This article first appeared in Modern Insurance Magazine Issue 28, December 2017
At a time when the MoJ is poised to embark upon a new round of “reforms”, it is almost timely that a review is taking place into the last major round of changes to the claims regulatory landscape. Unfortunately, any lessons learnt about the abject failure of much of the LASPO legislation may well be too late to impact the Civil Liability Bill, unless it is not published until after the review is concluded in April 2018. This could be another misdirected, poorly considered and deeply unfair piece of legislation reaching the statute books, without having considered the errors of the past.
Although delayed by the ‘snap’ election, the LASPO review is underway and key organisations, such as MASS, are currently meeting with officials to provide views. Our assessment of Part 2 on litigation funding and costs was pretty grim for the review team.
One of the primary Government objectives for LASPO was to reduce costs for insurers so that insurance premiums could be reduced for consumers. After a short period during which they did fall, they have increased dramatically hitting pre-LASPO levels again with seemingly no sign of any sustainable reductions.
With that main objective not being realised, other elements of LASPO can also be questioned. The absence of the costs of success fees and ATE have indeed benefited insurers financially, but at the expense of accident victims, from whose damages they are deducted. Accident victims rarely benefit from a 10% uplift in damages, and if they do, this is negated by the loss of recoverability. QOCS have undoubtedly been used by some legal practitioners, but they are often disallowed and there are a number of QOCS cases proceeding through the courts in an attempt to clarify their uncertainty. Third party capture remains unregulated and is still a significant problem. The related ‘fundamental dishonesty’ change has led to many genuine claimants coming under unfair pressure to cease a legitimate claim ahead of going to court. PI cases involving children have been particularly hard hit due to the Jackson reforms. The referral fee ban appears to have made little or no difference to those that wish to retain such relationships.
All of this, coupled with the reduction in legal aid, needs to be seen in the context of the wider impact of LASPO on the justice system and accident victim, to the detriment of access of justice. Five years on and it looks as if the mistakes of the past are about to be repeated. As they so often are.
Simon Stanfield, author of ‘Is progress being made?’ is Chair of the Motor Accident Solicitors Society (MASS) and a Partner at Simpson Millar