Written Evidence from Coyne Learmonth, Solicitors (clm0010)

Introduction

  1. Coyne Learmonth is a Law Firm based in Crosby Merseyside which practices in the area of Road Traffic Accident Claims with a particular interest and expertise in credit hire claims associated with Road Traffic Accidents.  We have practiced exclusively in this area since the end of the last century and represented the Claimant/Respondent in the Court of Appeal case of Kearsley –v- Karslake a seminal case in this area of practice.

Executive Summary

  1. The raising of the small claims limit to £5,000 for RTA related whiplash claims will produce unfairness as between victims of negligence who suffer a soft tissue injury in a road traffic accident compared with those who suffer soft tissue injuries in none road traffic accidents.  Claimants with whiplash only injuries will be obliged to obtain a judgement before they get any compensation.  The cost of funding small claims litigation (SCL) will have to be paid up front by Claimants who have not previously had to do so and will produce real hardship for huge numbers of claimants.

 

  1. The impact of this policy on the operation of the market for “Before the Event” legal expense insurance is likely to result in such insurance being unavailable at reasonable cost following the recent case of Nobile –v- Das Rechtsschutz-Versicherings AG (case E-21/16). 

 

The impact of raising the small claims limit to £5,000 for RTA related whiplash claims and of raising the small claims limit to £2,000 for personal injury claims more generally,

 

  1. The proposed tariff system for whiplash injuries will produce significant unfairness and will discriminate against such Claimants when compared with Claimants who suffer soft tissue injuries to other parts of the body.  The proposed tariff is derisory and as far anyone can tell comprises of figures plucked out of the air by people who have no qualifications to make any assessment.  The Judicial College Guidelines compiled by acknowledged experts in assessing damages deal with minor injuries at chapter 13 of the 14th Edition.  This chapter deals with precisely these sorts of soft tissue injuries.  Where there is a complete recovery within 28 days the sum would attract an award of between £600.00 and £1200.  Pain, suffering and loss of amenity in soft tissue injuries whichever part of the body is affected are substantially the same.  A 3 month none whiplash soft tissue injury would currently attract an award of £2,150.  The Claimant with a 3 month none whiplash soft tissue injury would therefore be able to access a Solicitor whose costs would be recoverable under the fixed cost regime from a negligent Defendant, whereas a whiplash victim would have no such access despite suffering for a minimum extra period of 21 months.  It is demonstrably unfair that a sub category of soft tissue injury should attract so vastly reduced an award.

 

  1. In cost bearing cases in this area of practice Solicitors will typically fund the cost of medical reports and Court fees during the lifetime of a case and not ask a Claimant to make those payments on account.  The initial medical report costs £216.00.  Typically if a Claimant does not recover within a given prognosis period of say 12 months, a further report will be required often from an Orthopaedic Surgeon.  The cost of that report is £420.00.  The cost of obtaining medical records is £80.00 and an addendum report for medical records is £50.00, and responses to Part 35 questions are £80.00.  Court issue fees for claims up to £5,000 currently range from between £80.00 and £205.00.  These are significant up front sums that Claimants will have to pay.  Attempts to save costs by for example limiting the extent of medical evidence where a Claimant has not recovered as anticipated, runs the risk of missing a potentially serious problem which might ultimately result in a claim of very significantly higher value being considerably under settled.

 

 

  1. Insurers will require Claimants to obtain a Judgement against their insured before they pay out any damages.  Anyone who doubts that proposition fails to understand the legal position of insurance companies.  Section 151 (5) of the Road Traffic Act 1988 requires insurers to pay out only when a judgement is obtained against their policy holder. At the moment Insurers only contact Claimants direct (known as third party capture) because they want to avoid that Claimant taking legal advice which would result not only in a higher settlement but also payment by the insurer of legal costs.   If the insurer does not have to pay legal costs then they will cease to contact the victims of their insured’s negligence when they receive an accident report form.  Insurers have a fiduciary duty to their shareholders to maximise profit and in so doing keep their overhead to a minimum.  If Claimant lawyer fees no longer have to be paid shareholders will insist that third party capture comes to an end and to pay out only when the unrepresented Claimant obtains a judgement.  Insurers will no doubt insist despite their fiduciary duty that they will deal with cases as they have done in the past.   The Committee is reminded of the insurance industry’s absolute promise to apply the savings from the last reforms to the reduction of insurance premia.  Does any Committee Member know of anyone whose insurance premium has not risen for a like for like policy since the introduction of the last set of reforms?

 

  1. Claimants will undoubtedly be required to obtain a judgement.  They will have to go to Court unrepresented (unless they are prepared to pay for it) and be met by a Professional Litigant (the insurer) represented by specialist lawyers whose fees no doubt attract tax relief for the insurance industry.  They will as now be routinely accused of dishonesty without Defendants being required to plead dishonesty.  That will have the effect of many Claimants abandoning claims which they would not abandon if they had access to experienced legal advice from Claimant Solicitors who know how to address such false claims of dishonesty.

 

  1. There will be inequality of arms before the Small Claims Court  which will produce even more unfairness which is particularly offensive given this Governments pledge and the Prime Ministers pledge in particular:

 

“To stand up for the weak and stand up to the strong……….. and putting fairness at the heart of our agenda.”

 

This proposal will do exactly the opposite.

 

The impact of this policy on the operation of the market for “Before the Event” Legal Expenses insurance.

  1. There was a time when bolt on legal expenses insurance to motor insurance policies was available at either nil or negligible costs usually about £10.00.  Those policies gave insurers the opportunity to refer the case to one of their panel Solicitors in return for a significant referral fee which amounted to a secret profit which was never disclosed to their insured.  Referral fees have of course now gone and the cost of such insurance has risen accordingly.   Insurers have nonetheless sought to retain control by insisting that policy holders can choose their own Solicitor only when Court proceedings have been commenced which of course effectively prevented the insured from having the choice of Solicitor and was saddled with the insurers panel Solicitor.  Since the very recent case of Nobile –v- Das Rechtsschutz-Versicherings AG (case E-21/16) the legal position is that the insured is entitled to choose their own Solicitor at the very outset of the case.  The decision also included a ruling that it wasn’t necessary for the insured to notify the BTE insurer in advance the Court also decided that BTE insurer had no right to refuse coverage for any potential proceedings because it the insurer considers such proceedings to be unnecessary or disproportionate or premature.

The consequences of this decision will persuade the insurance industry not to provide coverage at all in the small claims court. The BTE market will undoubtedly be considering its position following this case and those who choose to stay in the market will undoubtedly produce terms and conditions which will severely limit the coverage and/or make such policies extremely expensive.  It is extremely unlikely going forward that there will be a BTE market servicing Claimants in the Small Claims Court .

December 2017