Mine's a double!

We have an employer's liability claim where the injury sustained is not your every-day case. It’s so unusual that we need a particularly clever medical expert. We found one who is so well qualified that he charges £450 per hour plus VAT.

I thought it would be a damn fine idea, before signing up to his terms and conditions, to ask for an estimate of the likely total cost of examining the client, reading the records and producing a report.  We sent as much information as we had, including copies of all the relevant records.

We were given in response a range which had a top end of £3,000 plus VAT.  More than we had expected, but we worked with that along with our client and legal expenses insurers.

So the claimant sees the expert and the expert writes a report but before he will send the report he wants his bill paid.  Sensible enough even in healthier times.

But wait – what’s this?  The invoice is for over £5,800 plus VAT!

This very clever doctor has not helped the situation by, first, failing to offer any explanation whatsoever and, secondly, this…

In response to my observation that the invoice was almost twice the estimate, he writes me a letter denying it, and comparing the VAT exclusive figure billed with the VAT inclusive figure estimated.

Now, I don’t particularly care whether we compare £3,600 with £6,980 or £3,000 with £5,800 plus.  Either way it’s nearly double.

The discussion is continuing, as you might expect, but whilst I was dealing with my outrage I couldn’t help but wonder what the Solicitors Regulation Authority would make of it if I or any other solicitor did something similar.

At present this sort of thing may not raise the eyebrows of some lawyers and medical advisors. It may raise a few more when costs management in the new post-Jackson era really takes off. 

Cheers!

Whiplash backlash

Liability insurers seem to have got their way (surprise) as the Government launches its 'consultation' on proposed measures to tackle the evil as it is said to be of claims for compensation for whiplash injuries.

Let's be clear about one thing from the outset. Whiplash is not a myth. It's real - and it can have devastating effects. Hyperflexion and hyperextension of the cervical spine can in some cases result in brain and/or spinal cord injury, even death.

Often the outward signs are minimal, as they were in the case of a wholesale store manager I acted for a few years ago. But time went on and he couldn’t work, couldn’t play sport, couldn’t maintain his family life. Happy man lost his job, his marriage and his home.

He recovered significant compensation because, in addition to the orthopaedic reports, we commissioned expert psychiatric evidence that confirmed the causal connection. It was entirely genuine.

So, what's the problem? If these claims stand or fall on the basis of expert medical evidence - as, ultimately, all injury claims must and will - why worry?

Insurers have two main beefs. The headline, very reasonable, concern is that it's fertile ground for fraud. Faking or exaggerating a whiplash claim is easy, if you're willing and able to lie about your symptoms, it is said. There can be little doubt it happens.

The key problem seems to be the inability of many medical practitioners to validate claims.That stems from two problems. First, they lack the expertise and the technology - or both - to make an objective appraisal, independent of what they're told by the patient. 

Secondly, they are either unable or unwilling to test the truth of the subjective account they hear.

Well, you would be forgiven for thinking that one of a judge's key functions is to consider the integrity of the evidence, expert or otherwise, supporting a claim. The court is the gatekeeper. Here lies the second gripe.

Insurers say it’s too expensive to defend these claims, even if they win ultimately because many fraudsters aren’t worth powder and shot to enable costs to be recovered, or the sums are not worth chasing. They say they pay up because it’s cheaper, but they still complain about it and blame rising premia on claimants, their solicitors and costs.

Now a two-part “solution” is proposed.

First, we effectively scrap whiplash claims. Baby out with the bathwater. Genuine claims swept away along with, courtesy of, the fraudsters.

A bit like the current approach to disability allowance claims, some might say.

Second, take away the ability of claimants to properly pursue their rights – not just whiplash sufferers but all claimants with injuries worth plebeian amounts of less than Five grand.

A bit like the current approach to legal aid to challenge disability allowance decisions, and much more, some might say.

Overkill? Of course it is. In the typically disingenuous manner of the insurance industry the real attack is on the small claims limit to try and wipe the majority of claims that cost them money and that wouldn’t happen if claimants had no legal representation. Without lawyers claimants will almost always be at the mercy of wily claims handlers and all their tricks.

Until hauled up in front of the Court of Appeal these powerful institutions will do as they like, even if the law says otherwise. See the verdict of Lord Justice Longmore in Brown-Quinn yesterday.

The minority of fraudulent whiplash claims needs a proportionate and discerning solution, targeted at the problem – not to be exploited cynically to deprive deserving accident victims of justice to which they are entitled.

B-reath T-aking E-xhibition

Condemnation in the starkest of terms was handed to legal expenses insurers by the Court of Appeal yesterday.

