In our latest update, the MoJ looks to halve RTA Portal fees, Grayling says he will reconsider elements of LASPO if they create major problems, Transport Secretary Hammond speaks on increases in car insurance due to equality laws, Lord Freud meets with stakeholders in order to improve claims for mesothelioma sufferers and a recent consumer intelligence survey finds consumers are distrustful of whiplash and personal injury lawyers.
MoJ looks to halve RTA Portal fees
On 19 November, the Ministry of Justice announced proposals to cut the basic RTA Portal fee by more than half as well as introducing fast-track fixed recoverable costs (FRC). These FRC, in line with but less than Lord Jackson’s recommendation, will be levied on any personal injury cases not covered under the portal and will be based on Jackson’s Table B matrix.
The portal fee for RTA cases worth up to £10,000 will be reduced from £1,200 to £500, coming into effect in April next year. The fee for claims worth between £10,000 and £25,000 will now be £800. The MoJ has also announced fees for the planned extension of the portal to employer and public liability (EL/PL) cases, which will be £900 for cases worth up to £10,000 and £1,600 for cases worth between £10,000 and £25,000. The fees for paper and oral hearings remain the same.
The move was welcomed by the Association of British Insurers (ABI) who said it was “a blow to the ambulance chasing compensation culture” and good news for motorists as it would cut their legal costs. Association of Personal Injury Lawyers (APIL) has criticised the move with president Karl Tonks commenting “We’re appalled by these proposals, which are wholly damaging to the interests of injured people”. His concern centred on the ability of lawyers to provide their services for what they consider to be insufficient funds. Tracy Head, a partner at leading defendant law firm Kennedys, said “The proposed levels of fixed recoverable costs under the Portal appear sensible. A level of costs is required which reflects the genuine amount of work that is required in managing a personal injury claim. We believe the suggested amounts achieve that aim.” The changes are set to be implemented in April 2013.
The consultation was not released publicly but was instead sent privately to stakeholders. Kennedys will publish its response to the Ministry of Justice on the closing date for responses on 4 January 2013.
LASPO elements to be reconsidered
On 15 November, Justice Secretary Chris Grayling said he “will not be afraid to reconsider” elements of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 “if it proves that what we have done has created a major problem”.
Grayling was speaking in the Commons in response to Labour MP Kelvin Hopkins’ concerns that changes to the rules on legal costs could negatively impact victims of child abuse. Grayling did not announce plans to make any changes but is adopting a ‘wait and see’ approach.
Increases in car insurance due to equality laws
On 13 November, responding to a question from Andrew Rosindell MP on how the ban on gender discrimination in insurance premiums could lead to increased costs for consumers, Transport Secretary Stephen Hammond said:
“We suspect that the impact of the judgment might in the short-term raise the cost of motor insurance for women drivers and give a smaller decrease for men”.
He added that the Government were working with the Financial Services Authority (FSA) and ABI on this issue and suggested greater use of in-car black boxes which, by analysing motorists’ driving style, could result in reduced premiums.
The ABI has since released their ‘key consideration points’ for consumers so that they are prepared for the advent of gender-neutral pricing, when it comes into effect next month.
Improving claims for mesothelioma sufferers
Responding to a question from Paul Goggins MP in Parliament, Work and Pensions Minister Mark Hoban said that Lord Freud was meeting with stakeholders in order to discuss proposals for a Diffuse Mesothelioma Payment Scheme. Goggins was concerned by the proposal to introduce a tariff scheme for untraced insurance claims but Hoban assured him the Government was working to improve the claims process for all mesothelioma sufferers.
Mistrust of whiplash and personal injury lawyers
A recent consumer intelligence survey of 1,500 people illustrates a growing mistrust of the claims industry. In the survey, the most popular words used by interviewees to describe claims lawyers were ‘annoyed’, ‘angry’ and ‘disgusted’.
When asked about ‘no win, no fee’, the most common terms were ‘money’ and ‘scam’. The survey also found that only 8 per cent of interviewees believe that the personal injury claims industry provides access to justice for all, demonstrating the sceptical attitude most people have towards the business. The survey was presented at the Motor Accident Solicitors Society (MASS) annual conference on 16 November by Ian Hughes, the Chief Executive of Consumer Intelligence. Martin Milliner, Director of Claimant and Technical Services at LV Insurance, followed the presentation with more criticism of the industry, describing the recent whiplash report by APIL as “propaganda”. Milliner pointed out that while the report highlighted a fall in whiplash claims over the last year, this was the first in five years (with 30% fewer accidents across that period) that resulted in fewer whiplash claims.