Written evidence from Minster Law
Minster Law welcomes the opportunity to submit evidence to the Justice Select Committee in respect of its enquiry into Whiplash, and strongly supports the Committee’s work on this important issue for our business and our clients.
About Minster Law
Minster Law, founded in 2003, is one of the UK’s largest personal injury solicitors, with particular expertise in Road Traffic Accident claims. We have offices in York, Wakefield and London, and employ a team of 620, including 80 legal professionals, whose focus is on improving the lives of our clients.
Minster Law has opened cases for over 800,000 people in the UK since 2006 and has to date secured damages of £1.1 billion for our clients. Minster law has, since 2006, helped 660,000 motorists, 32,000 bikers, and 25,000 people suffering from other types of accidents. Minster Law typically settles 2,200 cases every month.
Minster Law is a member of Access to Justice (A2J) and concurs with the arguments made in the A2J submission to the Committee.
Summary
Minster Law is unconvinced of the government’s rationale for the reforms. We echo the recommendations of the Transport Select Committee in its 2013 whiplash report, which called for the government to focus on an evidence-based approach to policy making on issues such as insurance fraud before proceeding with its proposals.
Minster Law does not take clients referred by claims management companies or cold callers, nor does it make any effort to source claims directly from consumers. All our clients are customers of blue chip UK brand names who have bona fide injuries and have looked to our expertise, advice and help to see them safely through their claim. There is no evidence to support the ABI view that the UK is in the grip of a fraud epidemic, although we do accept that there are some individuals, and law firms, who try and game the system.
There are already adequate laws in place to deal with criminal activity of this nature, and we urge law enforcement authorities and insurers to prosecute offenders through to conviction, which is in our view the best possible deterrent to others.
Evidence-based policy
A full and impartial review of the evidence will also determine that there has been a year on year reduction in whiplash claims incidence. Within Minster Law, there has also been a decline in the number of whiplash and other small claims cases we have managed during the past two years. That decline is partly due to changes in our own internal strategy, for example in response to regulatory changes, but also as a result of an overall decline in the number of claims per se. Anecdotally, our peers have also stated a decline in incidence. There are a growing number of large and smaller claimant law firms going out of business (citing the fall in RTA claims and drastically reduced legal fees as the reason).
The Legal Aid, Sentencing and Punishment of Offenders Act of 2012 (LASPO) has presided over a reduction in claims volumes and claims costs. Insurers themselves have acknowledged this decline, both in incidence and in cost per claim. The delay to the government’s personal injury reform programme has surfaced this reduction, and we believe a review of LASPO by the government, due to be completed in the Summer of 2018, will confirm it, so leading to the conclusion that the further PI/whiplash reforms are intended to remedy a perceived problem that is already being fixed.
It is our belief that a full impact assessment of the various and extensive measures implemented in recent years should be undertaken to support sound evidential based policy making by government.
The third report from the Institute of Actuaries states that the ‘proportion of cost from Third Party Legal Fees has reduced from 40% in 2012 to 27% in 2015’ and ‘the settled average cost for 2014 is £1,100 (or around 50%) less than 2012 at the same point in development and the new level of legal fees appears to have become embedded post LASPO with the average cost broadly similar in 2015.’
With this in mind, we urge the Committee to call on the MoJ to stay its hand on the Civil Liability Bill at least until the LASPO review has been completed, and the findings both published and debated by appropriate stakeholders, including Parliament.
An adversarial model is at the heart of the UK’s civil justice model
Minster Law agrees with a commonly held view that the UK’s civil justice system is ‘world class,’ but it is also under threat. The Law Society Gazette recently reported in November that the MoJ budget will fall by 40% in real terms between 2011 and 2020. https://www.lawgazette.co.uk/news/budget-2017-hammond-confirms-600m-cut-to-moj-spending/5063799.article
The severity of these cuts has, in our view, caused the MoJ to lose its sense of mission, which is to uphold and champion our system of justice and fight to ensure that access to justice is safeguarded, especially for ordinary people who do not otherwise have the resources to go to law. While Minster Law understands the need to manage justice efficiently, and indeed we are ourselves investing heavily in technology to improve the client journey and reduce cost, care needs to be taken that cost reductions do not trump the principle of access to justice.
In his remarks to accompany the government’s announcing its review of LASPO Justice minister, Dominic Raab MP, noted that ‘maintaining access to justice continues to be at the heart of reforms’ https://www.lawgazette.co.uk/news/laspo-review-should-consider-basic-right-to-access-to-justice-mps/5064105.article
According to Capital Economics [Road traffic accident personal injury claims, results from a survey of law firms, Capital Economics 2017], 600,000 people a year who suffer minor injuries from road traffic accidents will be denied access to a lawyer to assist their claim, an outcome that sits uneasily with the minister’s remarks.
We believe that the adversarial nature of our civil justice system is partly responsible for its premier reputation and, while it is important to operate justice efficiently we should be cautious before endorsing wholesale changes in approach that would compromise a system where claimants and defendants have to prove their case in front of a judge.
Legal expenses Insurance (LEI)
The vast majority of cases undertaken by Minster Law are received as a result of our insurer partners’ policyholders claiming on their legal expenses insurance policy. That policy was either sold to them as an add-on to their core motor insurance policy or included as a “bundled” product. In its original impact assessment, the MoJ has cited the increased uptake of LEI as a means of ensuring clients can access a lawyer in the event of a claim.
