Henry Bermingham, president of the Forum of Insurance Lawyers, is outspoken on the cost of personal injury claims and is critical of the delays in the proposed government reforms.
Henry Bermingham, a bespectacled and youngish solicitor with a fresh hair cut, hardly looks the villain. But due to the trend of spiralling insurance claims, he admits he has been responsible for closing down children’s playgrounds.
“I’ve actually sat in meetings with local authorities and said, well yeah, the kids do like the play area but if you haven’t got the money to upgrade it, as soon as one of them has an accident you’ll have to pay,” says the 37-year-old partner at Berrymans Lace Mawer (BLM) and current president of the Forum of Insurance Lawyers (Foil), which represents firms that work for insurance companies.
“The awareness of the possibility of claims is driving the thought of service providers and as a result that’s cutting down the number people who are prepared to volunteer, and limiting charitable events and activities that are fun. As a society we have to recognise there’s no such thing as a risk-free existence. Over the past decade the whole western world seems to have become irrationally averse to risk.”
He does not think insurers are guilty of scaremongering, saying: “Look around you. It’s picking up a cup of coffee that says, ‘contents hot.’ Well I didn’t want a cold cup of coffee, thank you very much.”
But while social trends are his passion, personal injury and pleural plaques are two of the key areas taking up his time. And he is adamant that the current personal injury system cannot continue.
“We’ve got a system that rewards inefficiency. When 43p in the pound of insurers’ spend is going toward solicitors’ costs, the reality is that it’s back to the balance between you the policyholder and you the claimant. You the policyholder are spending £5,000 for the solicitor to recover £1,500.
“A fast-track run to trial costs an average of about £20,000. It’s astonishing how much money is being claimed on that side, so it has to change.”
Bermingham steps down as president of Foil in November, and is starting to wonder whether the government will have introduced the reform of the personal injury claims process by then.
The reforms, which are supposed to fast-track the claims process and introduce fixed fees for solicitors, are long overdue. As Insurance Times went to press, the Ministry of Justice (MoJ) was still declining to name the date for publication, having already missed several self-imposed deadlines. There is growing concern over whether the proposals will be delayed further, or even abandoned. The powerful trade union lobby has made its opposition known, as it benefits from the current system, and politicians have listened.
“We’re terribly anxious to know the result,” Bermingham says. “I took office in November and I was writing a presidential speech to set out my vision for the year. I had a space in it ready to process the review. Now we’re 20 days from the parliamentary recess and still, nothing.”
“The amount being paid by insurers for claimant solicitors is out of all proportion to what claimants actually recover.
He adds: “No business is going to make a long-term capital investment until it knows what’s coming, so you’ve had this hanging for nine, 10 months. There’s no satisfactory explanation. I know in Foil, if we had undertaken to deliver a major piece of project work like that, we’d be in hot water if we hadn’t delivered by now. It’s unhelpful speculation because it tends to entrench people.”
Bermingham believes the MoJ’s personal injury proposals offer a workable system but says the area of public liability needs tweaking.
“Thirty days to decide on liability in a public liability case is quite awkward because with a trip or slip, the defendant doesn’t know that an accident has happened until it’s reported. So, it would be difficult to reconstruct whether they’re liable or not. But in employers’ liability cases the employer will have an accident book. So if one of them sticks his head in the coffee grinder, the defendant knows about it straight away.”
Bermingham is proud of his lobbying efforts with Foil, which he joined in 2000. He became the regional representative that year and joined the executive as lobby officer in 2004, before being elected vice president in 2006 and president the following year.
“I’m a partner at BLM in Birmingham, so I can knock on the door of the MoJ and try to lobby. Or, I can do it as a representative of a whole industry group, and obviously government is much more willing to listen to the representatives of industry groups than the views of an individual law firm.”
The defendant solicitor sees the claims process as a balance between the interests of policyholders and individual claimants.
He says: “The split has been moving into sharper focus in the past four or five years as claimants’ costs have risen to what we would say is out of proportion to damages. And also the effect of high claims costs has become more and more noticeable in society. There are all sorts of examples of cases and risk averse behaviours that now exist as a result of the excessive cost of claims.”
Bermingham himself is risk-averse in interviews, refusing to be drawn on matters such as why he thinks the reforms have been delayed. He does predict that the bill on pleural plaques recently introduced by the Scottish Parliament will face legal obstacles, but he declines to go into detail.
As the representative of defendants, Foil obviously benefits from a close relationship with insurers, while relationships between insurers and claimant solicitors remain strained.
“If we are going to make a symptomless condition compensable, what symptomless condition should we go for next?
“The amount that is being paid by insurers for claimant solicitors is out of all proportion to what claimants actually recover,” Bermingham says. “And you have to look at it in terms of value added. What does the claimant solicitor bring to the equation and is that worth £4,000, £5,000, £6,000 in a case that’s worth £1,500 or £2,000?”
Meanwhile, the government has promised to consult on whether victims of pleural plaques – symptomless growths on the lungs, caused by exposure to asbestos – should be allowed to claim compensation.
Recently, the Scottish Parliament introduced a bill that says people with pleural plaques are entitled to make damages claims retrospectively, overturning a landmark decision in the House of Lords.
But to Bermingham, the case is cut and dried. “It’s basic law. In a personal injury case, you’re awarded compensation for pain, suffering and loss of amenity. If you have a completely symptomless condition that you can’t see, and you didn’t know about it until you were contacted by a helpful solicitor who offered you a scan, and then showed you the results, what is there to compensate?”
He warns that Scotland’s bill could set a dangerous precedent.
He says: “If we’re going to make a symptomless condition compensable, what symptomless condition should we go for next? Why should this group of people with no symptoms be more special than anyone else? Why should they get money?”
Meanwhile, Bermingham is also concerned with issues specifically affecting Foil. He says the membership remains strong but he is taking steps to ensure fresh blood keeps coming in, by conducting more meetings with the membership.
“Over recent years we’ve observed consolidations in our own marketplace,” he says. “For example, Kennedys and Davies Lavery have just merged. This means what we’re starting to see is a slight disconnect between the executive of Foil and its members, and I wanted to bring that back and put Foil back in touch with its members.”
Bermingham has heavy industry involvement as Foil president, balancing this with his own clients at BLM and serving as a member of the Matlock Round Table.
But while he enjoys working with Foil because of the influential people he meets and the chance to directly affect the market, he is also looking forward to spending more time on his hobbies of skiing, motor sports and watching live music. Or maybe just taking a breather.
“It’s an education and I’d recommend it to anybody. Come November I’ll be disappointed to put it down, but on another level I also need a sleep,” he says.