Thursday, 30 August 2012

Simmons v Castle: a small step in the right direction, but sadly that’s all

The Court of Appeal recently declared that general damages in most tort actions are to increase from 1 April, 2013. That’s good news, isn’t it?

I wish it was, but a closer look reveals that it isn’t necessarily so. The Court of Appeal’s judgment came in the case of Simmons v Castle. The endorsement of a settlement between the appellant motorcyclist and respondent car driver saw the Court of Appeal hold that it had an ongoing responsibility and the power to monitor and set the guideline rates for general damages in tort claims, including personal injury actions. Any such rates would be neither rules of law nor practice rules, but judges at first instance should consider themselves bound by them.

Hence, their Lordships ruled in favour of an increase in damages – but only by 10 per cent. The judgment sent insurers calculating  by how much they will need to  increase consumers’ premiums. They, along with the rest of us, had assumed that any increase in general damages would come through the implementation of the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO), also in April next year. But at the same time as insurers lament the guidelines of Simmons v Castle, so do personal injury lawyers who work at the coalface. The fact is that 10 per cent is nowhere near a large enough increase in rates for damages that have remained static and too low for far too long

This is not just the view of a claimant solicitor. Over 10 years ago, in 1999, the Law Commission Report No. 257 concluded that in cases where general damages exceeded £3,000 they should increase between 50% and 100% (with an appropriate tapering rise for cases where general damages were between £2,001 and £3,000). The Commission found that damages were not generally commensurate with claimants’ losses but also that “the ongoing non-pecuniary effects of many injuries are far greater than anticipated by victims at the time that they receive their compensation.” The Commission’s conclusions were reached after extensive research and an opinion poll on public attitudes to levels of compensation.

This issue was considered by the Court of Appeal in the 2000 case of Heil v Rankin. Regrettably, the recommendations of the Law Commission were not generally accepted. The Court held that in cases where the general damages exceeded £10,000 they should thereafter increase by 33%. However, there would be no increase for cases where general damages were under £10,000.

Little has happened since the Heil judgment. The recommendations of the Law Commission have not been implemented. Meanwhile, the cost of litigation has continued to rise. LASPO continues to wend its way through the legislative process, but there is no sign of provision for well-thought out increase in levels of damages envisaged by the Law Commission – as ought to be the case.

Now, along comes a recommended increase of 10 per cent, originally recommended by Lord Justice Jackson, implemented before April next thanks to Simmons v Castle. In some ways, we should be grateful as some were doubtful such a decision would come at all, but the truth is that as a society we are still woefully under-compensating injured people. We are still a long way from a collective endorsement of carefully considered recommendations which were made by experts, after due diligence and research, as long ago as 1999. The 'Simmons' adjustment does not even counterbalance the LASPO none recoverability provisions. As such, it is a step in the right direction, but that’s all it is.

Wednesday, 22 August 2012

The DWP’s Mesothelioma Scheme: Just Not Good Enough

Amid all the excitement of the Olympics it is perhaps no surprise that a press release issued at the end of July attracted little attention. It came from the Department of Work and Pensions, and sounded like a piece of very good news in announcing that, from 25 July, £300m was being pledged for the support of mesothelioma victims.

There was a catch – and hats off to The Observer for disclosing it last Sunday. In this piece, Jamie Doward highlighted the fact that the scheme is only available to future victims of mesothelioma, a form of cancer caused by exposure to asbestos.

To be fair, the DWP’s original press release, issued on 25 July, made clear that the scheme would only apply to “newly diagnosed victims”. It stated that the scheme “will allow around 3,000 mesothelioma victims across the UK who are unable to claim compensation because they cannot trace a liable employer or employers’ liability insurer to receive approximately £300m in payments in the first 10 years”, adding that around “300 mesothelioma sufferers a year currently lose out on compensation because they are unable to trace a liable employer or employers’ liability insurer”.

Lord Freud, the Minister for Welfare, declared: “We have worked tirelessly together with the insurance industry to agree this package of measures on behalf of those who face this terrible disease. The new scheme will mean that, for the first time, sufferers of diffuse mesothelioma, who cannot trace either a liable employer or employers’ liability insurer, will have access to extra payments.”