The court was delivering judgment on the appeal by before-the-event (BTE) insurers in the case of Christine Brown-Quinn and others v Equity Syndicate Management Limited and Motorplus Limited. It was all about that now ancient chestnut of BTE insurers trying to restrict their policy holders’ freedom of choice of solicitors.

Lord Justice Longmoor, in a judgment with which Lords Justice Lloyd and McFarlane agreed, reached this overall conclusion:-

“It is quite wrong that, despite the warning shot delivered to legal expenses insurers by this court in Sarwar v Alam [2002] insurers should many years later be issuing policies which do not comply with the Regulations. General Conditions 2.3 and 5 are in breach of the Regulations in the ways I have explained and must be either deleted or comprehensively redrafted”.

Earlier in his judgment (Paragraph 8) his Lordship had observed that:-

“The facts of this case have revealed that the insurers exhibit an insouciance to their obligations under the Directive and the Regulations which leaves one quite breathless”.

He went on to explain that whilst the European Directive and Regulations made it entirely clear that a policyholder’s freedom to have the lawyer of his choice should be expressly stated in the contract with insurers, the terms and conditions before the court provided “almost the opposite”.

It’s all too familiar a scenario for personal injury claimant solicitors, despite the fact that the Court of Appeal has been telling the insurance industry for at least a decade not to do it.  For those unfamiliar, briefly it works like this…

When a claim is made upon the policy, because the insured has had an accident or otherwise needs legal assistance, insurers appoint one of their “panel lawyers”.  They will tell you that these lawyers are carefully selected to be on insurers’ exclusive panels, rigorously audited etc.

They won’t tell you that the defining feature is agreement in return for a steady flow of work to perform it at much lower prices than most other solicitors, not blessed (?) with the same arrangement, are prepared to charge for their work.

But a European Directive going back as far as 1987, and subsequent Regulations and decisions say that freedom of choice of solicitor cannot be restricted.  BTE insurers have long argued various ways around this, because it’s not commercially attractive for them to have to deal with and pay anybody but their tame panel lawyers.

The simple answer to most of their woes has been to meet requests from policyholders to appoint their own chosen lawyers with something in the vein, “sure, as long as your lawyers are prepared to agree our terms”.  Seems fair enough?  The problem is – as described above – that insurers then refuse to pay any more than they would pay one of their panel members.

So, in this case, when the policyholders wanted to instruct a non-panel firm, insurers’ response was to refuse the appointment because that firm was not prepared to work at the very low rates that panel lawyers accept.

(Incidentally, if you wonder how they can safely do it then it will help to reflect on what we have seen recently in the way of an increase in professional negligence claims – see Peanuts, Panel Beater and Solicitors Journal 23 October 2012.)

The Court of Appeal disapproved, finding that:-

“ It must be right that a refusal to accept the appointment of an insured’s lawyer of choice on the basis that he will only be accepted if he charges no more than the non- panel rates would be a serious inhibition of freedom of choice and thus contrary to the Regulations.”

Some comfort for the insurers in the finding that there may be circumstances in which the insurers were obliged to pay only the “non-panel rates” stated in the standard terms and conditions and that would be so in this case.

There is an important point to note for the personal injury claimant industry generally at Paragraph 29 of the judgment.  The court observed that:-

“We were not directed to any evidence before the judge that solicitors (other than Webster Dixon) were not prepared to conduct the cases of the insured for the non-panel rates of £125 (rising to £139) per hour. In the absence of such evidence it does not seem to me to be possible to say that the insurers cannot rely on their terms of their contract restricting the insured’s indemnity to the non-panel rate. It is not enough merely to point to rates set out in the HM Courts and Tribunal Service Publication “Guideline Rates for Summary Assessment”.

United we stand?  This may not go very far unless the general public, particularly drivers, are informed and educated about the binding nature of terms and conditions which, when they take out the policy, they will never even have seen.

But as the court’s conclusion indicated, it’s a long overdue clip round the ear which may pile on the pressure now for BTE insurers.  As for other concerns, you will have to read my article in the current issue of Personal Injury Brief Update Law Journal! 

Obiter, in the context of this post, I noticed his Lordship’s statement that “the court’s duty is to decide the parties’ legal rights, whatever the distaste with which it views the behaviour of the parties in the lead up to the hearing.”  Too true, and possibly one to remember during the whiplash debate over the days and weeks to come.

Regulation issue

I had the joy yesterday of completing the application to renew my firm’s authorisation - by the Solicitors Regulation Authority - and my own individual practising certificate, using the now legendary MySRA web portal.

