No win No fee witch hunt ... the winner loses


Ken Clarke the Lord Chancellor announced this week that the government were to implement many of the recommendations presented by the Jackson Review 2010. This blueprint document set out radical reforms which apparently are badly needed in the No win No fee litigation sector.

As a battle hardened personal injury litigator I can see why there is a need to reform. The disappointment for me is the complete failure once again for the pro personal injury lobbyists to compete with the insurance big wigs who pretty much call the shots at the Ministry of Justice. We have been trampled over and made to look like dead eyed sharks.

The main points are pretty radical.

At the moment when you pursue a personal injury claim, your solicitor will offer you a “No win No fee arrangement” which in short means they will take your case on without charging you if they lose the case. However the solicitor is entitled to a success fee in addition to base costs to reflect the risk they have taken in pursuing the case on a “no win no fee” basis. Both base costs and the success fee are paid by the defendant insurers if the case succeeds.

The claimant is also encouraged to take out an insurance policy that protects them if they proceed to court. This is known as an After the Event (ATE) policy.  The cover provided by the ATE basically pays the defence legal fees if you have a bad day in court and lose at trial. The ATE premium is also paid by the defendant insurers if the case succeeds – the premium is not recovered at all if the case fails.

The key change in the reforms reverses the principle that the loser pays. Instead, it is proposed that the claimant rather than defendants should pay lawyers success fees and cover ATE insurance costs in order to pursue their case.  Lawyers can charge a success fee against damages up to 25% of the sum awarded. Base costs can still be recovered from the insurers but the intention is to remove the current “free to claim” and “win 100% of your award” mentality that prevails in the market. To accommodate this radical move, compensation awards will be increased across the board by up to 10%. The idea being that the 10% increase ultimately cushions the blow suffered by the claimant in having to fork out the extra charges.

Once these reforms are made law, it will no longer be free to claim and successful claimants will no longer win 100% of their compensation award. Those days are gone.

So why do this..? Well the reasoning is simple. The government and the all powerful insurance lobby want to discourage claimants and lawyers from making – what they deem to be – frivolous and unnecessary claims. These are the cases that, they say, fuel the “compensation culture”.

So will this work…?   Absolutely not.

All that will happen is that lawyers will forgo the success fee in many low value cases and probably take on even more frivolous / risky claims to make up the difference. Seriously injured claimants will lose out twice over because they will be stuck paying up to 25% of much needed damages to their lawyer and then have to cover the cost of the ATE.

Pity those that are seriously injured and need to make a claim to cover much needed treatment costs and lost wages.

The industry will need to adapt and of course that’s exactly what it will do. The lost revenues will be made up in other ways and of course.... we will still as always be perceived as sharks.  

Whiplash Claim Advice ... watch out for the insurance company wolf in sheep's clothing

I am seeing more and more examples of insurance companies seeking to buy off road accident claimants with cheap nasty offers before they even get chance to seek legal advice.

The tactic is known in industry circles as third party capture. The objective of the insurer is very simple: to dispose of the claim quickly and preferably before the claimant speaks to a lawyer. The lie promoted by the insurers and supported by none other than the Association of British Insurers (ABI) is that they are putting money in the pocket of deserving claimants rather than paying out legal fees thus inflating claim costs.

This is pure bunkum! It cannot be right that insurers are able to shove money into the faces of hard up injured claimants and dangle the carrot of a quick and speedy settlement. Some insurance companies actually knock on the door of claimants with a chequebook in their hands to talk turkey.

In many instances this tactic goes badly wrong with injured people accepting settlements long before they have finished their treatment let alone recovered from their symptoms.

So watch out for this and report any abuse of the process. Our friends at APIL are only too happy to cross swords with the sanctimonious crowd at the ABI.

WARNING: Scammers could be trying to Hi Jack your law firms website and brand - A salutary tale

As a medium sized law firm in a hugely competitive field we have learned how to market ourselves on the internet extremely effectively. We are, in my not so humble opinion, ahead of the game.

Our web tentacles spread far and wide. We market on blogs, on niche websites and spend good amounts of dosh on search engine optimisation (seo: Google it, you'll be amazed how much you are missing out on!). We also use pay per click rather successfully and were very early ppc adopters starting in 2002 - how may law firms do you know who can say that..? 

Just reading that back you would think that we have every reason to be rather pleased with ourselves... you'd be right...we are.

This week however we had a rude awakening and if this can happen to sharp suited web hungry geezers like us - then it can almost certainly happen to you or your law firm.

Someone had hi-jacked our brand name and had created a website to mirror (not "scrape" but closely mirror) our own. It transpired that a Nigerian outfit had knocked up a site using our firms name in the url domain, they slapped a very poor grade copy of our logo image on there and effectively were masquerading as our firm. We received a tip off from an anonymous person who we suspect was either a disgruntled member of the scamming squad or more than likely someone who had fallen victim to a ruse backed by the site.

A little bit of research identified that the scam site contact address was the same  as the First Bank of Nigeria in London, a palatial pile - clearly bogus. The phone number routed to a voice mail and the enquiry form was broken which meant it was therefore unusable. 

