Written evidence from the National Accident
Helpline (AJ 25)
1. National Accident Helpline (NAH) is pleased
to respond to the Justice Committee's inquiry into Access to Justice,
focusing on the Government's green papers on legal aid and the
implementation of Lord Justice Jackson's proposals regarding civil
litigation costs. We would also be delighted to provide further
details of our submission through oral evidence if required.
INTRODUCTION TO
NATIONAL ACCIDENT
HELPLINE
2. NAH is the UK's leading free advisory service
for people who have suffered an injury as a result of an accident.
We help these people seek financial assistance to aid their recovery,
through our national solicitor network of over 200 specialist
solicitor firms, our panel members, from across the country (including
Scotland and Northern Ireland).
3. NAH is authorised by the Ministry of Justice
(MOJ) in respect of regulated claims management activities and
is a registered company, incorporated in the UK. Furthermore,
we have a strong track-record of working with the MOJ to restrict
the "cowboy" practices which give our sector a bad name.
In December 2010, we reported three rogue firms for bad practice.
4. NAH was formed in 1993, in advance of both
the introduction of conditional fee arrangements and the Access
to Justice Act. We were formed by a group of solicitors who saw
the economic advantages of pooling resources and advertising through
a national brand to help people frightened of approaching solicitors
directly to obtain advice and, where appropriate, pursue their
rights to claim for personal injuries suffered by them.
5. The NAH model is significantly different to
arrangements that operate in other areas of the personal injury
market and that involve referral fees. The NAH model is a pooled
marketing model, rather than a referral model. Indeed, this distinction
was recognised when NAH was established in 1993 at a time when
referral fees were not permitted in the legal system. The Law
Society has recognised that the NAH model did not involve referral
fees and that our pooled marketing arrangements are different.
6. We are proud of our Customer Charter, which
goes above and beyond existing regulatory frameworks and has been
designed as part of NAH's wider campaign to champion the consumer,
demystify the compensation process and remove the barriers to
justice. The Charter guarantees that NAH will only help genuine
claimants and will never cold call or pass on details to other
organisations, as well as reaffirming its commitment to allowing
customers to keep 100 per cent of their compensation.
7. NAH received around 195,000 enquiries in 2010
from consumers who were accident victims and who wanted advice
and help on what to do. Of these, our legally trained call centre
staff referred 62,000 to one of our panel members with a geographic
or specialism link to the consumer, filtering out 68% of claims
as either unlikely to succeed or spurious.
THE JACKSON
REPORT AND
ITS IMPLICATIONS
8. Our submission addresses the final two parts
of the Committee's inquiry:
Do the proposals to implement the Jackson report
recommendations on civil court funding and costs adequately reflect
the contents of that report?
What are the implications of the Government's
proposals?
9. In analysing any recommendations of reform
in the area of civil litigation costs, National Accident Helpline
takes as its starting point nine broadly-accepted, core principals
of justice in personal injury cases:
The Nine Principles of Justice in Personal Injury
Cases
(1) Accident victims deserve the right to seek
redress for injuries caused to them through the negligence of
another party, regardless of their financial means.
(2) Financially vulnerable claimants should not
be deterred from making a legitimate claim on the grounds of any
potential cost, whether known or unknown at the start of the claims
process.
(3) Successful claimants should be entitled to
the entirety of any damages received, in order to help them move
on with their lives following their injury and provide full restitution
for the damages caused.
(4) Claimants should be entitled to the same
high standards of service and legal representation from all types
of organisations, solicitors and bodies representing accident
victims.
(5) Defendants in personal injury cases should
be able to dispute claims that they believe to be false or without
legal merit.
(6) Successful defendants in personal injury
cases should not have to pay any claimant costs.
(7) The application of justice in personal injury
cases involving public sector defendants should not place overly-punitive
requirements on any party, regardless of whether they are an individual,
private organisation or public sector body.
(8) Public bodies who contribute to the rehabilitation
of the accident victim, such as the NHS or Department of Work
and Pensions, should be recompensed for costs incurred by the
party found responsible for the accident.
(9) The application of justice in personal injury
cases should not reward unnecessary delays, contribute to any
avoidable resource or cost burden for the court service, or impinge
on the rights of claimants or defendants in other cases to access
justice.
10. We assert that Lord Justice Jackson's primary
proposals will have a detrimental impact on a number of these
principles, and will serve to restrict access to justice for victims
of personal injury. We believe that, while the Government's green
paper deviates slightly from Sir Rupert Jackson's principal plans,
the core content of his missive is retained. Should the Government
decide to implement the primary proposals set out in the green
paper, accident victims, and particularly those from low income
families, will be victimised further by an unjust legal system.
11. Principle 2 is particularly violated by the
green paper's primary proposals in that the net effect of many
of them is to create a sense of the unknown from a claimant perspective
in terms of costs during the process. For instance, proposals
around qualified one way costs shifting are unclear as to who
would qualify, leading to significant fear among potential claimaints
that they would be lumbered with a big legal bill. Any fear of
having to pay costs, and uncertainty around what these costs might
be at the start of a case, will prevent claimants from seeking
the redress they deserve.
12. Among claimants, the fear of legal costs
is already a substantial contributor in determining whether or
not to take forward a claim. In September 2010, the National Accident
Helpline published a report, The Scale of Injustice: How the
British public is paying the price for the compensation culture
myth, exploring the British public's true attitudes towards
personal injury claims and solicitors, and their awareness of
legal rights. When asked, "What would hold you back from
seeking legal help for a personal injury?", a poll of
1,600 members of the British public gave the following results:
| What would hold you back from seeking legal help for a personal injury?
|
| I am worried about how much it will cost me in legal costs/fees
| 35% |
| Nothing would hold me back from making a claim
| 20% |
| Not sure how to make a claim/who to talk to
| 19% |
13. In the majority of cases therefore, the public's biggest
fear is that of legal costs. A recent survey conducted by the
National Accident Helpline, answered by 228 previous claimants,
resulted in corroborating evidence. We asked the sample, "If
you had thought you might have to pay the other side's legal costs,
could you have afforded to go ahead with your claim?"
