Examination of Witnesses (Questions 20-39)
GEORGINA SQUIRE,
ALLAN GORE
QC AND JAMES
SANDBACH
11 OCTOBER 2005
Q20 Keith Vaz: Who should make the
claimant think? Should that be in the literature or should it
be the District Judge?
Georgina Squire: I would have
thought if something were put in the literature of the claim form,
something like a health warning.
Chairman: There is, I think, something
there now.
Keith Vaz: Apart from that, you cannot
think of any new procedures that would help?
Q21 Chairman: We will give you the
opportunity to go back and think about it.
Georgina Squire: I will, absolutely.
Q22 David Howarth: It has just occurred
to me that one of the problems of doing that is that it will encourage,
in the end, potential defendants to look for ways of making themselves
judgment-proof. What would you suggest in the following situation
(which is actually a real case—it happened to a constituent
of mine): he got a judgment for £2,000 but it was against
a self-employed person, so an attachment of earnings did not work.
He tried a warrant of execution and found that the goods belonged
to the wife, not to the defendant; he had the same problem with
the charging order, that the house was in the wife's name, and
then having got to the third party debt order was told that she
could not find out which bank had held the accounts of the defendant
because that was private information and it was therefore a data
protection problem.
Georgina Squire: Sounds familiar!
David Howarth: Is there any way through
this? Are there any suggestions that people have come up with
in the past, as this is obviously a very familiar situation?
Q23 Chairman: As a supplementary
to the same thing, I was told it is not the court's business to
try to trace bank accounts; that is your job as the person who
has been given the judgment. If you have any ideas on any of this
do come back to us.
Georgina Squire: We certainly
shall.
Q24 David Howarth: Particularly on
the working of the third party debt order, which was offered as
a solution to a lot of these things and apparently has not worked.
James Sandbach: These are some
of the issues that the national enforcement service will need
to look at. There are proposals to establish what has been called
the national enforcement service. No doubt it will probably be
more of a virtual organisation but there might be additional capacity
there to address some of those issues.
Q25 Dr Whitehead: Returning to the
question of personal injury claims, the Better Regulation Task
Force did suggest the raising of the limit for personal injury
claims to £5,000 along with other routes in small claims.
Mr Gore, the evidence the Association of Personal Injury Lawyers
has submitted is that you think personal injury cases have no
place in the small claims court. I assume you are levelling that
with the fact that you would agree with the present £1,000
limit?
Allan Gore: Yes. We are not strongly
advocating the removal of all personal injury cases from the small
claims track. That issue was considered at another time during
the civil justice review that led to the civil procedure rules.
It was acknowledged at that time, in 1998, that special rules
were justified in relation to personal injury litigation and we
are not advocating a removal of those rules as they currently
operate, subject only to our endorsement of the European procedure
as a model for small value personal injury claims that may be
adopted across the board in the future. It is our position that
what justified that decision in 1998 remains true today; there
is an inequality of arms in relation to the conduct of personal
injury litigation that does disadvantage injured people compared
to those that are the usual defendants in that class of litigation.
That disadvantage is acknowledged in the evidence of the Association
of District Judges, and it is also supported by the Mori poll
to which we drew attention, identifying the reluctance of injured
people to pursue claims if they do not have access to advice and
representation. The Better Regulation Task Force, as I understand
it, did not in fact advocate the increase of the small claims
limit for personal injury litigation to £5,000 but merely
advocated that that was one of the issues that could be properly
explored. We do not dispute that exploration of that type of issue
is justified but we do submit, for the reasons set out in our
written submission, that an extension in the particular context
of personal injury litigation would be inappropriate.
Q26 Dr Whitehead: Yet, according
to the evidence that you have submitted, as it happens, the vast
majority—as you very helpfully pointed out—of personal
injury claims are under £5,000. You suggested 70% are under
£5,000.