It is only right to observe that – so far – we have not had a problem with the software this year.  Antony Townsend and his staff appear to have done what they set out to do.

One hopes it is part of a broad improvement.  I would have dealt with the renewal earlier but it is only quite recently that the regulator has understood that I am only running one business.

For most of 2012 I have laboured with the apparent belief that though I had secured recognition of my limited company as an authorised body and notified transfer of existing business to the new entity, I still wanted to operate as an unincorporated sole practitioner too…

I have had my nominations of myself as Compliance Officer for Legal Practice (“COLP”) and Compliance Officer of Finance and Administration (“COFA”) confirmed for the corporate entity.  We will see whether I am taken to task, as threatened, for not donning the same hats in a former business.

So it all looks a lot more cheerful ... except, that is, for the fees.

Mine have increased 50% this year and very little of that has anything to do with turnover.

For those who don’t know, the fees payable by solicitors, specifically, to their regulator have four components.

Individually we pay a practising certificate fee which is the same across the board and an organisation levy based on a sliding scale according to turnover.  We would always like it to be lower but these are not what stick in the throat.

This year I am paying the thick end of £1,500 by way of “contribution to the Compensation Fund”.  Again there is a personal levy which is £92 in all cases but then there is the organisation levy…

As I understand the fee structure for this year, that is £1,340 regardless of size.  So, as the sole director of a small incorporated practice – albeit with a growing number of other personnel – I will pay exactly the same contribution as a national firm with tens or even hundreds of partners.

How is that right?

Well, some point to a prejudice – sorry perception – that sole practitioners are the scourge of the industry because, obviously, we do exactly what we want and miss no opportunity to indulge in heinous activity that will require the profession as a whole to compensate somebody.

This yardstick is presumably applied regardless of whether one has policies, procedures and systems meeting and exceeding the Law Society’s Quality Management Standard.

It doesn’t matter that you have never had a negligence claim (touch wood) or that there has only been one virtually insignificant complaint in 3 years of busy practice.

Nor does it matter that big firms greedy for turnover and looking to improve tight margins compromise on service and expose the profession to further risk. In many cases, though the same firms have paid thousands upon thousands of pounds in referral fees to insurers with one consequence of fuelling the current argument for reductions of fixed fees in “low value” road traffic and other injury claims. 

They have helped give credence to liability insurers’ lie that the fixed costs were calculated to include an allowance for referral fees and now those are to be banned, then the costs should be reduced.

I have never paid referral fees and I don’t spend the equivalent of £500 and more per case in marketing to generate the business we do.

Again not wishing to tempt fate, we gain business by not screwing up what we do in the first place and gaining repeat business and referrals from happy clients.

You might be forgiven for thinking that we take a pride in our service delivery, don’t plan to compromise on quality and aim to maintain those standards despite the government’s relentless assault on funding.

I expect there is a fair chance that the cowboys will ride out of town when they can no longer make a quick buck.  It wouldn’t surprise me that firms like mine then get stung with yet more levy.

Meanwhile, having paid through the nose for this year’s renewal one way or another, I will be doing a big part of the SRA’s job for them with effect from 1 January.  Every time there is even a minor occurrence that is not strictly in accordance with the rules – even though it may not be within our immediate control – I will have to put on one or both of my COLP and COFA hats and decide whether I report myself and then wait…for what?

This is regulation.  David Cameron doesn’t want onerous regulation for the media because it is important to have a free press.

What about the legal system, Prime Minister?  Do you not think that is something we should also try to retain? 

Cabaret Voltaire

"I disapprove of what you say, but I will defend to the death your right to say it" – often misattributed to the French philosopher & writer Voltaire - was said by his biographer Evelyn Hall to illustrate his beliefs.

Freedom of speech, access to justice and the right to be heard are cornerstones of our society championed by a legal system that retains the respect and envy of the modern world - despite the battering it is taking from the current administration.

With the revelation, courtesy of a Freedom of Information Act request by the Daily Mail, of the cost to the taxpayer of Abu Hamza’s legal bills the Law Society is to step in to help the government bolster public confidence in the legal aid system.

Ironic? Or a demonstration of the objectivity, compassion and altruism that are essential components of the rule of law?

One of the longest-running shows on the London legal scene is said to have been maintained by payments from the legal aid fund to Hamza’s lawyers totalling some £680,000. That’s on top of the Treasury’s legal bill, of course.

