Court of Appeal plans to review the 10% PSLA uplift of the Jackson reforms

The Court of Appeal decision in Simmons & Castle (2012) reminded me of that well-known Charles Dickens quote:

“The one great principle of English law is to make business for itself”.

The Court of Appeal is now preparing to re-visit its proposed solution to the 10% PSLA uplift aspect of the Jackson reforms and a hearing is provisionally set for 25 September. The Master of the Rolls, Lord Neuberger heard the ABI’s argument to intervene and concluded that “justice required the Court to hear the ABI’s application”. Both the Association of Personal Injury Lawyers and the Personal Injury Bar Association will also be invited to attend on 25 September and contribute to the debate.

Predictable discord

It is a pity that we have come to this position. The Court of Appeal in Simmons, gave a judgment of retrospective application which was neither aligned to Jackson’s wishes nor to a government that wants to see insurance premiums reduced. The ensuing discord was predictable, and the ABI has been forceful in its protestations and seeks a review of the wording.

This cannot bode well for the broader roll out of the Jackson reforms where Sir Vivian Ramsey has already been talking of various “anomalies” that will doubtless affect a smooth transition to a reformed claims process. The Forum of Insurance Lawyers (FOIL) believes that claimants and compensators alike deserve clarity on the reforms in order to prepare for change. Compensators in particular need this clarity in good time so as to ready themselves operationally and to inform themselves on key and sensitive issues such as pricing.

The government is still committed to implementing personal injury reform in April 2013. This is only seven months away, and the Ministry of Justice (MoJ) is still to deliver some considerable detail on various aspects of the Jackson reforms. Whether it be Part 36, qualified one way costs shifting or the scope and level of fixed costs, there is a long way to go before the reforms truly crystallise and compensators can understand what this new world is to look like.

I watched the cabinet re-shuffling with great interest and the emergence of a new MoJ team led by Chris Grayling MP. I do not share others’ dismay that our new Lord Chancellor is a ‘non-lawyer’, and hope that he brings a common-sense approach to the issues that face him and without the ‘baggage’ of a former practising solicitor or barrister. At the time of writing, I am unsighted as to which minister in the department is to be responsible for civil justice, and hence the Jackson reforms but he or she needs to re-energise the debate and get stakeholders to agree all outstanding facets of the reforms so that we all know where we stand.

Legal costs

FOIL believes that the key remains the level of legal costs – this drives all the behaviours within the current dysfunctional system and dictates the level of overall cost to the premium-paying public, tax payers and community charge payers. We await further detail as to the approach to re-populate the “Jackson Table B” matrix and again would urge the government to initiate progress as soon as possible.

Finally, it would be remiss of me this month not to mention the discount rate consultation paper. The key here is to truly understand how claimants invest their lump sum settlements and whether the anecdotal claims from the claimant lobby that claimants run out of money is really correct. Many claimant law firms now have sophisticated investment arm offerings, and it will be interesting to see whether they are prepared to “open their books” and show how they invest their clients money.  The claimant law firms declined to open their books for Jackson and so why, you may ask, would things be different this time around?

As a Bolton Wanderers fan, I approach this time of year with a sense of both anticipation and worry. As FOIL president looking at the Jackson reforms, I mirror those emotions. We have probably three months to sort the detail on personal injury reform. Let us hope that a new MoJ team will revitalise and re-energise the debate and drive the work on to a successful conclusion. Then, perhaps, we can put that Dickens quote to bed and, like the Wanderers (hopefully), move onwards and upwards.

Don Clarke is president of the Forum of Insurance Lawyers (FOIL)