Written evidence from UNISON
1. Introduction
2. UNISON is the UK’s largest trade union serving the public sector with over 1.3 million members working in the NHS, local government, schools and universities, as well as in the police and justice sector and the electricity, gas and water industries, transport and voluntary sector. The majority of our members are women – many of whom are low paid, earning less than £14,000 pa. For our members real access to justice can only be obtained by relying on our comprehensive legal assistance scheme, ensuring they receive legal representation.
3. UNISON’s scheme offers legal assistance to our members who are negligently injured because of an accident at work (EL claims), this covers the majority of the personal injury (PI) cases we support. We also assist our members and their family members with non work related injury claims such as road traffic accident (RTA) claims. UNISON’s scheme covered over 6500 PI matters last year.
4. UNISON represents the interests of claimants and does not exist to make a profit. We want to ensure that our members and their family members receive access to justice. We believe this will be seriously undermined by the current reforms.
5. Call for further evidence
6. UNISON opposes raising the small claims limit to £2000 for non RTA whiplash claims, and raising that limit to £5000 for RTA whiplash claims for the reasons outlined in our last submission. In addition to that submission we make further points here, and also highlight more recent information, evidence.
7. One of the main reasons given by the Government for introducing this radical reform is the high prevalence of whiplash claims. Yet there is no objective evidence of a compensation culture, as outlined in our previous submission. And since the Committee’s last call for evidence further data verifies an ongoing decrease in claims.
8. The published Claims Portal figures show a continuing decline in claims volumes. The new figures for RTA claims each month this year is lower than the equivalent months in the last few years, evidencing this longer term trend. Comparing the latest November figures over the last few years this equates to a 10-15% drop.
9. And the position is even more pronounced for EL claims. There has been no argument presented by the Government or defendants/insurers that EL claims are subject to a compensation culture. There has not been any significant increase in EL claims over the last 10 or indeed 6 years.
10. Recent statistics, since we last submitted evidence, from the CRU and the Claims Portal have again borne this out. The latest CRU figures show a further drop in EL claims, their lowest for 7 years. There is a drop of just over 15% from last year (86,495 to 73,355), and a decline is also shown through the Claims Portal figures too.
11. Besides the whole premise for these reforms is the dysfunctional RTA whiplash claims market. There is no justification for raising the small claims limit for workplace claims. Increasing the small claims limit beyond whiplash is not consistent with the Government’s reform agenda, and as such can only be viewed as punitive.
12. The Government acknowledged they have no information on how this would impact on EL claimants and that market generally. They confirmed in their consultation “Reforming the Soft Tissue Injury (Whiplash) Claims process” (Nov 2016) they had not carried out any impact assessment (IA) on EL claims (para 2.102 and 2.108, p 41/42), despite acknowledging EL claims are more complicated than RTA cases (para 91, p27). Further, when you take into account the number of workplace accident and occupational disease cases is a small fraction of the overall PI market (less than 10%), there seems to be absolutely no evidence to support this reform.
13. In the Committee’s recent comments, from their Third Report of Session 2017-19 on the PI discount rate, it was made clear (p18, HC374) “an adequate evidence base for policy changes is important”. We concur legal reforms need to be properly evidenced, especially reforms such as these, which are so far reaching and likely to have such a damaging effect on access to justice. These reforms should not proceed on the justifications given by the Government to date.
14. Many complex EL claims we pursue fall below this £2000 threshold. These cases are not suitable for the small claims track, further we fear that an online solution will only add to claimants’ detriment restricting their rights. There seems to be a misapprehension within Government about what can be achieved online.
15. The current online Claims Portal initially brought in for RTA claims, works because it was developed as a joint stakeholder initiative, claimants remained protected because of the costs regime which ensured legal representation, and crucially it only deals with liability admitted cases, thereby incentivizing quicker, early settlement. But even then liability is still often denied.
16. The system is less effective in EL cases, where we see many more cases where no response is received/liability is denied. With our own cases this equates to 71% EL accident and 79% EL disease claims. In a no cost regime, as proposed by the Government there would be every incentive for defendants to deny liability. The Government own IA accepts (p 42, IA, para 2.107) as defendants/insurers won’t have to pay legal costs they would contest more claims.
17. How then could any online system deal with thousands of claimants, many of whom will be litigants in person (LiP) with EL liability denied claims. Claims which are more legally complex (often involving technical regulations), where the employer will inevitably be represented, and will have access to the accident site, related documents and witnesses. What protection will there be for employees to secure access to justice.
