Against the background of a new fixed fees system, question marks hanging over the future of funding for personal injury cases, the compensation culture and everything that goes with it, Jason Rowley, president of the Forum of Insurance Lawyers, is striving for a more harmonious legal landscape, finds Marcus Alcock
There seems to be no respite at the moment for the Forum of Insurance Lawyers. Just as a ground-breaking system of fixed fees is introduced after years of wrangling, the country's largest claims management company - The Accident Group - collapses, throwing into doubt the future of funding for personal injury cases.
Add to this the continuing furore over the supposed growth of a compensation culture, concerns over increasing clinical negligence awards, and the issue of adopting a proper rehabilitation culture in the UK, and it is self-evident that defendant insurance lawyers are having to grapple with some of the meatiest political issues to hit the insurance industry for some time.
Jason Rowley, partner with law firm Vizards Wyeth and current president of Foil, is charged with articulating the concerns of defendant solicitors across the country. His voice, therefore, is one of the most important being heard in a series of debates taking place between claimants, insurers and government at the moment.
Despite the plethora of issues Foil has to contend to with, Mr Rowley is keen to make clear from the start that there really is a problem regarding claims against insurers, which needs to be addressed. "The compensation culture exists, though not necessarily in the way people talk about it, as more claims are being made. People think if something happens to them there must be someone to blame, and the general perception and awareness of stakeholders in society is that they can make claims." In his opinion, one of the biggest drivers of this compensation culture is claimant solicitors themselves, by harassing people to make claims and tending to act more as businessmen than lawyers in the modern climate.
"When you hear people talking of it being £300 or £400 to buy a personal injury case, well, we seem to have moved a long way over the past five years. It's affected lawyers in the same way as claimants. If you asked a solicitor if it was appropriate to buy a case they'd say no, but that's exactly what they can do. These days, you can start up a personal injury company simply by taking out a loan, buying up the cases and simply getting on with it."
Clearly, the past couple of years have been tumultuous ones for the claims management companies themselves, with the demise of Claims Direct last year, followed by the collapse of TAG this summer. And TAG continues to hit the headlines as blame is attributed by various parties and creditors argue over the monies owed.
As far as Mr Rowley is concerned, the TAG model for claims management companies has had its day. "You can't hide the fact that there are additional costs in it. However you dress it up - as an injuries fee, or whatever - it still sticks out, this layering of costs. The question is, if you pay £400 of costs to a referral agency, can you make any money out of it? That's where costs negotiators come in."
PI intermediaries here to stay
Although the claims management sector is facing tremendous problems, Mr Rowley is sanguine enough to appreciate that the culture of personal injury intermediaries is here to stay. "There will be a different way that somebody will come up with. It could be that solicitors buy claims up, or write employment law contracts for companies as long as they get the work. The more advanced way," he adds, "will be for claims managers to buy up solicitors once deregulation comes through. Claims management companies will have their own cases and deal with them as solicitors."
At the moment, lawyers cannot be involved with non-lawyers in such a way for the purpose of making money. But there has been so much pressure over this issue in recent years that Mr Rowley believes de-regulation will inevitably come through. He says the advantage in this method of working will be a greater degree of predictability.
Despite evident distaste for a phenomenon that has been scathingly described by others as 'ambulance chasing', Mr Rowley is at pains to point out that he is not adverse to the rights of people to seek compensation where they have a genuine grievance. Nonetheless, he is vehement in his attack on those with unscrupulous motives. "Travel litigation is a glaring example. Yes, you've got to keep claimants involved, but do you have to set up a website and all the rest? It smacks of going too far."
Contrary perhaps to the impression his strong criticism may create, Mr Rowley typifies the new spirit of discussion that has entered the industry in recent times, with the Civil Justice Council acting as a conduit for debate. Indeed, at the time of being interviewed, he was due to meet a few days later with his counterpart at the Association of Personal Injury Lawyers David Marshall to discuss the best way forward on the issue of rehabilitation.
Achieving genuine momentum on the rehabilitation front is evidently high on Mr Rowley's agenda, given his caustic observation of the current state of affairs: "It is like a pagan circle, with a group of people believing in the light, and the rest in the dark. You go to the the conferences and its always the same people that are the believers."
He believes the drive must be to move beyond the rigid demarcations that have characterised the rehabilitation debate over the past few years and attempt to come up with a material formula. "It's trying to fit rehabilitation into the system by getting the costing right," he comments. "The system has got to be simplified - if it's too expensive it has to change."
