Participants at our recent claims event set out their vision for workable reform
Andrew Parker, head of strategic litigation, Beachcroft:
Parker called for more clarity around impending reforms of the fixed costs regime for claims. It is widely expected that the Ministry of Justice (MoJ) will extend its Road Traffic Accident Portal – which currently fast tracks motor claims worth up to £10,000 – to include claims worth up to £25,000. There are also suggestions that this could be extended to claims worth as much as £50,000. Parker believed this could potentially be more problematic. “I do accept that cases in the £25,000 to £50,000 bracket may be more diverse. Some of them may be more problematic. But I think it’s possible. It depends what the appetite is,” he said.
He said there was an desire among both claimants and defendants to understand what rules needed to be introduced to stop people bringing weak claims.
“I think it’s one of those areas where both sides can work together to achieve a result that is more workable, because I think we probably want the same thing. We want genuine cases to go through and we don’t want spurious cases to be put into the mix.”
Craig Underwood, director of legal services, Minster Law Solicitors:
The Jackson reforms brought many opportunities for claimant solicitors, said Underwood. “I see that the advent of further fixed fee regimes and efficiencies as an opportunity. The only downside I see is the potential discouragement of legitimate claims,” he said.
He added that certain reforms such as qualified one-way cost-shifting would be difficult to implement because the details around how they would work in practice remained unclear. “Therefore, it’s difficult to see the same pace of change that was employed during the MoJ reforms and how something like qualified one-way cost-shifting is going to be implemented easily, if at all, and within what timescale,” he explained.
He said that the regulation of referral fees needed to improve but added that such costs were common throughout the sector and beyond. “I think the way that it’s done currently within the marketplace is slightly seedy. But you don’t have to look too far outside of the legal industry to find that sort of thing going on, particularly in the health insurance sector. I think that payments to customers should be subject to the same very high standards of regulation and I think the problem at the moment is that they’re not.”
Duncan Hockley, managing director of international insurance broker H W Wood Ltd:
The Jackson reforms posed concerns for brokers as well as insurers and law firms, argued Hockley. He pointed out that the reform of qualified one-way cost-shifting would need to be looked at carefully and that his biggest concern about the Jackson Review was the possibility that it could lead to a spate of spurious claims. “I think there’s still going to be the risk that insurers will run shy of taking things to court because they’re scared of the cost implications.”
He said that many brokers resisted the lure of referral fees. “Not all brokers do actually take referral fees. Our company has made a stance not to do that. One of the reasons for that, in our experience, has been that sometimes there is a lack of control over the law firms taking the referral fees and it sometimes does not enhance the customer experience,” he said.
A ban on referral fees would not have a massive impact on brokers, added Hockley. “I don’t think there is going to be that many brokers who would be devastated if they were to totally abolish referral fees. There will be some that will have to rethink the way they do their business.”
Searching for solutions
“We are slightly confused because we just need answers, I guess, and once we find out those answers then we know what the playing field looks like and then we can move forward from there.” Don Moore, vice-president of sales, Enterprise Rent-A-Car
Attention to detail
“The devil is in the detail and if we don’t get the detail right, we’ll end up with a system that’s worse than the current one.” Ray Fisher, personal injury claims manager, Zurich
“I think it is a broker’s job to be there to provide front service to your clients and make sure they’re happy and to try to provide for them without having to be bound to a particular provider, whether a solicitors or anybody else.” Tim Shadrach, head of claims, James Hallam Insurance Brokers