LASPO Fallout Continues; Costs Review on the Horizon; Civil Liability Bill delays

Five years on from the implementation of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO), the consequences continue to raise the hackles of the hardiest lawyers in the profession. However, a welcome review of part 2 LASPO is now on the horizon.

On his retirement as Lord Justice of Appeal in Spring 2018, Lord Justice Jackson denounced the legal aid cuts as deplorable, and criticised the fact that the recommendation in his final report on civil justice reform of “the vital necessity of making no further cutbacks” in legal aid availability or eligibility had not been heeded by ministers[1].

Some of the consequences of LAPSO are that those lucky enough to be eligible are, nevertheless, finding it hard to access it. There are also wide gaps in provision not being addressed. But, says Jackson LJ – who is probably best known for his review of civil costs with the aim of promoting access to justice at proportionate cost - noone has been systematically monitoring the effectiveness of these reforms.

So what’s next? Personal injury practice continues to see developments which other practice areas are unaffected by, particularly the commoditisation of cases, the financial squeeze for practitioners taking on PI cases, and the exclusion of the Bar from Portal cases and Fast Track case preparation and pleading.

The latest development of note came at the end of June, when the Ministry of Justice announced a post-implementation review of part 2 of LAPSO[2] – the litigation funding and costs reforms which including costs budgeting, a ban on referral fees in PI cases, and the abolition of the recoverability of success fees and ATE insurance from losing defendants. Jackson has noted that costs in many cases remain disproportionate for the parties - a vital issue that the review must focus on.

Also rearing its head once again is the Civil Liability Bill (published March 2018), which makes significant changes to the personal injury compensation system, with a notable focus on tackling the continuing high number and cost of whiplash claims, and increasing the small claims limit for personal injury cases. It will also change the way the personal injury discount rate is calculated by retaining the 100% compensation principle - while modernising the calculation of the discount rate to reflect the reality of how claimants actually invest money.

This, says government, will provides a fairer and better way to set the rate for both parties – on a statutory footing. Under the Bill, an independent expert panel will also be created. The panel will be consulted as to the factors to be considered in setting the rate.

But significant concerns around the proposals have been aired: the Bill has been criticised for targeting road traffic accident victims, and there are concerns that genuine claimants with minor injuries will not be able to access legal advice. There is also a lack of provision for ensuring that the expected savings to insurance companies will, in fact, be passed on to consumers by way of reduced insurance premiums.

The Justice Committee is so critical of the Bill that it has expressed deep concerns in a recent report[3] in which it states that increasing the small claims limit for PI creates significant access to justice concerns. The Committee makes a number of conclusions, notably that “the Government has under-estimated the impact of raising the small claims limit on providers of before the event insurance, with potentially adverse consequences for access to justice”.

It urges government not to go ahead with its planned increase of the small claims limit to £5000 for road traffic accidents, and £2000 for employer’s liability and public liability claims.

Meanwhile, how is the Bar reacting to publication of the Bill? Andrew Walker QC, Bar Council chair, has commented on “the doubtful evidence and assumptions on which some of the proposals are based”. Writing in Counsel magazine, he refers to the Bar’s work with the Personal Injuries Bar Association (PIBA) on the Bill – helping PIBA makes its expertise “count in Parliament, with the right sort of intervention, in the right places, and when it will have the greatest impact”.

He comments: “If a wrongheaded proposal is not nipped in the bud here, then the battle may be harder to win later in other areas.”

So when will these proposals come into force given they were first mooted back in 2015? Critics of the Bill will be pleased to know that though government aimed to bring the reforms into force in April 2019, the timetable has now been squeezed and it has been postponed until after the summer recess. The Bill will not, therefore, come before Parliament until September at the earliest.

The uncertainty therefore continues for now – and continued uncertainty and the prevailing financial constraints brought about by recent reform is not good news for the personal injury Bar.

[1] Speech to Cambridge Law Faculty
[2] Barristers and other stakeholders can give their views here by 24 August 2018
[3] Justice Committee Report and Summary: publications.parliament.uk/pa/cm201719/cmselect/cmjust/659/65903.htm

 

 

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