Allan Gore: A distinction has
to be drawn for this purpose between the overall value of the
clam, which is what that research was directed to examining, and
the present jurisdictional limit in the small claims track which
looks only at the level of award for pain and suffering and loss
of amenity without any reference to financial loss. So there is
a sense in which the two questions invite a comparison of apples
and pears rather than comparing the same. The present limit relates
to the valuation of the appropriate award for the injury itself,
and the class of case that our research was drawing attention
to, where overall settlements were above that limit, are cases
where there was representation so that, by definition, there were
claims for in excess of £1,000 for the value of the injury.
Q27 Dr Whitehead: So, in fact, if
we bear in mind that, I think, there are only five types of injury
where damages even started out to be under £1,000, yet taking
into account the additional, as it were, inflationary costs, you
might say, by way of representation, that suggests a good number,
perhaps half, of the cases fall into the category of, let us say,
£1,000 to £2,500/3,000. Indeed, in the category suggested
by the Association of district Judges as a possible compromise
figure.
Allan Gore: I saw that interesting
reference to the level of awards suggested by the Judicial Studies
Board for personal injury cases. My understanding of the legal
position is that there is, in fact, no minimum sum that a claimant
is entitled to recover for injury or illness. Although the Judicial
Studies Board guideline figures may indicate what they do indicate,
they do not reflect the fact that there are no minimum limits
below which the court cannot award. So that, in that sense, we
would dispute that there are, in fact, only five classes of case
where as little can be awarded. Even if that were not the case,
as Ms Squire has indicated, the figures in the £2,000 to
£5,000 category are a lot of money to injured people. These
are sums that can have and do have a significant effect on their
day-to-day lives.
Q28 Dr Whitehead: I understand, perhaps,
the higher end, the £2,000-£5,000 but, as the Committee
noticed, I did not declare any interest as being a lawyer because
I am not one, so from a lay-person's point of view the idea of
£1,000-£2,500 would not suggest there are fundamentally
different notions of personal injury in a claim that is, say,
£1,500, £2,000 as opposed to £1,000, which the
Society accepts should remain within the small claims procedure.
What sort of injuries would that represent? Would the compromise
idea of £2,500, perhaps, retain the idea that people in the
higher brackets ought perhaps be represented, but actually put
cases that are rather similar together?
Allan Gore: It implies the level
of injury from which there is usually a full recovery. That is
not universally true. For example, in current litigation before
the courts the guideline figure suggested by way of provisional
award for pleural plaques in asbestos litigation is £3,500,
and this is a health concern that people who suffer from that
condition face for the rest of their lives. It may not be disabling
but it is something that is ever present in their psyche and affects
them, therefore, for the rest of their lives. So it would not
necessarily be correct to think that all awards at that kind of
level are for conditions from which there is a relatively full
recovery. I come back to the point that our research and evidence
suggests that if you increase the small claims threshold at this
kind of level it would act as an inhibitor on people bringing
claims that at the moment they do bring and they do bring with
conspicuous success. If that is an inhibition it will operate
adversely on the access to justice because it will operate to
prevent or disincline people to bring good claims for tortiously
inflicted injury that, at present, they can bring and do succeed
in.
Q29 Dr Whitehead: Conversely, in
terms of what one might say is the good administration of justice,
the evidence that we have received suggests that a non-contentious
claim, which might attract damages of, say, £3,000, will
have, routinely, £2,000 costs attached to it—ie, inflation
in terms of the procedures that have been suggested is getting
on for 100%.
Allan Gore: I think that is a
different question. That question, of the proportionality between
damages and costs is also being focused on perfectly properly
by the Better Regulation Task Force. Indeed, also, by the members
of the organisation that I represent and their usual opponents,
the insurance industry, in the sense that we are always actively
looking at ways by which the process can be simplified and the
costs involved in pursuing it can be reduced. But that is a quite
separate issue from the question of whether people should have
confident access to advice and representation in the knowledge
that they can recover costs, thereby promoting their willingness
to seek the compensation that the law is saying that they are
entitled to.