18. Neither could an online system deal with complex injuries arising from an EL claim, including issues of causation. How would a LiP be protected from undersettlement. There are real issues over individual claimant instruction via Med Co. And as the £2000 only relates to the injury element of a claim the total claim may well be higher, looking at our cases, possibly in the order of £2,500. This would affect a substantial percentage of the EL claims we currently support, and represents almost two months salary for many of our women members.
19. Cases of this value include minor psychiatric damage, collapsed lungs or fractured ribs causing pain and disability over a period of weeks, disease claims like lung disease, causing chest problems only resolving within a few months; hand injuries with continuing symptoms up to six months and needlestick injuries. Claims which can seriously impact on our members lives, their ability to work and the impact that may have on their families too, which may be even more pronounced if they have caring responsibilities.
20. Recent updates on the courts own online initiative (see Law Gazette 13/11/2017, p8) indicate just what a challenge developing an online system entails. The courts own project, still in its infancy even assuming proper funding, is unlikely to be ready until 2020 at the earliest. Even when the scope of that project is very limited (ie just dealing with claims for specified debt) an online solution can still throw up great difficulties and highlight unintended consequences. There are issues over how to give proper guidance and assistance, how to engage with those who are not IT literate and how to authenticate claims whilst still retaining access to justice even in the most basic claims scenario. Yet the proposals here cover claims that are much more difficult to resolve, and which will have far reaching affects on claimants as well as general health and safety in the workplace.
21. There would need to be a radical rebuild, as well as new legal protocols. That rebuild would need to be done slowly and carefully to try and ensure smooth access from day one to LiP’s, unlike with the previous Claims Portal roll out where lawyers were accessing the early versions of the system, so that claimants were protected as technical workarounds could be used to iron out problems. Even then we doubt that such an IT system would lead to access to justice. Any decision tree to guide litigants through the type of claims we have referred to above would simply be too complex.
22. However should the Government decide to continue with these reforms (despite a wholesale lack of objective evidence as to the need and impact of such changes) it should at least recognize the size of the issue. The reforms should not encompass EL claims at all. Acknowledging the complications of an online courts system HMCTS have quite properly begun their roll-out with a small pilot to try and resolve major issues before continuing the reform. So we would expect the Government to take access to justice seriously and begin with a pilot here focusing on the simplest RTA whiplash cases of the lowest value where liability is admitted, and delaying implementation until the position with the online courts project is clearer to prevent any incompatibility.
23. That said UNISON is also opposed to increasing the small claims limit for RTA whiplash claims up to £5000. RTA victims suffering up to 2 years of pain and suffering, due to the negligence of another, is not a “minor” injury. The impact on our members with claims, such as the one we supported for a cyclist who was hit by an oncoming car turning right sustaining soft tissue injury to his chest and a laceration involving 80 stitches to his face, will be devastating.
24. Since the Committee’s last call for evidence the 14th edition of JCG has been issued (September 2017). This now sets out the range of appropriate compensation for such “minor” claims at between £2150 and £6920. This has made the slashing of compensation for RTA victims even more stark.
25. The Government have disclosed no objective evidence as to why the single fixed tariff proposed (now covering both whiplash and minor psychological injury) should be set at such low levels. In addition once set we fear they will remain in place for many years (as has occurred with the CICA) rather than being uprated regularly as the JCG are.
26. Comparing the tariff as against the JCG upper limit shows a shocking reduction in compensation. This ranges from 80-90% where the injury lasts under 9 months, 62-75% for injuries under 18 months and a 46% reduction for those very serious injuries lasting 19-24 months. These figures in no way reflect the pain and suffering and loss of amenity these accident victims have been subjected to. This radical reform is also completely contrary to the Government’s policy of trying to improve road safety, sending out a message that the negligent actions of drivers will only have limited repercussions, the polluter simply does not have to pay.
27. And where do these reforms leave our members in the heath sector, such as ambulance drivers, injured in an RTA because of the negligence of others whilst carrying out a vital public service. Why should they be penalized, loosing up to 90% of their damages. No arguments have been raised by the Government as to such claims being a product of compensation culture, or fraud being in issue. This can only be seen as a blatant attack on our members rights’ denying those workers access to justice. If these reforms are to go ahead for whiplash RTA claims, which we oppose, they should certainly not apply to workers RTA claims. There should be a specific exemption for such matters.
28. The Government refers to using a strict tariff to guard against under-settlement (and places this as a “benefit” in the IA para 2.83, p36) yet the figures proposed speak for themselves. These figures will mean many thousands of claimants suffering severe under-settlement, a loss to injury victims, based on the Governments’ own figures which we believe to be very conservative, of £581m.