He is not convinced that making examination of rehabilitation compulsory for both sides is the way forward, however. "The trouble is, it's all done at the back end, long after the event and 90% of cases settle without getting to court, so it's difficult to let judges mandate. But we do need some judicial line. District judges have told Foil that they don't know anything about rehabilitation. We need to get it in at the beginning - perhaps an insurance policy that's based on rehabilitation," he suggests.
"It's all about getting the employers involved, buying a rehabilitation policy, rather than an employers' liability policy. But then you have to educate the employee as to what the policy is about."
In his view, greater dissemination of information is a priority. "There seems to be an island of knowledge and a sea of ignorance," he declares.
"Because rehabilitation works with the big cases, it's only really these insurers who know about it. Claims people don't get the knowledge down past the large loss, and will only use panel firms, who will in turn say we only use these particular rehabilitation providers - but other people in the firm won't know that much about it."
One area Mr Rowley is understandably very pleased about is that of fixed fees. After months of behind the scenes debate and some quite bitter arguments, the Department for Constitutional Affairs - formerly the Lord Chancellor's Department - has sanctioned the introduction of a sliding scale of fees for road traffic accident cases under £10,000. Coming into effect on 6 October, this represents a fundamental change in the area of personal injury costs (see pp28 and 29).
The only way forward
"Fixed fees seem to me to be the only way forward," he comments. "You can't have an hourly rate system when the end result isn't going to be that valuable." In Mr Rowley's opinion, defendant solicitors have long ago had to go through the transition to fixed fees "and that's what claimant solicitors are going through now". He says there is no reason why claimant solicitors can't quote a price, as they should be able to work out approximately how many cases they can expect to work on over the course of a year.
"There might be more work involved, but the basic principle is, quite frankly, indisputable. There's a lot of pressure on insurers here to play the game, a lot of pressure on insurers to pay predictable costs at times and pay less at other times. So there's a big pressure on them to play fair and there will always be some some insurers, when faced with a case that crosses our desk, who ask - is that reasonable, or can I pay less? If that culture takes hold, it will be a spectacular own goal for the defendants."
Despite the fact that the fixed costs regime has been restricted to RTA cases below £10,000, Mr Rowley is not concerned that its impact will in any way be lessened. "It looks limited, but it's not. Half of all cases are motor cases, so this picks up a third of all cases. It's a larger first step than we saw it as being."
He is optimistic that the scope of fixed fees can be extended further, with current discussion involving Foil taking place with a view to doing just this: "Once claimant solicitors realise you can make a decent fist of it, it will be easier to persuade them to take it further." However, he accepts that any roll out is unlikely in the short term, given the disagreement from union solicitors and Apil. "But the Department for Work and Pensions is talking about EL cases now; they have five working groups, one of which is legal costs, and we are meeting this month about that."
The causation arguments
Not surprisingly for a lawyer, Mr Rowley is dismissive of suggestions that a move to a no-fault liability system would be a viable option for future EL reform. "It just doesn't seem to work elsewhere," he says. "There are also interesting arguments as regards causation, whether injuries were caused at work or elsewhere, and that's where you need the lawyers to help." He adds that sometimes blame is needed in order to garner compensation in he first place. "I don't think it (the no-fault option) was ever really a starter; I don't think it would work," he asserts. Besides, he adds of the EL problem in general: "I tend to think it's one of the hard and soft market things; the investment market previously hiding costs, which has come as a shock to the insureds."
He is equally dismissive over the suggestion that there should be split funding for occupational disease. "Asbestos, repetitive strain injury, stress - there's always a new problem. You can hardly say that occupational disease is a complete surprise. Besides, the DWP just doesn't want to go there as a fund of last resort and insurers will find it hard to prove they can't adequately reserve against it."
Although there is a great deal of political debate to take place before such thorny issues can be addressed, Mr Rowley is at least confident that the judiciary, as a key driver behind any reform, is wellsbestos, repetitive strain injury, stress - there's always a new problem. You can hardly say that occupational disease is a complete surprise. Besides, the DWP just doesn't want to go there as a fund of last resort and insurers will find it hard to prove they can't adequately reserve against it."
Although there is a great deal of political debate to take place before such thorny issues can be addressed, Mr Rowley is at least confident that the judiciary, as a key driver behind any reform, is wellombined can provide a suitably appealing funding landscape.
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