Georgina Squire: I think, from
a general perspective, not being a personal injury practitioner,
the way I would look at this is that a claim for personal injuries,
in terms of a legal claim, is actually quite a complicated claim.
It requires expert evidence. There are numerous different ways
in which people recover from injuries. It is fair to say, as Mr
Gore has already mentioned, that the large majority of defendants
in this area of work, uniquely, are represented because the claims
are being funded by insurance companies. That is primarily the
case, as I understand it. It is therefore quite a different type
of claim to any other sort of routine claim that one might imagine
would suitably go in the small claims track because those insurance
companies do have highly experienced lawyers, claims handlers,
claims assessors and people investigating those claims on their
behalf whose primary aim is, of course, to seek the lowest possible
level of settlement as far as the claimant is concerned. So all
I would say on this is whatever the ultimate decision in terms
of a level of appropriate damages for the purposes of cut-off
in the small claims, I think one should be aware of the fact that
there is an imbalance, and if one has an unrepresented claimant
trying to recover what to them is a very important amount of money,
albeit only £1,000 or £2,000 because of the impact on
their life, they are going to be up against someone who is infinitely
more experienced than them and, probably, with the benefit of
a lawyer.
Q30 Dr Whitehead: Is it not possible
to simplify the law procedure for the purposes of small claims?
For example, a statement from a GP rather than expert medical
advice and representation?
Georgina Squire: Potentially.
It would depend on the level of the problem. There are situations
where, say, for example, someone puts in a claim to an insurance
company, the insurance company sends someone round who says: "You
need a bit of physio. Take five or six sessions of physio. That'll
do. That's fine, isn't it? Sign the form. Thank you very much"—end
of claim, and then actually the claim develops into something
else and, of course, it has been signed off.
Q31 Chairman: If it is a broken finger
from which you have recovered fully you know that sort of thing—
Georgina Squire: Absolutely, and
that is the difference. It is where the level changes from the
broken finger to something that could have more, potentially,
long-lasting effects.
Q32 Chairman: If I calculate rightly,
the level has been at £1,000 for around 14 years. So if you
go on at the present rate you would eventually receive Mr Gore's
objective that you do not get any personal injury claims in the
small claims track.
Georgina Squire: I do not think
there has been much inflation.
Allan Gore: I saw the written
submission of the Norwich Union in that regard and their reference
to 1991 is accurate. However, in the meantime there has also been
a wholesale reconsideration of this issue at the time of the Civil
Justice Review conducted by Lord Woolf. Not only did that consider
the question of the general threshold for the small claims track,
but it also specifically considered, and indeed changed its mind,
in relation to the limitation so far as personal injury litigation
is concerned. So that although there has been no change since
1991 there was an acknowledged justification for the retention
of those levels in 1998. There has been, we would submit, relatively
little inflation since 1998 when those figures were last considered
and last revised. In that regard, if there has been any movement
it more closely approximates the sort of limitation that is suggested
in the European procedure where the 2,000 euro limit is suggested,
which if my arithmetic has not deserted me accords with about
£1,400 sterling today.
Q33 James Brokenshire: It seems to
me as if there are two approaches here. You can have quantum and
you can look at the complexity of the case, and quantum may not
necessarily be linked inextricably with the complexity of the
case. Is there any merit to taking a different approach when assessing
and actually looking at complexity rather than looking on the
actual quantum that you are likely to recover on that injury?
Georgina Squire: Very much. From
the Law Society research of the sorts of areas where, perhaps,
unrepresented claims could warrant some representation on which
they can recover their costs, I think complexity is the key. There
may be a very simple claim with a value of £5,000 or so,
which can easily be handled by someone on their own; they feel
perfectly confident and they can go through the court process
on the small claims track. Conversely, there could be a claim
of a £2,000 value which has complexities in it because it
is to do with things like building works, which is slightly more
difficult, where they could value a lawyer's assistance, and I
would strongly support that because I know that is the Law Society's
view.
