Even after a decade’s worth a change in the personal injury arena, Tony Baker insists there is major work still to be done

Tony Baker, director at the Legal Expenses Insurers Group and director general of the Accident Management Association, says it is important to bear in mind what has happened in the last decade within the legal personal injury arena.

“It has been a decade of major change. On top of the Access to Justice Act and conditional fees, we have had recoverability of ATE premiums, fast track claims and fixed fees - all in space of a few years. We have had the Compensation Act and tighter regulation of claims management companies. We have had the creation of the Solicitors Regulation Authority (SRA), which promises to tighten up regulation of solicitors in the UK.”

Baker has welcomed elements of the consultation paper, specifically the small claims limit of £1,000, set timetables for action and standardised claims forms, though he wonders how the insurance industry will cope with the new forms.

He also approves of stipulations that no substantial work by solicitors be done or After the Event (ATE) recoverable premiums approved until liability is accepted or decided. “If you have liability accepted, that is the end of it – you cannot have the protection of an ATE policy.”

The paper also sets much reduced solicitor fees and a set success fee. “More reduced fees will come in – there is talk of them being as low as £600 or £700 – and that is because, in a simplistic way, you have made a statement. Referral fees are £700 and current costs are £1,400. Therefore, eliminating referral fees, the maximum solicitor award, or costs for handling a case, should be a maximum of £700.

“For liability admitted cases, a strict timetable is, again, very welcomed. That should ensure action agreements are completed much more speedily than at present . There is no agreement on quantum.”

Baker, when asked what will happen in the ATE market, said there is unlikely to be a significant reduction of capacity in the market, but that there could be consumer detriment and very serious damage to access to justice. “People will have to be able to get cover. They will have to be individually underwritten and there will have to be allowances made for challenges to recoverability for higher premiums.”

Who is going to be happy in all of this? Baker’s answer isn’t reassuring.

“The chief purpose in any reform or change is the interests of the claimant

Tony Baker

“I can tell you the legal expenses insurers are not happy. I can tell you that claimants will not be happy if they think about what is going to happen and the consequences for them.

“What will happen is that insurers will do much more work in-house and their party claims capture will be encouraged. There will be a big, big investment in that area by the insurance industry.”

He also warned that lower costs will result in less professionalism by solicitors, resulting in a factory approach whereby volume is everything. “You will need to be big, therefore, to survive. Not a very healthy picture.”

He was asked about third party insurance and defendants and whether they were going to be happy?

“I suspect not; they will not be reviewed in the responses from the ABI or from individual insurers, but I don’t think there is an earthly chance of them meeting the new deadlines on checking liability.

“It is great to have faster claim resolution and trim costs where they can be trimmed, but bear in mind everything that we do, and that the chief purpose in any reform or change is the interests of the claimant.”

And he warned: “The Ministry of Justice must rethink these proposals. They must take account of the representations they receive, particularly the representations from those involved in the day-to-day assistance of claimants.”