again, the winning claimant could end up with nothing once his or her own legal fees, disbursements, etc. have been met.

Going back to the discussion on After the Event insurance, even if the claimant is willing to pay for the insurance out of their own pockets, the fees can be extremely high, and often more than the total compensation the innocent claimant might expect to recover. So, in the event that the claimant succeeds in their claim, they might end up paying all of their damages over to their own insurer before also having to pay out of their own pockets for court fees, experts’ fees etc.

And that’s before paying the 25% success fee (or more with some firms, not Donoghue Solicitors) to their own solicitor.

With that in mind, why bother claiming at all?

This assessment is known as “the costs/ benefit analysis” and is part of the solicitor’s job of ensuring that they act in the best interest of the client.

Winning, but being left with nothing but debt, is clearly not in their best interests.

3.      Pressure of work

Solicitors are the most heavily regulated professionals in England and Wales. More than doctors. More than accountants. More than anyone.

The hoops they have to jump through to satisfy:

  • the Solicitors Regulation Authority;
  • their professional indemnity insurers ;
  • the Legal Ombudsman;
  • the Information Commissioner’s Office;
  • the Courts (solicitors are Officers of the Court, unlike barristers, and have specific duties to perform there); and
  • many others

mean that running cases is just one part of the job.

Failure to keep the governing bodies happy can result in serious consequences, including being struck off the roll of solicitors, having to close the firm, and bankruptcy.

It is no surprise then that many solicitors will limit the amount of clients they take, even if those people have potentially good claims, because they do not want to risk failing in their duties to their existing clients, governing bodies, staff, creditors, and others.

4.      Personality Issues

Making a compensation claim can be an uncertain business. When clients ask me “how long will it take?” the answer is always: it depends.

It depends on:

  • how much co-operation I receive from my client;
  • how quickly I receive the information I need to decide what to claim for, if at all;
  • if we have funding issues to deal with;
  • how quickly the defendant responds to the claim, if at all;
  • if the defendant fights the claim, and why;
  • if there are witnesses to track down and interview;
  • if we have to issue proceedings to force the defendant to produce evidence;
  • if we have to issue full court proceedings to take the case to trial;
  • if there are settlement negotiations;
  • what court delays we experience;
  • if we go to trial, and if a jury is involved; and
  • if we get paid, and when.

With all this in mind, compensation claims can take anywhere from a few months to many years. It is not uncommon for cases to take two to three years to reach trial.

Having a good working relationship between the solicitor and the client during the time a case is running is vital.

People work best with people they like.

It is for this reason that clients should make sure they have a good fit with a solicitor they like and trust before agreeing to start the relationship. After all, the solicitor will be making demands on their client’s time, resources, and potentially finances.

Solicitors think about whether the client is a good fit too. We can’t win cases on our own. We need our clients’ full, helpful co-operation.  And smart clients know that the solicitor needs to be left alone to do his or her job, that’s what the client is paying for after all. Constant emails, phone calls, and other interruptions not only increase the bill but result in a strained relationship, which is bad for both the lawyer and the client.

What to do if a solicitor won’t take your case on a no win no fee basis

Solicitors are generally free to decline to represent whoever they like. They don’t have to give reasons or enter discussions about why, but the reasons are likely to involve some or all of the issues above.

If the solicitor you approached won’t take your case there is nothing to stop you enquiring with another lawyer. There are over 140,000 solicitors practising in England and Wales so there are plenty of options.  The Law Society’s find a solicitor service is a good place to start.

 

Kevin Donoghue is the Solicitor Director of Donoghue Solicitors, a specialist law firm dealing with compensation claims against the police, personal injury accident claims, and professional negligence claims.

 

 

 

 

 

Why taking a pre-medical offer could be an expensive mistake

Accepting a pre-medical offer could be a costly financial mistake. Daniel Fitzsimmons of Donoghue Solicitors explains why.

Photo of Daniel Fitzsimmons, Trainee Legal Executive at Donoghue Solicitors.

I recently represented a client from Birmingham who had been injured in a road traffic accident. After medical examination and negotiations with the other driver’s insurers, I settled her claim for more than three times the original offer.  What makes this claim interesting is that it highlights the dangers of accepting a ‘pre-medical offer’.

Pre-Medical Offer Definition

What is a ‘pre-medical offer’ and why should you care?

Pre-medical offers are proposals to pay compensation before the injured person has been seen by a medical expert. They are made by insurance companies in personal injury accident claims.

The practice of making a pre-medical offer in personal injury claims is described in the Association of British Insurers’ (‘ABI’) voluntary Code of Conduct. (The ABI is the trade body of insurance companies in the UK. It represents 300 member companies who cover 90% of the insurance market.) Their Code of Practice when approaching accident victims direct (where pre-medical offers are often made) states:

Offers on low value injuries

Where the injury is low value, i.e. typically only a few days in duration, insurers may offer to settle a claim without medical evidence.