Q34 James Brokenshire: So would you
say it is more a question of an assessment on the tracking and
not necessarily getting so hung up on the quantum or the threshold
level on the small claims track?
Georgina Squire: Yes. I think
something on that could be done through the allocation questionnaire.
Those of you who may be fully familiar with the litigation process
will know that when a claim is issued there is a decision made
almost immediately on allocation by virtue of the parties having
to fill in this huge form called the allocation questionnaire,
which is actually very difficult to circumvent and quite a lot
of lawyers find it quite difficult to complete, so I question
how unrepresented claimants find it. The Law Society is certainly
advocating a review of the questionnaire so that it is made more
relevant. One of the issues that could be brought into it is complexity
so that the judge then looking at the case can allocate more fairly.
Q35 James Brokenshire: I wondered
if Mr Gore had any thoughts on that, given that obviously he was
advocating very firmly that there should not be an increase in
the limit at all.
Allan Gore: That remains the position
of the Association. Can I add that complexity very often depends
on the eye of the beholder? What appears not to be complex to
me as a personal injury litigator who has been undertaking this
sort of work for over 25 years now may not be the same as viewed
from the perspective of the injured person who is forced to face
the decision about whether or not to claim. Indeed, with respect
to the perspective of the Association of District Judges, in that
respect I would venture to suggest that their perspective is similar
to mine and is based on experience. If you contemplate making
complexity the yardstick for this purpose it ought to be judged
from the perspective of the user of the services, namely, in relation
to personal injury, the injured person claimant.
James Sandbach: I think one further
consideration is how claims are settling out of court as well
and whether that has any bearing on where is the level for the
small claims track. At the moment, a large proportion of claims,
under £2,000, are simply settled out of court by the insurers.
I think, coming back to the costs of this process, when you start
to do research on low value personal injury claims we found, particularly
for the cases that were settling out of court, that it was not
always clear who was bearing the costs of this process, and that
particularly the claims handlers at a very early stage, before
anything was ever getting into court, were getting people to sign
up to insurance agreements—ie, consumer type agreements
to underwrite whatever the costs in the final process were going
to be. A lot of these products turned out to be very, very costly
to the consumer, and in a lot of those cases, in fact, people,
several years later, are still getting bills from their creditors
who have funded loans to take these cases.
Q36 Chairman: That is not covered
in your written evidence. If you wanted to add, please do.
James Sandbach: Certainly, yes.
Q37 David Howarth: I think we are
now at the heart of the matter, which is: what added value do
the lawyers bring? We have been talking all along about this,
but I suppose there are several more points to make. One is, how
much added value? One of the things we know from research is that
75% of people get some legal advice before making claims in the
small claims court. It might not be very much, it might be from
a variety of sources—and, obviously, the CAB comes into
play. So the question is what is the margin of effect in getting
more legal advice? I was wondering whether there was anything
in the research that shows anything about that—whether,
for example, represented claimants are more likely to win cases
that are contested or whether they are more likely to get a higher
settlement than those not represented? That is my first point:
is there any quantitative evidence of improvement in the position
of the litigant because of representation? I heard what you said
about perception but this is not about perception, it is about
whether it works. The other two points, I suppose, are these:
how would you respond to the, perhaps, cynical view (though this
is the view of the economic research in this field) that shifting
from the "each side bears its own costs" basis (the
American) to the English rule "winner takes all" has
two effects? One is to make people drop cases early when they
find out the risk of the extra costs and that especially affects
risk-averse claimants (and risk-averse claimants are usually individuals
whereas companies tend to be risk-neutral). So shifting from the
American rule to the English rule, which is effectively what we
are talking about, favours organisations against individuals.
The second point is that that move also causes people to invest
more in legal services if they are optimistic and have decided
not to drop. That is because the stakes are getting higher and
so it is worth investing more in legal services. So, of course,
the two legal representatives have an obvious interest in arguing
for the English rule to be adopted in as many cases as possible.