We do not accept that LEI uptake is a quid pro quo for the proposed whiplash reform.
a. We forecast as a result of the reforms the premiums for LEI will inevitably and significantly increase. The providers of the LEI products will need to increase the total premium pot from which legal fees will need to be paid for claims falling within the small claims track, as those solicitors undertaking this work will no longer be able to recover their fees from the fault party or typically their insurer.
b. Regulatory changes enforced following the FCA’s Market Study into General Insurance Add Ons (July 2014) to LEI sales processes changed the sale of “before the event” LEI as an add on product from an opt out to opt in purchase. This, alongside of the same Market Study forcing price comparison websites to provide greater clarity on add options and pricing, has resulted in a significant reduction in sales (anecdotally around 50% across the whole sector)
c. The distribution dominance of price comparison websites in private motor insurance mitigates against BTE LEI being more widely adopted, because users of such comparison sites are highly price sensitive. Insurers will be reluctant to include BTE LEI as part of a motor policy for fear of making their products appear uncompetitive.
Our mission – hearing from the injured
Minster Law’s mission is to assist our clients obtain the level of compensation their injuries deserve. As stated in our introduction, we assist over 2,000 clients a month. If the government’s proposals become law, Capital Economics estimates that as many as 600,000 injured people would lose access to legal help.
Either those claimants would be forced to attend the Court as a litigant in person (LiP), or more likely decide against litigation and remain uncompensated for the injuries they suffer.
A recent case study illustrates the value our clients attach to our support, advice and help; help that would be denied them if ministers have their way.
This is an extract from our client’s story:
When Mrs Probets was involved in a minor road traffic accident, her personal injury claim should have been straightforward and relatively quick to settle. However, complications during the course of her claim, including the other driver denying any responsibility, caused significant and unnecessary delays in the process and undue emotional trauma to her and her family.
Fifty-two-year-old Mrs Probets was a passenger in her husband’s car when they were hit in the rear by another vehicle. The accident was relatively low impact and she suffered minor injuries including neck, shoulder and back pain as well as some aggravation to a pre-existing injury. Although both parties swapped insurance details at the scene of the accident, the defendant later went on to deny all involvement when Mrs Probets decided to pursue a personal injury claim.
Making a personal injury claim is a relatively simple process for most people and, for minor accidents, a claim could take as little as a few months to settle. However, claims can’t run smoothly if liability is an ongoing battle and in Mrs Probets’ case, the defendant’s refusal to admit responsibility raised questions around the reliability of her evidence. This significantly prolonged the claim and added undue emotional stress when she should have been focusing on recovery.
With the help of Minster Law, Mrs Probets and her legal team were eventually able to prove that the defendant was at the scene of the accident and had caused the collision. However, the claim took more than two years to settle, which is significantly longer than a case of this nature should have taken to conclude.
Minster Law’s Karen Loomes, who led Mrs Probets’ case said: “The length of time a case takes to settle is difficult to estimate, but the most frequent and recurring reason for delays is the admittance of liability. Although there was no doubt for us that Mrs Probets was telling the truth about her accident, we had a long road ahead in proving this to the court.
“As the defendant continually denied that he was at the scene of the accident, Mrs Probets could have been investigated for fraud and, if found guilty, she would have been liable for thousands of pounds of costs. Although it took a long time to bring to a conclusion, we’re pleased Mrs Probets finally got the settlement she was entitled to as well as the justice she deserved.”
Mrs Probets added: “My road accident was fairly minor so I thought my claim would be quick to settle. I couldn’t believe it when the defendant said he wasn’t even involved in the accident – I worried that people wouldn’t believe me, despite having all the relevant evidence in place.
“I’m really grateful to Karen and the rest of the team at Minster Law for supporting me through this really difficult and emotional period. It has been such as stressful time for me, but I’m pleased I can finally get on with my life.”
Minster Law encourages the Justice Committee, in the course of its investigation, to listen to the experiences of Mrs Probets and many thousands of other injured people, like her, who’s opportunity to gain redress for her injuries would be lost if the government’s reform proposals become law.
Minster Law helps thousand of people like Mrs Probets every month. Ministers and officials have a duty to listen to their stories and experiences, so that the full implications of far reaching policy decisions that affect historic citizens’ rights can be properly assessed. Mrs Probets brings to life both the excellent work our legal professionals do for their clients (for a fixed fee), and the consequences for UK citizens if these rights were lost.
Conclusion
We look forward to the Committee’s thorough investigation of the issues at stake with regard to whiplash and the government’s proposed personal injury reforms.
Fundamentally, we do not believe that government intervention is either necessary or desirable in respect of personal injury reform. Instead it is incumbent on the industry as a whole, both claimant and defendant sides, to come together and agree a set of compromise proposals that all sides (including government) can support, and which meet common objectives, without compromising access to justice.
Minster Law has played a leading role in the creation of the Alternative Claims Framework (ACF) by Access to Justice. The ACF is an important first step in bringing together stakeholder groups who share similar aims and objectives, namely to reduce frivolous and potentially fraudulent claims, to make sure that injured people receive what they need by way of compensation and that there is appropriate regulation of the claims management industry, through the FCA.
Cross-industry agreement to this set of principles would obviate the need for legislation, and create future certainty for insurers, claimant and defendant firms and clients alike. We urge the committee to investigate the ACF as part of its inquiry, and challenge all stakeholders to purse a strategy of consensus not conflict.