29. Victims who will not only see their compensation cut but who may well face increased costs by way of BTE cover (see below) or have to pay CMC’s if they decide not to proceed as LiPs.
30. In a no costs regime claimants are very vulnerable. If, as seems likely in many cases, legal representation is not available or viable, in addition to claims not being brought at all, they are most likely to be brought by consumers themselves as LiP’s or via CMC’s.
31. In this situation cases could well include less meritorious cases. We currently have lawyers in the process to act as gatekeepers. This not only helps with ensuring cases are processed efficiently but also in filtering unmeritorious cases as well as preventing fraud. Increasing the small claims limit is likely to assist those very few claimants who may seek to make an exaggerated or dishonest claim, acting entirely contrary to the Governments supposed aims.
32. The small claims track will not offer a better framework for challenging fraud. The dishonest claimant will no longer be expected to present their case to a legal professional, with all the regulatory checks and balances that entails. They will bring their claim in a more informal process where the strict rules of evidence will not apply and their claim will not be scrutinized by a claimant solicitor. Indeed as noted in relation to the HMCTS’s project, if the reforms are to be introduced on an online basis too, verifying and authenticating claims will be a considerable issue.
33. This will be compounded by the increased use of CMC’s. CMC’s are more likely to increase their aggressive marketing techniques such as cold calling to get the claims in (irrespective of merits) and encourage claimants to make those claims. Although it seems the issue of cold calling will now be addressed in pensions matters, the recent debate of the Financial and Guidance Bill has lead to a rejection of such a ban being implemented for CMC’s dealing with PI claims.
34. CMC’s are not adequately regulated and they will try and profit from this new regime to, in our view, the detriment of the claimant. This will be exacerbated by the tightening of reforms for CMC’s in the financial sector including the PPI deadline coming in May 2019 whereafter CMC’s will undoubtedly focus more of their attention on the PI market.
35. CMC’s may well take a hefty percentage of claimants damages without adding any real value. Adequately protecting consumers/enforcing compliance on rogue CMC’s will be very difficult. We know from the recent Legal Ombudsman, YouGovProfiles research that the users of CMCs will often be older consumers and those on a lower income, who are likely to be more vulnerable to the actions of those CMC’s acting unscrupulously.
36. Whilst great faith is being put in the FCA’s ability to deal with the problems the CMC market has been dogged with for years, it is clear implementation will take time, with secondary legislation needed to supplement the Financial Services and Markets Act. CMC compliance with not be a quick or easy fix, particularly where those regulations fall short of those imposed on lawyers. And even assuming this will eradicate the problems, in the meantime claimants are left in a very vulnerable position if the small claims limit is increased.
37. In defence of their proposal the Government refers to the BTE market potentially plugging the representation gap. However legal expenses insurance (LEI) is often a feature of the RTA market. It is less likely to cover complicated EL claims. As referred to when UNISON gave evidence to the CJC as part of their recent Information Study (The Law and Practicalities of BTE Insurance, November 2017, p122) and as confirmed in that report (p58) LEI typically excludes industrial disease cases.
38. Further relying on BTE to solve the access to justice issues here is flawed. The model for BTE insurance is based on many paying premiums (through add on policies with their car and household insurance) whilst never having to rely on the policy to make legal claims. Or not realizing they have the cover - many LEI policy holders are unaware of the cover, or understand what that cover entails. In the SME market even when awareness is heightened (p101 of the CJC report) there is still a relatively low usage of the products.
40. Cheap stand alone BTE policies are unlikely to be a feature of the BTE market in the UK (p105 of the CJC report) and with those who do have the cover trying to use the policies in a no costs regime, the costs of LEI will in our view increase. If the cost of add on policies increases with these reforms, take up too will fall particularly when consumers are already suffering from austerity measures, compounding the pressure on premiums. This increased cost is referred to within the Government’s IA (para 2.113 p42/43) stating BTE costs could go up £247m – and this cost will be passed onto consumers, which would equate to £9 pa (2.141, p45) but equally could also be much higher. Alternatively exclusions may be added to such policies for cover for claims falling within the small claims regime.
41. Further what of those most vulnerable consumers, those on low incomes who do not own a car or a house, excluded from BTE cover. We know it is absolutely vital for our members, and claimants in general, to have legal representation when bringing a PI claim.
42. Conclusion
43. It is for all of the above reasons that UNISON opposes the increase to the small claims limit.