The purpose of a pre-medical offer is to encourage early settlement of the claim. The insurer gets the claim off their books for a set amount; the injured person gets compensation quickly without a medical examination.

Sounds too good to be true doesn’t it?

It is.

As my client Mrs. B’s case shows, accepting a pre-medical offer could be a very expensive mistake.

Road Accident Compensation Claim

Mrs. B, a retired 68-year-old woman, was in her friend’s stationary car when another driver reversed into it. Although she was injured in the road accident, she got out of the car when she realised that the other driver was leaving. The responsible driver nearly ran Mrs. B over to make her escape. The police were called and details obtained.

Mrs. B received medical treatment for her injuries and contacted me a few days later to make an accident compensation claim.

I took full details and agreed to represent her on a ‘no win no fee’ basis.

After checking the information provided, including asking about her injuries as they were known at the time, I sent the claim to the responsible insurers and began preparing her case for court proceedings.

Just under two months after the accident I received a letter from the other driver’s insurers. They helpfully admitted liability, but also made a pre-medical offer to settle Mrs. B’s claim for £1,000 plus legal fees, based on the information I had provided some time earlier.

When I told Mrs. B about the pre-medical offer she said that she was still suffering as a result of the accident, so I recommended that we reject the offer and get an expert medical opinion. She agreed.

Following Mrs. B’s medical examination, the doctor noted that my client had many other health problems including cancer, osteoarthritis, and diabetes. He confirmed that she had suffered a cervical sprain to her neck, more commonly known as ‘whiplash’. In his expert opinion, the injuries she suffered in the road accident would take two years to recover.

As well as her personal injuries, I claimed compensation for extra care and help provided by family members, medication, travel to and from her doctors, and other things.

After negotiations, I settled Mrs. B’s passenger accident claims for £3,303, more than three times the pre-medical offer.

It took an extra four months to go through this process, but Mrs. B was very happy with the settlement and felt that the time was well spent.

If she had accepted the insurer’s pre-medical offer, she would have missed out on £2,303 compensation.

How to Beat a Pre-Medical Offer

Mrs. B’s case is not unique. I routinely come across similar cases where the insurers for the responsible person make a low pre-medical offer.

And these offers are not just in road accidents. Any personal injury claim can be dealt with this way, including accidents at work, or tripping/ slipping claims.

But is it right?

Again, referring to the ABI’s Code, it specifically says (emphasis added):

Offers and Settlements 

General Policy

All offers should be fair and reasonable and based on appropriate evidence.

This is impossible without medical evidence.

Where no medical evidence has been obtained, how would anyone, let alone an unqualified insurance company representative, know what a ‘fair and reasonable’ offer should be?

Also, Mrs. B’s case shows how the insurers can ignore their own Code of Conduct when it suits them.

In her case the responsible driver’s insurers ignored both the ‘general policy’, and the guidance on ‘offers on low value injuries’. They made a very low pre-medical offer which was not:

  • ‘fair and reasonable’;
  • ‘based on appropriate evidence’; or
  • for an injury of ‘only of a few days in duration’.

Unsurprisingly, insurers try to settle claims for less than they are worth. That’s their job, as they represent the interests of the responsible party and their shareholders.

Make no mistake: by making pre-medical offers they are looking after themselves, not the accident victim.

The only way to deal with a pre-medical offer and get the right amount of compensation for the injured person is to prove their personal injury claims to the standard required at court. This means:

  • obtaining medical evidence by a qualified doctor;
  • who is instructed by an independent firm of solicitors;
  • who represent the interests of the injured person, not the responsible party.

It may take longer, but as Mrs. B’s case shows, it’s worth it to avoid making a mistake that could cost thousands of pounds.

 

+Daniel Fitzsimmons is an accredited ‘Litigator’ practitioner member of the Association of Personal Injury Lawyers. Contact him for help with your accident claim on 0151 933 1474 or by completing the form on the Donoghue Solicitors website.

 

5 free tools to find out if your personal injury solicitor is an expert

Picture of Kevin Donoghue, Personal Injury Solicitor and Director of Donoghue Solicitors.
Kevin Donoghue, Solicitor Director of Donoghue Solicitors.

By Kevin Donoghue, Solicitor

How do you know if your personal injury solicitor is really an ‘expert’ in accident claims?

When you first speak to him or her you may only get their name and title.

You might feel awkward about asking them for their professional qualifications, so that without any further information you have no idea if they are truly capable of dealing with your personal injury claim, or if they are specialists in another area of law.

Luckily, the internet has come to the rescue. By using these five free tools you can quickly and easily check your personal injury solicitor’s credentials, and give yourself peace-of-mind. Ready? Here we go.

