The Economics of Access to Justice…
The legal sector and the world of maths have often sat across the table from one another like family members at a Christmas dinner who don’t get on. There is a grudging respect as there has to be but little by way of co-operation.
Never has this been more apparent in the current climate of ever decreasing Claimant costs, particularly via the MOJ portal.
This has now reached a tipping point where economics now dictates how insurers deal with third party claims rather than the legal obligations. The result is that the adversarial system is no longer a level battlefield as Claimant Solicitors are fighting with swords and Defendants are fighting with cannons.
The most disappointing thing about it is that the Court system should be the ones handing out the weapons at the start of the battle. The weapons are handed down to them by Government and unanimously this has been weighted to providing Defendants with the greater arsenal.
This is plainly evident in the stunted small claims procedure following the increase of the small claims limit to £10,000. We are seeing vastly increased numbers of small claims proceeding through to a final hearing or settling on the steps of the Court due there being no financial incentive for Defendant’s to address claims at an earlier time. The increase in Court fees and the average length of time it takes to resolve a small claim is costing Claimants significantly greater legal fees while Defendant Solicitors invariably work on a fixed fee basis. A Court system, perpetually complaining of being bloated by too much work, has only added to their woes in not creating an applicable punishment for a Defendant not abiding by CPR and narrowing issues.
This is anti-justice but has now reached a point of punishing the common man and not just the Claimant Solicitors sat in their ivory towers thumbing through wads of £50 notes.
It is regular practice for insurers to consider the merit of a claim at first submission via a CNF on the grounds of the Claimant injury presented and the likely position of liability. Where economics begins to dictate this process ahead of the MOJ Protocol and the CPR is when liability is likely to be an uneven split.
Emergency vehicle accidents are a simple tool for explaining. When emergency vehicles are involved in accidents while proceeding to an emergency it is almost never the case that liability falls 100% in favour of one party. Often there will be a 10% or 20% contributory element by one of the parties. Stay with me through this. Joe Bloggs is driving his car. He gets hit by a Police car attending an emergency. The case law suggests Joe Bloggs will get 80% liability in his favour. He has a relatively minor 1 year whiplash type injury. John Smith as the driver of the Police car bangs his head in the accident, experiences post-concussive syndrome that will be there for the rest of his life.
The insurers for the Police will weigh up the economics of disputing liability and running the matter to trial against the economics of settling Joe Bloggs claim via the Portal at Stage 2.
We don’t have to speak to our Maths cousin across the table to know what the economics will answer in this situation. This leaves John Smith with a life long injury of which he should have been able to receive general and special damages proportioned at 20% following the accident but will be prejudiced from bringing this claim by his insurers who wrote into his contract of insurance a delegated authority to deal with claims and simply crunched the numbers.
And before we can say anything, the Turkey has been put on the table and our maths cousin has got a full leg in his hand and we’re left with sprouts and stuffing.
Economics have won and they are hoisting a Defendant flag.
To read Philip Coupe’s article in the Modern Law Magazine please click here and turn to page 61.
For advice or a no obligation chat contact our RTA/PI Team on 0161 832 4666 or email [email protected]Back
Nick is the managing partner here at Glaisyers. Nick promotes a philosophy where all who work for the firm go the extra mile and are open, honest, caring and down-to-earth. Nick is also head of the commercial litigation team.
Nick Johnson - Managing Partner
To discuss how Glaisyers can assist you contact Nick Johnson on [email protected] or via 0161 832 4666.