Allan Gore: Can I deal with the
first part of that question? We have in fact offered you some
quantitative evidence in our answer to the questions that you
raise. Firstly, in relation to the Mori polling that was taken,
which is referred to in our submission, that suggests that 73%
of respondents would be unable to work out the value of their
claim in relation to personal injury if left to their own devices,
and 80% of those respondents also felt that they would not be
confident that what they would be offered by insurers would necessarily
be the correct and proper level of compensation justified by their
claim. The second piece of quantitative evidence that we submitted
to you related to our own survey of our own members on the class
of cases and litigation, to which Dr Whitehead referred in the
questions that he asked me. In those responses we found that the
final settlement figure achieved in those cases, by and large,
was 50% higher than the level of compensation that may first have
been offered by the insurer on the other side. So that, insofar
as you asked the question: "What value do lawyers add within
the context of personal injury litigation?" we would answer,
firstly, "To inform and advise injured people as to what
their entitlements really are and, secondly, then to negotiate
the delivery of that in accordance with the advice that they have
been given". The public in that sense—the community
of injured persons—would lose if deprived of those services
in that way. You asked the questions of me as a representative
of the providers of legal services, but in fact the core aim of
the Association of Personal Injury Lawyers is to represent the
interests of injured people, and it is injured people that I speak
for in this regard, not lawyers.
Q38 Chairman: Ms Squire, perhaps
you would like to look at the same issues from the rest of the
area, not just the personal injury area.
Georgina Squire: Indeed. I have
not got any qualitative research to hand but I will certainly
refer back to the Law Society and if there is anything we will
submit it to you afterwards. In terms of what do lawyers bring
to the process, I think we as lawyers do bring to the process
value in terms of, as Mr Gore said, a proper assessment of the
value of the claim. Sometimes someone has a problem but they do
not know what to do about it and they do not understand the basis
upon which a recovery can be made. If they are a defendant they
do not whether they have a defence or not or whether they are
properly liable and they are, therefore, looking for guidance
and assistance in that respect. Then, secondly, assisting to negotiate
and compromise and resolve the claim in the most practical and
sensible way, using the court process or alternative methods of
dispute resolution—indeed any of the processes that are
available these days, and giving that sort of advice and achieving
the result. I think that is really what we bring.
Q39 Jeremy Wright: I know that in
what you have both said neither of you have mentioned advocacy
in the course of the court hearing itself. We know that District
Judges are supposed to take a very interventionist line on the
small claims track because they are supposed to do a lot of what,
perhaps, the advocates might do in other claims tracks. Is it
your view, therefore, that we do not really need lawyers to present
the arguments within the small claims track because the District
Judge's way of doing it is adequate to meet those needs?
Allan Gore: I am not sure that
I agree with that. I discovered in preparing for giving evidence
to you this afternoon the paper that was prepared for the Department
for Constitutional Affairs considering the position of litigants
in person and unrepresented litigants in first instance proceedings
by Professor Moorhead, which I discovered has now been posted
to the Department for Constitutional Affairs' website earlier
this year. It does draw attention in that regard to judicial concern
about departing from the role of what they call passive arbiter
in the process in order to provide for the equalising of the process
that you are referring to. They also draw attention to what they
report to be some judicial misgiving about that role and indeed
a possible inconsistency of approach and the questioning of whether
unrepresented litigants' interests are, in fact, being effectively
handled in that type of arena. It was posted on the DCA website
in February this year.
Georgina Squire: I think the small
claims track is there for a good reason, which is to allow people
to be able to dispose effectively and quickly with disputes. I
think the issues that the Law Society have are to ensure that
the right sort of disputes go there and that to the extent an
unrepresented claimant needs some representation they are able
to achieve it. I would not necessarily say that there is a need
for a lawyer advocate in all small claims cases as if they are
perfectly simple there is no reason why the District Judge cannot
deal with the proceedings and help them along. So I think my view
is perhaps more tempered in that respect.
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