Legal blog: What am I missing?

I recently took part in a debate for the Forum of Insurance Lawyers (FOIL) at this year’s Liverpool Law Society personal injury conference.

I’m old enough to remember when Law Society events were populated by claimant and defendant lawyers but this was an audience of exclusively claimant lawyers. Needless to say, my staunchly pro-Jackson contribution to a debate with the Association of Personal Injury Lawyers (APIL) didn’t have them leaping to their feet with applause, but you have to tell it how it is.

All lawyers, be they claimant or defendant, have to ensure that the legal process is trusted (that is, no fraud or bias), quick and cost-effective. I am far from convinced that our present system hits all three buttons. We must ensure that both injured claimants and defendant compensators look to the present system for solutions.

We still have a long, long way to go. The claimant lobby still relies on the three old chestnuts of “damages are not high enough”, “access to justice” and “polluter pays” to resist Lord Justice Jackson’s suggested civil litigation reforms. I have yet to find any hint of concern that they are operating in an arena where transactional costs are rising year on year, something that is simply unsustainable. Each of the old chestnuts has a fundamental flaw. Let’s take them in turn.

Damages are not high enough

The evidence used in support is the Law Commission paper of 1999. This argument conveniently forgets Heil v Rankin in which the Court of Appeal criticised the survey underpinning the Law Commission report and went on to say that, in assessing damages, the courts have to take into account the interests of claimants and defendants taken against the background of the society in which the court makes the award.

Given that the nation is in a parlous state and that there is no other justification for increasing awards why should we increase general damages save as Jackson suggests and as part of his interlinked scheme?

Access to justice

It is said that Jackson will restrict access to justice. I am not sure that this stands up to analysis either. It certainly does not have an explicit effect such as altering the burden of proof, for example. Ultimately whether or not an injured claimant has access to justice is down to whether or not a claimant solicitor will take the case on. In the legal aid era (1949 to 2000) there was a merits test and the burden in respect of lost cases fell on to the state.

In Jackson’s one–way cost-shifting future, the burden for lost cases falls on the claimant’s solicitor. I am not sure why anyone else in society should have to bear those costs. Why should the defendant? In any event, claimant solicitors still have hourly rates that are 20 to 35% higher than defendant rates, and a success fee in most cases.

‘Polluter pays’

This appears to be relied on by claimant solicitors as if it had been around since the Magna Carta and was enshrined in our legal system. It is relied on to say that damages are sacrosanct and there should be no deductions. It is actually a concept that arose in Sweden in environmental law of the 1970s. In short the State was getting fed up with cleaning up environmental spillages and said “if you make a mess you have to clear it up”. I am not sure how that is applicable to our legal system, especially when you think that from 1995 to 2000 it was perfectly normal for the claimant to have costs deducted from damages – still is today in commercial, employment and matrimonial cases.

The overall cost of personal injury litigation is too high. We in the defendant community have adapted our business models and taken costs out of the system year on year for at least the past 10 years. Over the same period claimants’ costs have increased, and are continuing to increase at above inflation and above the increases to the hourly rates sanctioned by the Advisory Committee on Civil Costs. Is it me, or am I missing something?

Dan Cutts is president of FOIL and director of insurance at Weightmans LLP.