At this year’s White Paper Legal Costs Conference, Keith Hayward, from Victory Legal Costs Solicitors, gave a very interesting talk on ATE premiums in low value RTA claims. This talk was accompanied by excellent accompanying notes. I cheekily asked Keith whether he would mind me reproducing the notes and not only was he kind enough to agree but he has gone one further and updated the notes to include a commentary on the Liverpool Test Cases.

This is essential reading for those involved in challenges to ATE premiums.

These have now been added to the Costs Law Articles Archive:

ATE premiums - single or staged

Recovering ATE premiums - case law

The Government has announced its proposals for the new fee structure for the extended RTA portal, which will now cover RTA claims up to £25,000 and also EL and PL claims.

As anticipated/feared this will be dramatically lower than current levels with the fee for RTA cases worth up to £10,000 falling from £1,200 to £500. For RTA claims worth between £10,000 and £25,000 the fee will be £800.

In respect of EL and PL claims, the proposed figures are £900 for cases up to £10,000 and £1,600 for cases up to £1,600.

If that were not dramatic enough fee, arguably, the even more significant announcement is a set of fixed fees for claims that exit the portal. The absence of fixed fees in this area has always been the glaring omission in the plans to control costs. Lord Justice Jackson's proposals and are now going to be implemented virtually in full.

Fixed fees across the fast-track come April 2013.

The Association of Personal Injury Lawyers (APIL) report into whiplash injuries, subtitled “Myth or Fact?”, reports that 70% of those surveyed who provided a definite answer would not know how much to claim for their whiplash injury. Presumably the other 30% were of the view that they would know the true value.

I can only assume that Kemp & Kemp is more popular bedtime reading amongst the British public than Fifty Shades of Grey.

To be fair, this kind of survey is only meant to be a bit of fun and obviously not taken too seriously.

An issue that has long being bubbling under the surface is the extent to which the Cancellation of Contracts made in a Consumer’s Home or Place of Work etc Regulations 2008 apply to solicitors’ conditional fee agreements and whether a failure to contain notice of the claimant’s rights to cancel a CFA renders the agreement unenforceable. Despite lengthy commentary been devoted to this issue at various stages there appears to have been very little in the way of judicial decision on the issue.

However, this appears to have now shot back up the agenda in light of a recent decision by Regional Costs Judge Moss in Hurley v Makuni (Manchester County Court, unreported) (click link for judgment). It was ruled that a failure to include such a notice rendered the agreement unenforceable notwithstanding the fact that the CFA was a "CFA Lite”. Expect this issue to run to the Court of Appeal. 

Thanks to Paul Wainwright at Berrymans Lace Mawer for providing details on this case.

The Association of Personal Injury Lawyers (APIL) has recently published a report into whiplash injuries, subtitled “Myth or Fact?”, including details of an independent survey of 4,000 people. APIL advise “Some may find the answers surprising”.

The results of the survey show “33 per cent of people reported their symptoms accurately; 47 per cent of people said they made their symptoms seem better than they were, to the person making the diagnosis”.

Although APIL’s report does not spell this out, presumably the balance of 20 per cent either exaggerated their symptoms or claimed to have suffered an injury when they had not.

This survey was apparently conducted via an "online omnibus panel". I assume this is some kind of an online questionnaire. What is surprising is not the fact that 20% of those surveyed appear to have deliberately exaggerated their symptoms but that 20% were prepared to admit to having done so. It hardly takes a leap of imagination to suppose that the true portion is much higher.

The survey discovered that “90 per cent of people think claiming for an injury when you haven’t been injured is fraudulent”. What planet does the other 10% live on? And “89 per cent of people think deliberately crashing your car in order to be able to make a claim for personal injury is fraudulent”. It’s not so much the issue of whether 11% appear to believe that it is not problematic to deliberately crash their car to make a personal injury claim, but the fact they don't even recognise this as being fraudulent. One of APIL’s proposed solutions to stamping out fraud in this area is that “Claimants to be subject to a standard, written statement of truth which must be explained to them by their solicitors”. That should do the trick then.

