The Taskforce’s recommendations – a step in the right direction
Following the implementation of section 57 of the Criminal Justice and Courts Act 2015 on fundamental dishonesty, and in the light of the Insurance Fraud Taskforce’s final report, the impact of fraudulent claims and the desire to penalise claimants who present them has clearly been on the government’s agenda.
It is clear that a significant proportion of claims presented, for example many noise induced hearing loss claims, are suspected of having no merit from the outset, a belief supported by the speed with which they are withdrawn when challenged.
The Civil Justice Council’s proposals on the extension of fixed costs into noise induced hearing loss claims, combined with the proposals of the Insurance Fraud Taskforce, should see a reduction in the proportion of unmeritorious claims presented in the future. Unless the claimants and the professional enablers of their claims face substantial penalties, dishonest claims are unlikely to be deterred.
Employers’ liability following section 69 – has the playing field been levelled?
This should be the year in which we start to see the extent to which the Enterprise and Regulatory Reform Act 2013 has changed the landscape of employers’ liability claims. Section 69 of the Act, which provides that breaches of health and safety regulations committed after 1 October 2013 do not found an injury claim unless they expressly state that they do, was predicted by some of its opponents as a return to the days before Groves v Lord Wimborne, the nineteenth century judgment which established that legislation protecting safety in the workplace can give rise to an action for breach of statutory duty by a person for whom the protection was intended.
As health and safety standards have improved, the standard against which negligence will be measured will often be akin to that imposed by statutory duties. As the third anniversary of the legislation coming into force passes, more and more cases to which it applies will be brought before the courts.
Brexit may see the Act have further impact as, at present, employees of emanations of the state have the ability to found their claims on breach of directives. The result has been described as ‘two-speed justice’, as such employees may have valid claims where others do not. On leaving the European Union, the directives should cease to have direct effect on emanations of the state, removing the entitlement of employees to rely on them in personal injury claims and levelling the playing field for all claimants.
Unexpected consequences of the Autumn Statement
The Chancellor’s 2015 Autumn Statement showed the intention of the government to increase the small claims track limit for personal injury claims from L1,000 for pain, suffering and loss of amenity to L5,000.
For many years, awards for pain, suffering and loss of amenity of less than L1,000 have been rare, and the concern is that the increase in the small claims track limit will lead to an increase in court awards to bring the majority of claims above the L5,000 base-line.
A second consequence of the increase is expected to be a rise in the number of unrepresented litigants and claimants supported by claims management companies, which may cause additional work for insurers and an increase in litigation of unmeritorious claims.
The timescale for implementation of the reforms has been delayed by the Brexit referendum, but indications from the Ministry of Justice are that the reforms will proceed.
Changes in the claimants’ solicitors’ market following LASPO and the Portal
The viability of some legal firms is threatened by a series of changes reducing revenues. The non-recoverability of success fees, the extension of the Low Value Protocols and fixed costs in personal injury claims have reduced the fee income of claimants’ solicitors significantly since 1 April 2013.
Some firms have sought to preserve their profitability through moving into areas of work without fixed costs, for example noise induced hearing loss and clinical negligence claims, whereas others have sought to gather up group litigation in order to maximise the number of claims presented. Other firms have sought to force claims to drop out of the fixed fee regimes or to recover success fees in claims they acquired following the Legal Aid, Sentencing and Punishment of Offenders Act 2012.
The coming months could see more firms fail, the risk to claimant and defendant businesses being illustrated by the problems some firms have suffered recently.
Key developments in 2015/16