Walker Morris to close their PI department inside 12 months

Rather shocking news given the size of this firm and their history in the growth of the personal injury market. WM Solicitors are (it is reported) to shut their PI unit inside 12 months and will also be closing / selling their website Distinctly Legal to concentrate on "core services".

This will surprise many in the industry but when you consider the following:

-- Conveyor belt LEI work is being retained by the insurers utilising new ABS vehicles (didnt the SRA say that could never happen?)

-- Solicitors - even the biggest ones - cannot market PI independently on the same mass / volume level that they have enjoyed previously. Its just too expensive

Factor in the substantial cut in fees introduced by the recent reforms and for many firms you have a recipe for disaster.

We knew it was coming, well ..... its arrived.  

LASPO  - Six Months On

It’s exactly six months since the controversial reforms to the Legal Aid, Sentencing and Punishment of Offenders Act 2012 came into effect on the 1^st of April. Now that the dust has settled, what do industry figures really think of the changes, and what does the future have in store for the personal injury sector?

Find out what prominent industry figures Tim Kevan (ex-barrister, creator of the Guardian’s Baby Barista blog and co-editor of the Personal Injury Brief Update Law Journal (PIBULJ)), barrister Aidan Ellis, and Alan Kennedy (the founder of National Accident Helpline, the UK’s biggest personal injury claims company), have to say.

LASPO and its impact on personal injury claims

The 2013 reforms aimed at eradicating the UK’s so-called ‘compensation culture’, have been criticised by many commentators, including Labour Peer and shadow spokesman on legal aid Lord Bach, for limiting access to justice and for hitting those who are worst off the hardest. 

Tim agrees, saying his main concern is the “detrimental effect [the changes] could have on those who have been injured and have a legitimate claim, both in terms of the amount of money they might ultimately receive, and worse still on the more fundamental issue of access to justice. Some claimants may slip through the net if their claims are not seen as viable due to the balance of recoverable costs and risk”.

LASPO abolishes the recoverability of success fees from defendants in most personal injury cases, and means that success fees will be often be deducted from the compensation awarded. Tim points out that the “general principle for most damages in this country is that they should be compensatory”, in other words, putting someone back in the position they would have been in if the accident had not happened. Tim believes that this principle is undermined when costs which have been legitimately incurred by the claimant then have to be paid from their compensation, rather than by the wrong-doer's insurer. He adds “I fear that this may not be adequately compensated through the 10% increase in general damages for pain, suffering and loss of amenity”.

Aidan adds that the introduction of Damages Based Agreements for no win no fee personal injury claims could on occasion “cause serious ethical dilemmas for lawyers”, such as when advising clients on whether or not to accept an offer, as in some circumstances the claimant’s decision will have a “direct effect on whether and how much the lawyer gets paid”.      

So what does all this mean for those who believe they’re entitled to compensation? Is it simply not worth making a claim anymore?

Alan Kennedy from National Accident Helpline stresses that those injured and in need of compensation should not be put off by the LASPO reforms, but says because it’s likely claimants will have to pay some of their costs out of their compensation, it’s “now more important than ever that people choose an honest firm” with which to make their claim. Some firms will place a cap on the amount they deduct from the claimant’s compensation, whereas others will be less clear about their charges in the event of a successful claim. Similarly some firms may leave consumers exposed to litigation risk and ask for a payment of upfront fees.  “It’s critical that claimants understand exactly where they stand when starting the claims process”.

The future of personal injury claims - what will change in the next five years?

As Aidan points out, “five years can be a short time in litigation”. Already figures released by the Claims Management Regulation Unit (CMRU), reveal that the number of claims management companies fell by nearly 30% recently, with many companies closing because of financial pressure resulting from the LASPO reforms.

Tim, Aidan and Alan all agree that this trend looks set to continue, and that smaller high street firms in particular may struggle to cope. They expect to see lots of mergers as small firms strive to achieve the economies of scale necessary.

While acknowledging that consolidation within the PI sector is inevitable, Alan believes that there is also an upside for claimants, as the remaining operators will “have to be very tuned into consumer needs, and will, like NAH, have to provide consumers with guarantees around charges and risk as well as consistently high levels of expertise and customer service.

In addition, Tim expects there to be an increasing shift towards firms using online marketing, and the provision of some services online, as “if law firms get it right, they have access to an enormous market far more easily than before”.

Watch this space…

LASPO is just one of a number of issues currently affecting the personal injury sector, and it may be more than five years before the full implications of the reforms are known.

