The challenges ahead – October 2018
As the Civil Liability Bill moved to the brink of royal assent this week, I wonder whether anyone has any idea of how claims will operate on a day to day basis for LIPs or practitioners post implementation? The devil is often in the detail and those civil servants jaded by the complications of Brexit best strap themselves in for a crash course in the Civil Procedure Rules, Protocols, Portals and the vagaries of personal injury claims. Watching the debate in the Commons this week it was clear that many of the MPs had no clue as to how injury claims work, and a few of the challenges that lie ahead are discussed below.
Rules and Portals
When discussing the likelihood of a Portal being ready, it is important to distinguish between a piece of software being built and the claims process on which it is based. As demonstrated in 2010 it is entirely feasible to develop an IT system, but as we learned the hard way it is almost too easy to implement an inadequate process. To my knowledge, very little consensus or progress has been reached on this despite numerous stakeholder meetings and steering groups. Eight years on, debates still rage between claimants and defendants as to the technical operation and costs consequences of the MoJ Portal. It took insurers seven years and multiple appellate level decisions to understand how to properly reply on that system, and we still see defendant representatives, and Courts, perplexed by the concepts of exit points, sealed envelopes and one figure being higher than another. Now we add in liability disputes, ADR (who is providing, administering or paying for that?) and an entirely new costs landscape.
Practitioners and LIPs also face the ungainly prospect of multiple Portals. Does the MoJ Portal continue for claims between £5,000 and £25,000? Do you start in one, move to another and then get knocked back down by a Judge deeming conduct as unreasonable? From a practical point of view for firms continuing in this line of work, A2A system development will become more complex and harder to manage operationally. Answers to these questions are achievable but require an enormous amount of time, knowledge of these systems/protocols and hard work to be delivered in the timeframe suggested.
Rules of Evidence, Res Judicata and full and final settlement
The obvious point is here what does a LIP know about Latin phrases. However, the issue is an important technical one to overcome. What happens to the LIP who submits an injury claim through the new Portal, but has additional expenses such as a policy excess or a repair/hire outlay later down the line? Do the traditional principles apply or will the rules be more flexible allowing different elements of a claim to be pursued separately? The latter would be a significant departure from existing practices and be a source of much debate in itself.
The rules of evidence would need to be carefully considered. Following the Supreme Court’s decision in Barton v Wright Hassall LLP [2018] UKSC 12, it is hard to see a more lenient approach to LIPs. There are strict rules and time limits for the exchange of evidence on the MoJ Portal, and we are bringing in a large number of liability disputes which currently have carefully marshalled fast track disclosure. The difficulty is blending this with the free for all that is the Small Claims Track. Part 35s and Part 18s, a real favourite of the Defendant Solicitor in the sub 5k LVI bracket, surely have no place in the future scheme. I presume the evidence rules will remain strict but sadly can see many ill-advised litigants being denied damages for want of understanding how to prove a claim.
Costs and QOCs
As alluded to above, disputed liability claims in the sub 5K bracket are dominated by arguments of Low Velocity Impact and Fundamental Dishonesty. Whilst a Claimant has no legal costs to gain in this new regime, is it possible they have nothing to lose either? These claims currently have costs sanctions for failure to beat an offer, Part 36 offers to create risk and incentivise settlement. In a small claims world with no costs and very limited costs sanctions/risk where the above principles might not exist, does it become a free for all that encourages spurious claims to press on with an unintentional increase in fraud as a result? Or conversely will we see rules that load the deck significantly in the favour of the insurer thus prejudicing access to justice?
Love it or hate it, the fixed recoverable costs regime was brought in thanks to Jackson’s meticulous preparation and consideration of issues, talking extensively to practitioners along the way. That level of expertise and time is required here.
Policing Behaviour
Many fear smaller insurers will seek to game the system with routine liability denials to discourage claims. Will any provision or body be able to deal with unwanted behaviour and the myriad of unintended/unforeseen consequences? There was once an MOJ Portal Behaviour Committee, but it remains to be seen whether this or a similar function would exist in the new regime.
Whilst the IT side of the Portal may be able to move quickly enough over the next 11 months (in time for testing), it is a significant challenge for stakeholders and the CPRC to overcome these and many more issues at the same pace. I am confident that those involved are aware of the issues and the challenges ahead and have the skills to meet them. I sincerely hope that the civil servants take heed though and listen to those with experience, and if it takes more time to get it right then it is time well spent.