The results were as follows:
| If you thought you might have to pay the other side's legal costs, could you have afforded to go ahead with your claim?
|
| I definitely could not have afforded to go ahead with my claim
| 70% |
| I probably could not have afforded to go ahead with my claim
| 18% |
| I cannot say if I could or could not have afforded to go ahead with my
| 7% |
| I probably could have afforded to go ahead with my claim
| 4% |
| I definitely could have afforded to go ahead with my claim
| 1% |
14. These two sets of data demonstrate that a substantial
number of personal injury victims will be put off from claiming
because there is a real concern that they will have to pay large
legal bills. This undermines two of the basic principles of justice
in this area, Principles 1 and 2 outlined above. If somebody is
the victim of an injury as a result of someone else's negligence,
they have every right to seek redress for physical and emotional
trauma caused—which will very often impact their lives financially.
Any system that instils a fear of claiming based around uncertainty
that the process will be even more financially detrimental than
the financial losses already sustained, is inherently wrong.
15. Furthermore, the proposals made by Sir Rupert Jackson
for reform of success fees will actually reduce the amount
of compensation received by the vast majority of successful claimants.
This undermines the most basic principal of justice—that
an injured person should be recompensed by the wrongdoer in order
to return him or her to the same position they were in prior to
the accident.
16. National Accident Helpline agrees that some reform to
the success fee system is necessary. But we oppose any proposals
to force claimants to pay solicitors' success fees out of damages
that are specifically awarded to compensate victims for burdens
that their injury has brought. Any such proposals contravene Principle
3 outlined above. It is also worth noting that claimant solicitor
costs are frequently dependant on defendant behaviour. We have
considered 143,834 cases from 2005-2010 where Allianz provided
an ATE premium to an injured claimant. Since Allianz operates
a staged premium system—whereby admission from the defendant
within six months of the policy inception date results in a reduced
premium—liability insurers are incentivised to deal with
claims efficiently and astutely. In fact, the evidence shown demonstrates
that in 75% of cases that are eventually lost or settled by defendants,
liability insurers failed to admit liability within the six months
of the policy inception date. In these cases the personal injury
protocol states that liability should be investigated and admitted,
where appropriate, in less than four months rather than the more
generous six months allowed to qualify for the discounted premium
under the terms of the policy.
NON RTA CASES: DISCOUNT %
| 2005 | 2006
| 2007 | 2008
| 2009 | 2010
| Overall |
| Discounted | 22% | 24%
| 26% | 27% | 25%
| 23% | 25% |
| Non Discounted | 78% | 26%
| 74% | 73% | 75%
| 77% | 75% |
RTA CASES: DISCOUNT %
| 2005 | 2006
| 2007 | 2008
| 2009 | 2010
| Overall |
| Discounted | 63% | 62%
| 62% | 61% | 61%
| 61% | 62% |
| Non Discounted | 37% | 38%
| 38% | 39% | 39%
| 39% | 38% |
17. This data illustrates the volume of unnecessary delays
in the system, entirely as a result of defendant behaviour. It
is wrong to propose that such behaviour—whether the result
of inefficiencies from liability insurers or of some other, more
cynical motivation—should impact on access to justice for
injured people. The proposals contained in the green paper are
a license for liability insurance to make litigation unsustainable
and uneconomic for claimants and their solicitors by deliberately
delaying the investigation and settlement of good claims. This
would undermine Principle 9, as referenced above, and impinge
on the rights of the claimant (and indeed add to the burden on
the courts) as a result of delay.
18. The implications of the Government's proposals to remove
recoverability of success fees also has a detrimental impact on
consumers, in that the system will become one whereby solicitors
can only afford to take on the most certain cases. Consumers with
good, but less straight forward claims will be denied access to
justice in large categories of personal injury cases. Solicitors
will no longer be able to fund the vital investigative and background
work that goes in to cases that do not proceed following the evidence
gathering stage. This process is vital in weeding out less meritorious
claims and saves the judicial system millions of pounds a year
in doing so (and contravening Principle 9 as outlined above).
It is also far less likely that solicitors will be able to take
on more complex cases, which by their nature tend to be more devastating
for the victim.
19. In reality, 75% of cases now operate on a fixed fee basis,
a number that is likely to rise to 90% should the existing RTA
claims portal be extended as is about to be considered in public
consultation. With this in mind, many of the Government's proposals
will actually only have relevance to a small percentage of personal
injury claims—those that fall outside the streamlined processes
which are planned to be in place by April 2012. Higher value claims
by their nature are more complex, which means that the damage
caused by the Government's primary proposals will affect those
who are injured the most severely and need adequate redress the
most.
Conclusion
20. National Accident Helpline
oppose the Government's primary proposals on the basis that they
will restrict access to justice for victims of personal injury,
dissuading tens of thousands of people from seeking the redress
they deserve from negligent parties. These people, who often come
from low income families and for whom a few thousand pounds makes
a life-changing difference, will have no course for assistance
in order to help them lift the financial burden caused by their
injury, an injury that is the result of another's negligence.
21. NAH would
be extremely happy to discuss these issues further with the Justice
Select Committee and would be happy to provide formal oral evidence
to the committee.
January 2011
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