Lord Philips gives industry weeks to agree on EL success fees scheme

Insurers have until March to formulate a workable success fees scheme for employers' liability (EL) claims or they risk having one imposed on them.

QBE Insurance complex loss team manager Mike Noonan said that unless liability insurers, trade union lawyers and representatives from the Association of Personal Injury Lawyers (APIL) and the Bar can agree on a structure for EL success fees by March, Master of the Rolls Lord Philips would set them.

Noonan told the QBE insurance annual conference: "If it can't be agreed by March and released to the public by the end of April, then it would seem that the mediation process has broken down."

But he said there was a "decent prospect" that an agreement could be reached.

Success fees are the amount an insurer pays to a claimant's solicitor in the event of a successful EL case. The level of these awards is currently determined by the courts and reflects a large part of the costs faced by EL insurers.

A scheme that established set success fees for road traffic accidents was developed in 2003 and talks sponsored by the Civil Justice Council on extending the scheme to EL began in January.

Noonan said that while the mediation had been "reasonably constructive", problems with generating accurate data on the failure rate of cases was causing delays. He said data from the DWP, insurers and solicitors all reflected different failure rates.

"The failure rate determines how much in terms of income the solicitors need in order to offer their services under Access to Justice," Noonan said.

He said that academics from Nottingham University were combining the statistics to try to formulate standardised failure rates by 27 February when the next mediation meeting is due to take place.

Noonan said that due to the complexity involved with EL claims, a system that had one success fee for accident claims and different success fees for different types of disease claims was the "frontrunner".

He said that, if determined by March, the success fees scheme could be up and running by the middle of 2004.