As far as the claimant is concerned, LASPO does not mean the end to access to justice. The reforms bring both advantages and drawbacks, but it’s clear that it’s now more important than ever that the claimant chooses carefully when it comes to selecting a solicitor, firm, or claims management company to handle their claim.

Personal Injury Referral Fee Ban

From the 1st April 2013 it is now illegal for a law firm to buy or sell personal injury referrals / leads in order to generate profit.

The official word from the SRA is here for those who havent read the prohibitive instrument in all its glory:

The personal injury referral business is worth hundreds of millions of pounds - or rather it used to be.

The end of the personal injury world as we know it
....and I dont feel fine

For those old enough to recall that lyric you may well have enjoyed a halcyon period as a personal injury lawyer but it seems that our world is changing forever any time soon.

Not content with the big hit on reforming the fee structure and banning referrals, the government now seem intent on hitting the small claims court limit which has been stable at £1000 for 2 decades or more.

More on the story here 

If these changes go ahead then the PI industry we know and love will not exist below a £5000 damages threshold.

I will keep you posted on developments

Meanwhile my conveyancing friends tell me things are picking up in the housing market. Who would have thought it 6 years ago that a conveyancer had brighter prospects than a personal injury lawyer..!!!

From April 2013 the personal injury world as we know it - changes forever

After months of jousting and posturing, during which time LegalSpy has kept his counsel, the fat lady has finally sung on the subject of the personal injury reforms.

From April this year the following rules come in:

Claimants must pay for their own insurance to protect them in any legal proceedings. Previously the insurance was recovered as part of the claim.

Claimant lawyers to be paid less than 40% of what they would have achieved in the current regime

Insurers no longer have to pay the claimants success fee which the lawyer would charge to reflect the risk taken in pursuing a No win No fee case. Now the claimant has to pay this out of compensation and in personal injury terms this will equate to 25% of damages.

Claims arising from road accidents, accidents on the street, public place or those occurring at work under £25k in value all now fall to be dealt with via a computerised system known as the "portal". The intention is to dumb down the process and buy claims off as quickly as possible. 

These measures may not sound too extreme ... but they are.

The whole industry has been turned on its head and the people who will suffer the most will be the injured accident victims. Why...? Because at the lower end of the spectrum the legal process will be geared towards speed and efficiency not client care or service. 

Sad times and unfortunately ... this is just the start.

PPI Radio Ad Banned for Using Scare Tactics

Without fail, every time we switch the radio on, our ears will be filled with the words “PPI” and “claims”, and not without good reason – you should reclaim what’s rightfully yours, it’s your money.

But what about when companies take it too far to get your attention?

PPI specialists Payment Protection Partnership recently took it a little too far, warning listeners that their “time is running out” to claim. 

The ad went on to ask “£2,000? £4,000? Just how much are you costing yourself…You could be in line for thousands, but only if you claim in time.”

Of course, this may have been somewhat over amplifying and the advertising watchdog, ASA, has banned the campaign for using scare tactics by “overstating the urgency for referring a complaint through PPP”.

In truth, although the banks are now pushing the FSA to set a deadline, this is not likely affect claimants until next summer, at the earliest. 

There is currently no deadline for claiming for mis-sold PPI, as PPI Claimline will tell you. And, even if you don’t have your paperwork, any reputable claims company (such as the aforementioned) will find it all for you.

So, if you had the scarers put on you after hearing that ad, fear not. There is no urgency to reclaim…although those few thousands you’re entitled to would be nice! 

Cerebral palsy sufferer keeps NHS payout

A Leeds family are celebrating after winning an appeal court hearing brought by the NHS. The case in my view illustrates all that is wrong with the approach taken by the NHS Litigation Authority (NHSLA) when defending claims against the medical profession.

Nathan Popple was awarded compensation of £5.5m by the High Court after he suffered devastating brain injuries during his birth. Now 14, Nathan developed cerebral palsy and severe disabilities. He cannot speak and must be fed through a tube as he is unable to swallow. However our friends at the NHSLA appealed the decision, telling the Court of Appeal that the brain damage occurred “some time remote from delivery” in the last three days of the labour. At the appeal court rejected this argument tank goodness.

Nathan now lives with his mother Beryl Sanderson and her partner in the Cookridge area of Leeds and they claimed to have spent most of the last decade, firstly trying to get the compensation they felt they were owed from Birmingham Women’s Hospital, and then fighting to keep it in the light of the case going to the Court of Appeal. 

For all the negative press that lawyers receive for pursuing such claims, it is entirely appropriate that the NHSLA are brought to account for adopting such an aggressive and in the end futile defence to an already complex injury claim.

Living and working as I do in Leeds, I am very pleased that justice prevailed for this local family.