Disppointingly, Google had ranked this site on page 3 for OUR brand name. Despite the site having no incoming links, not being registered in the UK and having no relevant content beyond a few rambling phrases. We had no idea how the site was being used but there can be no doubt it was doing our firm a lot of harm by being visible and purporting to be connected to our business.

Now as Ive already stated, we are no mugs when it comes to all things internet and we took less than 24 hours to get the site pulled from the web. However it did shake us a little and we were shocked by the lack of support and guidance available to firms in this situation. The Law Society and SRA were not particularly helpful Im afraid to say.

So here is a summary of the steps we took to pull the site and remove the threat to our business:

1) Firstly we checked the WHOIS of the site to determine who owned it and when it was first registered

2) We then checked the source code of the site to see if any trace of an identity had been left within the code - such as a company footprint, web design team, template ID or web link to another organisation. We found zip as it happens.

3) We searched Google/Yahoo/Bing to find out how deep the site had been indexed and whether there was any real threat to our brand name and reputation. This site was actually ranking for some of our branded terms. Not good.

4) We found out through the WHOIS that the site was hosted by a slightly dodgy looking firm in, of all places, Vietnam. This did not fill us with confidence - however we sent an email to the hosting company (there was no phone number) notifying them of the scam site and threat to our business. We politely suggested they take the site down whilst investigations continued - note: we did not make any threats, the email was forensic and well balanced. Any reasonable person would view it as such. We figured there was no point in blustering legal profanities at them - you could hardly play UK law games with a business operating from a bedroom in Hanoi.

5) We contacted Nominet who control the register for UK domain names. They were not helpful Im sorry to say. Crucially though, we took steps to escalate a complaint about the extremely apathetic response we received and we had a manager on the phone before long who assured us some action would be taken to pull the site - but not for 30 days. This is the standard time-frame they allow for site owners to respond to  any allegations. Nominets response was in the end pretty good - but we had to push and push hard to get anywhere. (You can reach their dispute team on tel: 01865 332211)

6) We spoke to the Law Society & SRA who were politely ineffective despite telling us this was a common occurrence. If it is a common occurrence - why is there no firm action plan to help law firms in this situation??

7) We could have written to the main search engines - Google in particular take scam sites seriously and would pull the site from their index if we persuaded them of the dangers. You can lodge such a request here 

8) We also phoned the Met Police who have a dept dedicated to this kind of fraud. They were not too interested and in real terms one cannot blame them. There are more serious issues out there than a spoof legal website.

9) As stated earlier, we tried calling the scam website number, sent an email etc but this was fruitless.

In the end, the most effective of these measures and perhaps the one that elicited the most surprising outcome was step 4) ... our friends in Hanoi. believe it or not they actually took the site down within 24 hours of our message. A very brief response from them simply read "phishing site taken down"...!!!

So after all our misgivings the one organisation we had the least faith in - actually delivered the best response.

How can you avoid this as a web business owner...? Truth is you cant. However I would urge all businesses to scan the web regularly for spoof sites and drill deep into say page 4 or 5 of Google to unearth possible threats. They may be out there and they may just be damaging your reputation.

I hope in relaying this tale that other businesses - whether they be law firms or not - can gain something from our experience. The world wide web is indeed wonderful ... but it can also be an untamed beast.

You live and learn...!

Employment Law Joke - Courtesy of Peter Kay

"My friend got sacked from his fairground job recently - he worked on the dodgems and really loved it.  He's suing his boss for for Funfair dismissal!!"


[The Tour That Does'nt Tour Tour 2011]

Solicitors.com

I dont often recommend legal websites - our firm owns a few and it would be just plain wrong to promote others when I dont even push our own. However when you come across a service that has probably the best domains in the business and actually looks pretty useful as well, it would be wrong not to give it a heads up:

If you are looking for solicitors online give www.solicitors.com a try. You could do worse and frankly I prefer these services to some of the Meerkat impersonators that have cropped up recently.

What will the VAT rise and the forthcoming period of austerity mean for the legal industry..? 

Tomorrow 4th Jan 2011 VAT rises to 20%. Any bills raised by your lawyer for privately funded work will be a little bit more expensive from now on.

Our firm has tried to be generous and we have processed as many bills as possible pre 4th Jan. There are some invoices that will be backdated for various reasons and the old rate may still apply. However from here on in - Law just got more expensive for every private individual in the UK.

Overall this year is going to be tight for the man on the street and that means that every professional sector will be hit hard. So whilst the VAT rise itself will not affect the legal industry, other factors certainly will:

• House prices and house sales are falling meaning less people will instruct conveyancing solicitors.

• Making a Will has never been a top priority for many people - volumes will now drop even further.

• Probate will be affected as people look for cheaper deals and there are much more affordable ways nowadays of administering a will 

• Family / Divorce lawyers will be affected as couples seek low cost methods to deal with divorce and separation.

When you add to that mix Oct 2011 and the introduction of Tesco Law and Alternative Business Structures (ABS) - this undoubtedly will be a difficult and very challenging year for the industry. When times are hard, as an employee or as a partner you need to look at your top people and management to determine whether the firm you are in actually has what it takes to survive the approaching storm.

If it doesnt and you think you deserve better - make a move now and seek a better position for yourself. Dont wait until the hurricane hits land.