The government is squirming, anticipating popular uproar. The Lord Chancellor and Secretary of State for Justice (not bad for someone with no legal background at all) has ordered an “immediate review” explaining that “he is concerned about public confidence in the legal aid system”.

The Law Society has already warned HMG not to lose sight of the “constitutional importance” of legal aid which “was devised to ensure that nobody is unable to enforce or defend a right for want of the means to do so”.

Justice director, Angela Patrick, has observed that ‘Human rights cases can involve complex challenges to some of the most treasured government policies; without legal aid, the state could be insulated from effective scrutiny’.

Like it or not, it has to be right. A more adept administration, relying less on common rhetoric and more on cultured debate, might have brought the curtain down far earlier but you can’t simply close the theatre.

Are you still to learn that the end and perfection of our victories is to avoid the vices and infirmities of those whom we subdue? (Alexander III)

Invest in the best

I read this morning that a green paper on plans to expand the Territorial Army will be announced on 8 November. It’s going to include financial incentives for businesses to employ members of the TA and a provision for two weeks paid leave for any reservists employed in the public sector.

Also this morning I posted on my website a report of how a government department – the paradoxically-named Department for Communities and Local Government – got caught out on a contractual dispute and was successfully sued in the High Court for more than £760,000.

Why did it lose?  Because, to quote from the report, the contract was “not drafted by lawyers”.

Fantastic.  How much money did our government waste in costs of the litigation only to blow the best part of a million pounds which, one infers, could have been saved if it had spent by comparison a modest sum on people who knew what they were doing.

What are these reservists, paid for out of the public purse and/or by struggling businesses that the government is currently trying to help (work that one out) going to be doing? 

Will we be sending them out in place of the highly-trained marines and others who continue nevertheless to be killed by a very capable enemy in Afghanistan? 

Just two examples of how this country now seems to be wedded to a strategy of second-rate performance.  They’re two of many – read all about the legal system and the health service in many earlier posts on this blog.

This is all done in the name of economy, because we need to cut expenditure.  Show me where any of it is working.

The contract dispute – expensive mistake.

The NHS – paying out millions every week for its incompetence,

The Ministry of Injustice dismantling our legal system to save virtually nothing.

The MOD (already quite proficient at some of the above) killing off anybody to save money.

We have to get back to doing what Great Britain has for the last few hundred years done so well - leading the field - even if it costs a few quid.

Invest in the best. All else follows.

Electric shocker!

We had the good fortune recently to snap up a neighbouring office suite which gave us extra space that we sorely needed. It comes with all the usual necessary evils, of course, including a couple more electricity meters. 

EDF seems to be the supplier of choice in this building and we already have one contract with them for the original office space so we decided to put the new eggs in the same basket.

The first thing that irked me was that our suppliers would not send us a written agreement if we wanted to take advantage of the discounted price in preference to the standard tariff. I am a busy chap but amongst a splendid team of people here I have a very hardworking practice manager who is more than willing and able to deal with this sort of thing.

But not when a supplier insists that the only way they will deal with this is by verbals over the telephone, with the director of the company – that’s me.

Like any other litigious primadonna, I feel I have hundreds of better things to do and I am suspicious in any circumstances where somebody absolutely refuses to show me a copy of the contract before I “sign”. 

The problem is that I am busy, changing supplier is actually a big deal and I have that awful feeling that we shall just be heading for another frying pan, if not a fire.

So, I end up speaking to a thoroughly charming young man called Sam to whom I explain – calmly – my misgivings. He is, throughout our discussions, a model of discretion and loyal to his employer whilst acknowledging that I am not a lone voice on this point.

After some good-natured wrangling and reassurance, we start the spiel. Unusually for a Friday, I am wide awake by now and listening carefully.

Part of the information I am given is that as I am entering into a “Fixed Term Period Contract” (one year) the prices that I am about to agree will not change, unless of course I am in breach of my obligations by non-payment etc.

Oh, and hang on – there is something else....

…the “fixed” price may also change if, to quote:-

“Any cost imposed on us in connection with processing, distributing, transporting, selling or supplying energy is increased, or calculated in a different way, or a new cost is introduced, which affect our costs of providing your supply”.

In other words, it’s a fixed price unless, err, prices rise.

Not to worry! Sam reassures me that even if supply costs do rise, EDF will not necessarily pass that cost on. Why not? Because consumers might be unhappy!!

I never knew that utility suppliers were blessed with such profound emotional intelligence.

Naturally, I asked Sam for a copy of the wording. He confirmed that I would receive a written agreement by post but said that they do not send out copies of “the script”.

Reason? “It’s considered commercially sensitive”.

You bet it is!