That sounds fine, so far as it goes – but the trouble is that it doesn’t go far enough. For starters, it seems that there will be a two year delay in the implementation of the scheme owing to the need for primary legislation. Mesothelioma is a terribly aggressive cancer, and the life expectancy of anyone diagnosed with it is nine months to a year. This means that anyone diagnosed with the disease now is likely to die before the scheme comes into force.

Moreover, as The Observer reports, there is considerable disquiet at the fact that the scheme only benefits suffers of mesothelioma. People suffering from asbestosis, pleural thickening and asbestos-related lung cancer are excluded from the scheme, but campaigners say these conditions amount to 50% of all asbestos diseases.

No wonder Tony Whitston, the chairman of the Asbestos Victims Support Groups Forum, told The Observer he was “bitterly disappointed at the exclusion”. He went further, accusing the government of acceding to the wishes of “rich and powerful insurers”.

I have previously alluded to the rather too cosy relationship that exists between the present government and the insurance industry, and have much sympathy with Mr Whitston. There is something about the wording of the DWP’s press release that is worrying. Lord Freud comes across as too keen to praise insurers (in saying how “tirelessly” they have worked with the DWP), and the press release is also at pains to point out that the scheme is “funded by insurers”. Then comes a quote by Otto Thoresen, the Association of British Insurers’ Director General (rather than someone from, for example, the Asbestos Victims Support Groups Forum). Mr Thoresen has this to say:

“Mesothelioma is a particularly aggressive cancer and the insurance industry, working with government, is determined to do all it can to ensure that sufferers get the support they need as soon as possible. This package of measures will deliver help to claimants much faster, including to those who would otherwise go un-compensated.”

Regrettably, though, this conjunction of the government and the insurance industry has not done all that it can. The scheme only applies to people suffering from mesothelioma since 25 July this year, will not be wholly effective for two years, and excludes a vast swathe of asbestos-related conditions. The bottom line is that many people will continue to go un-compensated, and, as so often when it comes to this government and the PI sector, so-called ‘reform’ simply isn’t good enough. 

Thursday, 16 August 2012

Into the Twitterverse

For many lawyers of a certain age, Twitter is baffling. To be fair, it’s not just lawyers who are perplexed by the 140-character publishing phenomenon that is Twitter. Many people of middle age and beyond find Twitter incomprehensible too; including myself until relatively recently I have to confess. Why, they ask, would anyone want to share thoughts that are, by definition, on the minimalist side – and who on earth is interested?

A cursory glance at some Twitter statistics provides ammunition against the opponents. Stephen Fry has over 4.5 million followers; as of 15 August, @BBCBreaking (BBC Breaking News) could boast of 3,824,931 followers. From celebrities to news channels, then, Twitter has emerged as a viable – in fact, vital – means of disseminating their message and generating interest in either their lives (we can all know what Mr Fry had for breakfast, if we wish) or what they have to say. Needless to say, companies have seen value in Twitter, too: organisations from Google Inc to Starbucks have developed a strong Twitter presence, with legions of followers.

At Spencers we haven’t been resistant to Twitter, but it’s fair to say that we haven’t utilised it as much as we should. Not any more: look out for plenty of tweets from yours truly from now on. I think Twitter is a great way of conveying news and information about developments in the PI legal sector, from referral fees to plans to extend the RTA Portal. Please take a look at @SpencerSols and @JohnSpencerLaw for more.

Meantime, for those of you who may also have been slow to Twitter but now see its value, I’ve been brushing up on my media law. There are a number of pitfalls to be wary of, and here, indeed, one can see the difference between the generations. People of my age, whether legally qualified or not, will readily understand that legal liability could flow from the misuse of software like Twitter, while the younger (especially teenage) generation probably have little or no idea of what could go wrong as a consequence of a poorly judged tweet. Here, then, are some guidelines.
  1. A tweet is subject to the law of libel. While my friends in media law tell me that this isn’t entirely settled law, it is generally agreed that a tweet has sufficient permanence to be regarded as publication in written form (rather than a verbal communication, which would be treated as slander). This means that something libellous – for example, saying that someone is a liar, or dishonest, or corrupt – could lead to the publisher being sued. The usual defences to defamation claims will apply, but if in doubt, don’t tweet.
  2. Tweets can fall foul of the Communications Act 2003, which prohibits the sending of grossly offensive communications or those of an indecent, obscene or menacing character. This provision was recently in the news with the conviction of Paul Chambers for sending a tweet saying “... I am blowing the airport sky high”. In a victory for common sense, Mr Chambers’ conviction was overturned, but persistently malicious or threatening tweeters won’t be so lucky. The moral is: don’t use Twitter to vent your fury.
  3. Likewise, don’t use Twitter to harass someone. Doing so on two or more occasions could amount to harassment under the Protection from Harassment Act 1997.
  4. If you intend to disclose personal or confidential information on Twitter, take care: the Data Protection Act 1998 may apply. For employees authorised by their employers to tweet, take care not to disseminate personal information about colleagues – and be careful, however upset  by your boss you may be, not to disparage your employer via Twitter. You would almost certainly be in breach of your employment contract.
  5. There are other ways in which Twitter could be misused. A tweet could amount to a misrepresentation, it could amount to a fraudulent statement, or it could be actionable as a malicious falsehood.