 

1.                 The Law Society’s ‘find a solicitor’ service

The Law Society, the representative body of solicitors in England and Wales, maintains a register (or ‘roll’) of solicitors through its regulatory arm, the Solicitors Regulation Authority.

To see if your personal injury solicitor is included on the roll, meaning that they are professionally qualified and properly regulated, go to the Find a Solicitor service (click on this link) and enter the solicitor’s last name. If you also have it, enter their first name, firm, and location.

You will be taken to a page where you can find their roll number, admission date, firm details, areas of law they specialise in, and details of any accreditation schemes.

This is a good place to start your research as it confirms basic details of your solicitor, but you will want to find out more.

2.                 The Law Society’s Personal Injury Accreditation Scheme search

 

Once you know that your legal representative is a qualified solicitor, how can you find out if he or she is an expert in personal injury law?

Answer: ask the solicitors’ own representatives, the Law Society.

According to the Law Society’s website, solicitors who have been appointed to the Law Society’s expert Personal Injury Panel:

‘go through rigorous examination and testing to demonstrate that they have a high level of knowledge, skills and experience in dealing with personal injury cases.’

Getting appointed to the Personal Injury Panel is hard. Less than 1,000 of all practising solicitors (over 130,000 in 2013) have been accepted to this expert group, which the Law Society calls a ‘community of excellence’.

To find out if your lawyer is a member of this élite group of personal injury solicitors, try these free tools:

i)             Review your personal injury solicitor’s entry through the ‘find a solicitor’ service (see 1. Above). You’ll find out if they are a member of the Personal Injury panel by checking if ‘Accreditation schemes: Member of the Personal Injury Panel’ is shown. If this is not listed under ‘Areas of law’ your solicitor has probably not been appointed to the Panel. (See below for why you can not be certain.)

ii)            Download the list of members from this page and see if your solicitor is among them. (Warning: this is a long .pdf document which is updated monthly, so if your solicitor has been appointed to the Personal Injury Panel more recently than that they may not show up on this list.).

iii)           go to the Law Society Approved website and type in the postcode of your solicitor’s office. If the firm’s name comes up, you will know that someone there is appointed to the Personal Injury Panel (but it might not necessarily be your solicitor).

3.         The Association of Personal Injury Lawyers (‘APIL’) Accreditation Scheme Search

 

In a similar way to the Law Society, the APIL accreditation scheme show details of personal injury solicitors (or other legal professionals) who have been independently assessed by APIL as having sufficient experience, ability, training, and commitment to the rights of accident victims.

APIL is a group of around 4,500 specialist personal injury lawyers who are dedicated to personal injury claims victims.

The APIL accreditation scheme has been in place since 1999. Members must commit to 16 hours of specialist training in personal injury law each year, and their levels of experience are reflected in their status within the organisation. For example, Senior Litigators must have at least five years’ experience, be capable of running cases without supervision, and be prepared to take cases to trial. They can also provide training and supervision to others within their own firm.

You can check if your personal injury solicitor is a member of APIL, and their status, by clicking here and entering their details.

4. The APIL Accredited Practice Search

APIL also have accredited practices.

They are law firms which are assessed and approved by the organisation and have at least one lawyer of ‘Senior Litigator’ status or above.

The firms must:

  • be regulated by the Solicitors Regulation Authority;
  • show a high standard of ‘client care’;
  • be committed to training and development;
  • have low supervision ratios;
  • have a documented quality assurance procedure; and
  • agree to have their performance monitored by APIL to make sure standards are maintained.

You can search APIL’s database of accredited firms here by entering the name of your personal injury solicitor.

If the firm is accredited, a box will appear confirming that it is an ‘Accredited Personal Injury Practice’.

 

5. Online reviews and personal recommendations

The above tools will give you great information about your personal injury solicitor’s qualifications and accreditations. But what are they like to deal with? To find out the answer to that, ask for personal recommendations from friends and family.

If they are not available, reading reviews on sites like www.google.co.uk can help.

The firm’s website, blog, Facebook, twitter, and LinkedIn profiles may also help you by giving you details of your personal injury solicitor, their professional accreditations, and any legal articles they have written which demonstrate their knowledge.

Why an expert Personal Injury Solicitor is a good choice

It’s worth taking the time to research your solicitor before instructing him or her. After all, you will be relying on them to look after your accident claim and may be working with them for some time.

Note that these tools may not be accurate or up to date. If in doubt, ask your personal injury solicitor directly. Gaining qualifications and accreditations is hard work, so they will be more than happy to tell you.

I hope that by showing you these free tools you will choose the right personal injury solicitor to look after your accident claim.

 

If you want to speak to an expert solicitor about personal injury claims, contact me, Kevin Donoghue, on 0151 236 1336 or via my firm’s website, www.donoghue-solicitors.co.uk.