Claimant solicitors predict closures and redundancies as a result of Civil Liability Act reforms - Qamar Anwar, First4Lawyers

21/06/19. Over 100 PI (personal injury) solicitors responded to our annual State of the Market survey. Practitioners told us that the Civil Liability Act reforms will lead to a sharp contraction in the claimant personal injury market, resulting in firm closures and staff redundancies.

The survey showed that the changing PI market is already having a negative impact, with 42% saying their firm had seen profit decrease over the past year (it had increased for 30%), while 46% said cashflow had worsened and 40% had seen staff numbers reduce. Almost half said the cost of doing business had increased.

Though a significant minority expect these trends to continue over the next year, only 13% of respondents believe the reforms – including the increases in the small claims limit – will lead to their firm closing. Some 41% said they would have some impact, but their firm was sufficiently diversified to cope, while 21% said the lower small claims limit for non-RTA cases would allow them to adapt and survive.

All solicitors anticipated redundancies across the sector over the next 18 months, with most expecting plenty of mergers and WIP sales too, while the cost of marketing for non-RTA work would rise too.

After the reforms come into force in April 2020, 61% foresee a huge cull of law firms, leaving a small number of big practices, while many expect a new breed of claims management company to become the dominant handler of low-value work. An optimistic 21% said the profession would find a way to handle small claims, but two-thirds think insurers would then start pushing for yet more reform.

Asked how they expected claimants to react to the new regime, 59% predicted that they would turn to CMCs, while half thought they would either not bother claiming for smaller sums or insurers would pressure them into under-settling.

Those respondents whose firms handled clinical negligence work indicated that the last year had been tough for them too, although not as bad as for their PI colleagues. However, most expected their caseloads, turnover, profit, cashflow, staff numbers and investment in marketing to stay the same or increase over the next 12 months.

There was a widespread expectation that the outcome of the Civil Justice Council-led process to agree fixed fees for claims worth up to £25,000 would not be beneficial for either claimants or their lawyers, but it was still better than leaving it to the Department of Health.

Our findings paint a picture of a market in great flux. With just under a year to go until the reforms come into force, firms still have time to decide how they are going to face the future and adapt to meet the challenge.

In the short term, the deadline has already produced greater competition for work, adding greater pressure to the PI market in recent months as firms look to make the best of the current regime.

The overall message is that the claimant legal sector needs to plan how they are going to tackle this year and those to come in the future. The reality is that many claimants will still need and want their help, and we know that solicitors are looking at ways of delivering this in an efficient and effective way.

Ultimately, it will be in the public interest for the profession to continue to help injured people and ensure that insurance companies do not take advantage of them under the new unequal regime.

Qamar Anwar, is managing director of First4Lawyers , the UK’s largest independent legal marketing collective.

Image ©iStockphoto.com/sodafish

PI Practitioner, June 2019

16/06/19. Each issue a particular topic is highlighted, citing some of the useful cases and other materials in that area. You can also receive these for free by registering for our PI Brief Update newsletter. Just select "Free Newsletter" from the menu at the top of this page and fill in your email address.

In a case where a defendant has brought an unsuccessful counterclaim including a claim for personal injury, he can obviously claim QOCS protection in respect of the costs payable to the claimant attributable to the personal injury counterclaim. However, does his QOCS protection cut wider than this, so as to cover the whole of the costs order made in the claimant's favour against him? The issue arises in dozens of cases each day, and there are conflicting lower court decisions as to correct approach.

The resolution of the issue turns upon the interpretation of CPR 44.13:

"(1) This Section applies to proceedings which include a claim for damages [for personal injuries].
(2) In this Section, 'claimant' means a person bringing a claim to which this Section applies or an estate on behalf of which such a claim is brought, and includes a person making a counterclaim or an additional claim."

Does the term "proceedings" in CPR 44.13(1) refer to the case as a whole including the counterclaim? If so, the defendant will benefit from QOCS protection covering the case as a whole. If not, and the word "proceedings" is essentially synonymous with "a claim", such that the claimant's claim and the defendant's...

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Allen v Brethertons LLP [2018] EWHC B15 (Costs) - Claire Green, Association of Costs Lawyers

12/06/19. Costs Lawyers may generally operate behind the scenes, but a recent case in the Senior Courts Costs Office provides a useful reminder of our professional status and the important role we play in the resolution of costs disputes.

In Allen v Brethertons LLP [2018] EWHC B15 (Costs), Norman Allen engaged Checkmylegalfees.com, which is not a regulated law firm, to look at what he had been charged. A Costs Lawyer employed by the company, Kerry-Ann Moore, handled the work and at first the defendant law firm ignored her request for copies of documents from its file and instead wrote directly to the client.

In a footnote to his ruling, which dealt with an application to deliver a statute bill, Master Leonard pointed out that, as a Costs Lawyer regulated by the Costs Lawyer Standards Board (CLSB), Ms Moore had the right, in cases such as this, to conduct litigation and to exercise a right of audience.

“In correspondence with the defendant, she identified herself as such from an early stage and from the outset requested that the defendant communicate with Checkmylegalfees.com, rather than with the claimant directly.

“That seems to me to be consistent with the current provisions of the Solicitors' Code of Conduct (at chapter 11), which indicate that a solicitor should not contact a party directly where that solicitor is aware that that party has instructed ‘a lawyer’, defined in the glossary to the Code of Conduct to include ‘a profession whose members are authorised to carry on legal activities by an approved regulator other than the SRA’.”

Master Leonard said that while Brethertons may have had some initial concerns about its authority to release the papers, by the time it wrote directly to the client, there could have been “no mistake” about the claimant's wishes or Ms Moore's professional status, which it could have easily checked on the CLSB website.

He concluded: “Whether the defendant has complied with the code of conduct is not a matter for me, but I would offer the view that Ms Moore, when acting as a Costs Lawyer with a right to conduct litigation, is at the least entitled to expect from the defendant the same professional courtesy as a solicitor would expect. It does not seem to me that she has received it.”

It was vastly rewarding to us, as a profession, to have such clear and unequivocal confirmation of our status from such an eminent source. Many members of our association worked very hard to secure independent rights of audience and we expect our solicitor colleagues to show us the same professional respect that we show them.

But that was not the end of the story...

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