FREE BOOK CHAPTER: An Introduction to Personal Injury Litigation (From 'An Introduction to Personal Injury Law' by David Boyle)

02/05/17. Personal injury law is ubiquitous. Whilst only a tiny fraction of day to day legal practice in this country, it differs markedly from other areas of law because those engaged in this sort of law often work on an industrial scale, even though most individual clients only have one claim and might reasonably hope to receive a bespoke service. The advent of cold calling, advertising, and publicity from, amongst other sources, the insurance industry itself, has ensured that people are more aware than ever of the possibility of claiming compensation for injuries suffered as a result of somebody else’s wrongdoing.

The insurance industry, unsurprisingly, feels that such claims have gotten out of hand. They have lobbied long and hard to reduce the cost of meeting such claims and have sought to avoid certain types of claim altogether. The politics of personal injury litigation are, with one or two exceptions, outside the remit of this volume. It would, however, appear that the decision to rename Plaintiffs as Claimants, in the Woolf reforms of 1999, gave rise to an increased perception of ‘Claims Culture’ (whatever that might actually be).

Could it be that a simply linguistic shift put in place a new mind-set about the morality of an industry which seeks to compensate people who have suffered injury? The word plaintiff undoubtedly elicits more sympathy than its replacement and this may be an example of the law of unintended consequences.

In any event, the concept of personal injury law is a simple one: Somebody (the ‘claimant’) suffers an injury to the person because of the wrongful (or ‘tortious’) acts or omissions of somebody else (the ‘defendant’) and brings a claim against them seeking monetary compensation which, in general terms, is designed to put the claimant back in the position they would have been in but for the actions of the defendant.

Of course, compensation rarely achieves that goal. It is not like for like. In minor cases, it is more of a recognition of the inconvenience of suffering from short-lived symptoms¹ , whilst in circumstances where there are permanent injuries (e.g. the loss of a limb) the money paid is not a magic wand, somehow undoing the injuries suffered. Given the choice between a cheque and going back to the pre-accident situation, most injured people would rather have the impossible. Lawyers are often accused of only being interested in money, but it is normally the only tool available.

Why is all this important? Society has, for many years, sought to protect its vulnerable citizens, providing a safety net for those who are injured, but that protection comes at a cost, and the resources of society are limited. A relatively low earner, whose financial contribution to society is predominantly to spend any salary received, is more easily compensated than the high earner, whose contribution extends not just to the income tax paid, but the jobs created, the salaries paid to others, the trade tariffs received by the government and so forth, but if somebody is injured and cannot work, there are significant ramifications, both for them and those around them, whatever their level of earnings and potential. If the person responsible can be identified and can be made to pay, why should the welfare state, which is designed as a safety net of last resort, have to pay instead?

Of course, the person responsible for causing the injury may not be in a position to make financial amends. Indeed, it is highly unlikely that he will be able to pay his victim’s wages and other losses out of his own pocket. There is rarely any point in suing a ‘man of straw’, because the purpose of personal injury litigation is not to wreak vengeance upon the tortfeasor – it is to reach an end point where the claimant is compensated and, with any luck, the lawyers representing him will be paid. For those reasons, the existence of an insurance policy is often as significant as any other factor in personal injury litigation.

At this point, it is worth considering what it is that insurance actually does. Most people have come across home policies, motor policies or life policies. In each case, the insured party pays a sum of money (a ‘premium’) to the insurer for a policy of insurance which will pay out in the event that a specified type of event happens at some point in the future during the period for which the policy applies. That payment out can be a fixed amount, but is more normally an indemnity – a suitable sum to meet all liabilities which occur as a result of the event coming to fruition.

There has to be an element of chance to the risk coming to pass (one cannot insure against Friday happening next week) and it is, in effect, a bet, with the insurer taking the premium in the hope that it will not have to make payment. The very nature of the risk is uncertain, but there are normally risk factors which are well known to the insured and which the insurer has to factor in, in order to ensure that the deal being entered into a fair one. For those reasons, contracts of insurance are contracts of the utmost good faith – an insurer which takes the view that its insured has not been honest or has failed to declare a material fact will often withdraw indemnity under the policy. The effects of that withdrawal of indemnity differ depending on the type of policy in question and those matters are considered in the relevant chapters. What is or is not a material representation is beyond the scope of this book.

In some circumstances, the law requires an insurance policy to be taken out to cover certain risks. If one is driving a motor vehicle, there is a requirement under section 143 of the Road Traffic Act 1988 to hold a policy which will indemnify the driver against third party risks – his potential liability to another person arising from his negligent use of that motor car on the roads. The insured can go further, and take out a fully comprehensive policy which covers the losses which he might suffer as a result of his negligent driving, such as the repairs to his vehicle, but that is an option, rather than a legal requirement. Because the likely payout is greater (because two cars are potentially the subject of a claim for repairs rather than one), the premium is normally greater too. The other example of mandatory insurance is employers’ liability insurance under the Employers’ Liability (Compulsory Insurance) Act 1969.

Against that background, the law limits the circumstances in which such a claim can be made. It limits the types of harm which can be compensated. It limits who can bring a claim. It defines what does and does not constitute a ‘tort’ or wrong. It allows an injured person’s compensation to be reduced for their own fault. It limits what an injured person can claim for, and it identifies, in certain circumstances, how much one might recover for a particular head of claim.

The existence of an insurance policy makes a personal injury claim a commercial transaction. Whatever each side feels about the merits of the case, the outcome is most likely to be an argument about the need to pay a sum of money and the appropriate amount.

That means that the two sides should approach personal injury litigation with straight-forward goals and rules in mind. These are my formulations of the respective raisons d’être of the two sides:

The rule of three for claimants² :

A claimant wants to get as much as possible, as quickly as possible, with as little risk as possible, but cannot have all three. That analysis should form the basis of all decision-making from the claimant’s perspective of the case, as long as one understands what is meant by risk. It is not merely the risk of losing and getting nothing, or failing to beat an offer. Whilst the word has negative connotations, risk is simply an element of uncertainty. Further evidence might clarify the future medical position for good or ill, but it reduces the risk, because the parties can be more certain of the outcome. Sometimes a decision has to be made at a point in time when the evidence is unclear. What is the effect of getting another scan? It might delay matters. It might show long-term deterioration which means that the case is worth more, or a lack of degenerative change which means that the case is worth less (albeit that that might be better news for the injured claimant). That is the ‘risk’ which has to be factored into the assessment, but for anybody advising a claimant, this starting point, with its visual reminder, remains an immensely useful tool.

The rule of three for defendants³ :

Defendants fight a case to trial for one or more of three reasons: To discourage the next claim, to resolve irreconcilable differences in the instant case, and/or a failure to appreciate that the case does not fall into one of the other two categories. From time to time somebody points out that cases sometimes fight because ‘the solicitors hate each other’ but, viewed closely, that tends to be a situation where both sides want to put down a marker for the next claim, their differences therefore become irreconcilable and they each then fail to realise that the case should be settled before trial, a combination of all three.

It is, of course, worth noting that whilst claimants tend to be individuals, invested in the outcome of the litigation because they have one chance to get the right result, defendants are normally represented by solicitors instructed by the insurance company. They have assessed the potential cost of the case, both in terms of damages which might be payable and the costs which both sides might incur. They are looking at the extent to which they can save on those potential liabilities. There is normally less emotion, not because the defendant is any less invested in the litigation process, but because, for the most part, the defendant has already reached the conclusion that personal injury litigation is a commercial transaction – a realisation which is harder to reach when one has suffered a potentially life-changing event.

David Boyle
Deans Court Chambers

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