The bottom line is this: as with all social media, use your common sense. If you behave courteously and respectfully, you won’t break any laws. If you have something useful to say, you should find that you acquire followers who enhance your personal reputation or that of your business. If you can help people into the bargain – by keeping them up to date with developments in their sector and sharing information – so much the better. It’s this that we hope to do via @SpencerSols, so please take a look and let us know how we’re doing.

Thursday, 9 August 2012

Post-Chicago Musings

Last week my first overseas blog appeared. It came all the way from Chicago, Illinois, where I was attending the American Association for Justice annual convention. This week’s blog again has an American flavour, as I reflect on lessons learnt during my stay at the Chicago Hilton, where the conference was held.

I’d like to add to the two general points I made last week (that wherever one finds oneself in the world, claimant lawyers are engaged in an adversarial battle with insurers, and that claimant lawyers here and in America seem to be up against a legislative drive to reduce or cap the costs they can recover). In a sense, what I am going to say is also a general observation, but nevertheless I think it’s an important one.

Put simply, I think that rather than knocking the American litigation landscape we should look at it objectively and ask if it has a thing or two to teach us. I think it does, for reasons I will explain.

The British tendency is to categorise American lawyers as ambulance chasers (or worse). Our press regularly skews coverage of American legal proceedings to paint a picture of a system in which pre-trial jury selection is bizarre, and where US lawyers habitually exaggerate or even invent claims. But while there is rarely ever smoke without fire – some claims about the excesses of American lawyers are undoubtedly true – if you scratch a little deeper there is much to be said in favour of the American way.

The main reason I say this is because the American system is underpinned by a belief that the client comes first. An American claimant who secures recompense for an injury is not condemned as being part of a ‘compensation culture’. Instead, it is accepted and understood that a claimant’s lawyer will do everything in his or her power to gain as much as is properly due for a client. The client’s needs come first, which means that no stone is left unturned in the preparation of a case. Yes, this dovetails with a financial incentive for the lawyer involved, but in America there is recognition that lawyers have businesses to run. That they might make a profit is not viewed as something wrong and unpalatable.

Contrast the way in which civil litigation has developed in Britain – and the way it is heading. Recent years have seen successive reforms which, put together, make it harder and harder for British solicitors to represent clients to the best of their ability. There is a sense, here, that lawyers who make a decent living are somehow ‘evil’, that they fuel the ‘compensation culture’ which is so hated by the government.  This also leads to a very worrying knock-on effect for clients potentially, in creating an environment in which early settlement, at a fraction of what a client could have obtained in damages, will be become difficult to resist. There is some statistical  evidence of this which has recently been presented to the Ministry of Justice by Professor Fenn.

The emphasis, here, is on getting rid of claims quickly, at low cost. In America, the focus is on getting the right result. Here, the beneficiaries of the system can be insurers; in the States, the client’s case is the main thing, and is never or at least rarely sacrificed..

Doubtless there are issues with the American personal injury system. As I say, the point I am making is a general one. Likewise, the way we do things here is not all bad. But my trip to America reminded me of the real role of the personal injury lawyer: to serve injured people. I think we would all do well to remember this rather than uncritically accept governmental  soundings off about the ‘compensation culture’.

Or, put another way, if you were the victim of a serious accident, through no fault of your own, would you rather obtain the maximum compensation to which you were entitled – or settle the case early so that the insurers didn’t have to make a hefty payout?