Another interesting statistic provided by the survey is that “almost 90 per cent of sufferers are diagnosed by a medical professional”. If 67% of respondents were giving inaccurate information to the medical professional (47% underreporting and 20% overreporting) how accurate were these diagnoses? I have yet to see a medical report in a whiplash claim where the medical "expert" identified the fact that the claimant’s symptoms were worse than described, although this should presumably be the case in almost 50% of medical reports. That is before we go on to the issue of how capable medical professionals are at identifying exaggerated claims. As my good friend Jacques Hughes previously commented via the Blog:

“If anyone thinks minor whiplash injuries are ‘proved’ by medical evidence, they are deluded. You go to a GP expert about 4 months post RTA. You tell him that your neck was very painful for a week or two, but symptoms gradually resolved over the course of the next 3 months. He writes this down, conducts a very simply examination to see if you are moving your neck OK. He then writes down “examination confirms a full recovery as stated.”

You then collect a tax free cheque for about £1,250.

Almost everyone now knows about this, and lots of otherwise honest people see it as OK to claim such symptoms post RTA and pocket the cheque.

I don’t suggest there are easy answers, but if you think this isn’t happening, and that it isn’t a problem, you are mistaken.”

Another of APIL’s proposed solutions to reducing fraud is for “insurers to be banned from making offers of compensation before a medical report has been seen: the medical report is a critical factor in ensuring a claim has merit and that accurate compensation is paid”.

Now let's turn to the survey's findings as to the time that whiplash injuries last. This records that it lasts up to a couple of days for 13% of sufferers and up to a couple of weeks for 25%. Just over half of those suffering injuries lasting up to a couple of weeks brought a claim. If the symptoms reported by those claimants were accurate it is difficult to see how it can be proportionate to insist upon medical reports before offers are made for such minor claims. On the other hand, if some of these claims are fraudulent it is difficult to see how a medical expert will be able to establish this by the time the medical examination is undertaken (usually weeks or months after the alleged symptoms have apparently cleared up).

Readers will no doubt have noticed that the inside front cover of the Second Edition of Mark Friston’s Civil Costs: Law and Practice has guideline rates for the last few years. Where rates were not published in any given year, they have been extrapolated from other years. This applies to 2004 and 2011. Unfortunately, the footnote for 2011 has been omitted and as such it looks like the rates are published rates when in fact they are extrapolated.

I understand the following erratum slip will be inserted in future copies:

Erratum
The table inside the front cover should have the following footnote relating to the rates for 2011:

“These rates are extrapolated; in April 2011 the Master of the Rolls advised that 2010 rates should apply pending a review; that review has seemingly not taken place and as such it is arguable that extrapolated rates (i.e., those shown) should apply."

Costs Practice Direction 6.5A states:

“(1) If there is a difference of 20% or more between the base costs claimed by a receiving party on detailed assessment and the costs shown in an estimate of costs filed by that party, the receiving party must provide a statement of the reasons for the difference with his bill of costs.”

Has there ever been a more widely ignored Practice Direction?

A new Costs Council was one of the recommendations of Lord Justice Jackson as an independent body to set the guideline hourly rates (GHR) every year, review fixed cost levels on a regular basis, and keep a watching brief on other issues, such as recoverable counsel’s fees and the cost of medical reports.

However, in an announcement this week, the government said that the GHR would become the responsibility of a new sub-committee of the Civil Justice Council, while all other costs issues would rest with the Ministry of Justice – which may seek advice from the sub-committee.

The Association of Costs Lawyers Chairman Iain Stark's view is:

“The decision is disappointing. The Costs Council was a worthy reform that would have provided certainty for the profession in the future and placed decisions in the hands of those at the coal face. It would also have ensured that fixed costs, which tend to stay untouched over many years, change to reflect rises in inflation.

While the new sub-committee is a much diluted version of what Lord Justice Jackson proposed, any decision-making body made up of judges, costs lawyers and practitioners must be a good thing.

Speaking at the ACL conference in May, the then Master of the Rolls, Lord Neuberger, said he would expect the ACL to be represented on a costs council. I hope and trust that his successor will take the same view for the sub-committee.”

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