MOJ - Can they fix it?

For those of us handling volume low value RTA claims there was a certain sense of Déjà Vu when the government response to the consultation paper was finally published in July 08. Despite a stated objective to streamline process and reduce costs in all PI claims up to £25,000, RTA, once again, found itself at the forefront of the reform. Reminiscent of the Cost Forums of 2000, RTA claims up to £10,000 were considered to be the only PI claims sufficiently suitable and in need of simplifying both in terms of process, reduced transaction time and cost savings for the introduction of fixed fees. Comments within the response paper such as “a belief that fixed recoverable costs will bring certainty and predictability to the new claims process” have left me puzzled as to what exactly the government thinks has been happening in the practical handling of RTA cases over the last few years since the introduction of Fixed Recoverable Costs, predictable fees?

For those who may have forgotten, the CJC spent a considerable amount of time and money in consultation, negotiation and finally mediation to arrive at certain and predictable fixed fees supported in principle and in amount by those practising in the Industry. Have predictable fees been a success? No system is ever going to be perfect and lessons can always been learned but I for one feel the positive effect on costs and process in RTA claims, brought about by the introduction of predictable fees, amount to an overwhelming success. What can be more certain than our current RTA predictable fees? In all PI cases over £1,000 the method of calculation linked to the value of Damages recognises a base cost in handling any claim irrespective of value and still creates a proportionate and predictable fee every time, unlike those often quoted cases of £2,000 Damages attracting costs of £5,000. It is not the disproportionate problem the government stated it intended to tackle, is this not a problem confined to EL and PL claims and is this not a thing of the past in uninsured RTA cases thanks to predictable fees?

If proportionality of costs to Damages cannot be the ill the government intends to cure by streamlining RTA cases, is it a perceived problem that the amount of work Claimant Lawyers put into cases is out of proportion to the amount they are receiving in costs? Insurers would have us believe this is the case after all how else can Claimant Lawyers afford to pay referral fees? In 2006 professors Fenn and Rickman published a follow up report on the success of predictable fees. The report found that the work carried out on RTA cases under £10,000 was broadly equivalent to the average predictable fees recovered. This is not anecdotal but independent evidence taken from insurer statistics and an independent review of Claimant files. What greater endorsement can there be to the success of predictable fees in reducing transitional cost?

The introduction of predictable fees did not require the imposition of a streamlined handling process. As a matter of commercial sense Claimant Lawyers looked to implement efficiency of process, to employ non qualified staff where appropriate to match the skill set required for the task in hand and entered into Protocols and commercial agreements wherever willingness could be found to cut down file duration and necessary handling. No Claimant Lawyer could have survived without the self-motivation of making the world fit the reduced costs of predictable fees.

For all the reasons stated I cannot help but think RTA cases are the wrong place for the government to start if they are looking for fundamental change. Since the introduction of predictable fees streamlined process has become endemic within our claims handling process and case management systems, costs recovered have reduced as has file duration in so far as it is possible to reduce that part of the process the Claimant controls.

If there is any positive impact the government’s proposals can have on the way RTA cases are handled this must be by imposing efficiencies of those we have no control over, primarily insurers. Delays in liability decisions, unreasonable offers, repeated failures to communicate and an apparent inability to pay costs within any reasonable time frame are unacceptable practises that need addressing. As RTA practitioners we must surely welcome reform that imposes early liability decisions and prescribes a method of communication that cuts out the frustration of repeated chasing and prompting. Anything that can be achieved in encouraging early offers, clearly defined areas of dispute and a positive attitude towards early settlement cannot be all bad!

As much as a more organised and efficient response from insurers should be welcomed there is a concern that as yet remains unanswered, namely, if this is essentially a further cost cutting exercise, where are those costs going to be cut from? On behalf of MASS I have been looking at the necessary steps taken by RTA practitioners in running an RTA case. The exercise is not a difficult one as the core work is carried out in a very similar and efficient way by our member firms. The resultant case flow demonstrates a number of key conclusions, namely;

• Very few cases follow an A-Z route. It is the minority of cases, mainly passengers with full recovery at 3 months that fit the idea of ‘simple claims’. Most cases have additional issues, vehicle related hire, repairs, disputes on vehicle value and/or injury related problems, rehabilitation needs, care needs etc. and contrary to the popular belief of some, injury above £5,000 become more protracted in recovery time, treatment need and can even be permanently debilitating whilst remaining within the £10,000 limit.
• We as Lawyers are subject to professional obligations. It is not possible to strip from the process the need to carry out certain checks, to properly supervise non qualified staff and to meet Client care needs even if meeting that need does not always progress the case such as advising on lack of progress.
• Issues of rehabilitation, vehicle hire and vehicle repair are issues of meeting a Claimants identified need where that need has not been met elsewhere. Just because an insurer is unable or chooses not to meet the need does not mean it does not exist. It would hardly be putting the claimant at the centre of the process if no provisions in costs were made for Claimants to be properly advised and assisted in getting those needs met.

Having looked at everything that has been taken out of the process, I looked at what could. The results were limited. Yes a streamlined process may cut duration by taking out insurer delay but delay in its self has little cost other than chase up calls and letters. A properly designed settlement pack clearly defining the areas in issue may conclude cases quicker by condensing the time to reach a satisfactory settlement but in terms of actual core work in advising on medical evidence, the value of the claim, offers and counteroffers the time taken remains the same.

The response to consultation paper sets out how the process will be designed and MASS are actively involved in working with the MOJ in defining the steps within the new process. The next stage is for the Costs Advisory Council to look at what level of Fee Earner should have responsibility for carrying out those steps, and how long each will take and what hourly rate should be applied.

The streamlining proposals, in my view, should be applauded in their endeavour to ensure that all parties to the process work in the most efficient and cost effective way to meet the needs of the injured claimant. I say this however with caution and hope that all necessary steps will be preserved from a system where Claimants are already working efficiently, where the cost of claims is already controlled by fixed fees and where the Claimant, the victim of someone else’s negligence, will be the main loser if the reasonable cost of advice and representation is denied.

Janet Tilley
Managing Partner, Colemans-ctts
Kingston-upon-Thames