Transcript WOOLF 10 YEARS ON: HAS IT WORKED?

WOOLF 10 YEARS ON: HAS IT WORKED?
• Pre Woolf situation
• Aims
• Vision
• Success to date?
• DCA Proposals
• Feedback
• Potential Impact
PRE WOOLF: PERCEIVED INJUSTICES
• Too expensive
• Too slow
• Too uncertain
• Too adversarial
AIMS OF WOOLF REFORMS
• Fairness
• Tighter Timeframes
• To be understandable to those who use
them
• Effective, adequately resourced and
organised court service
WOOLF’S VISION
• Litigation as a last resort
• Reduced time scales
• Costs more affordable and predictable
HAS WOOLF’S VISION BEEN ACHIEVED?
Avoiding Litigation
County Court Claims Issued:
2,245,324 in 1998
1,870,374 in 2005
High Court (QBD) Claims Issued:
142,505 in 1996
15,317 in 2005
HOWEVER…the number of bodily injury claims
reported to UK motor insurers rose by 3% a year
between 1996 and 2006
HAS WOOLF’S VISION BEEN ACHIEVED?
Issue Fees
Have largely increased in line with RPI
HOWEVER…
With effect from 1 October 2007, allocation
fees have increased and hearing fees have been
introduced.
HAS WOOLF’S VISION BEEN ACHIEVED?
Legal Fees
Bodily injury claims paid out by UK motor
insurers:
• Costs – up by 840% in 20 years
• Total cost of claims - up by
9.5% per year
• Costs for claims over £5 million –
up by 30% a year
HAS WOOLF’S VISION BEEN ACHIEVED?
Solicitors’ Hourly Rates
Central London rates for Grade 1 fee earners:
£260 per hour in 1999
£380 per hour in 2007
RPI for 2007 - £393.97
Time from Issue to Trial
79 weeks in 1999
58 weeks in 2005
HAVE THE WOOLF REFORMS FULFILLED
THEIR AIMS?
Fairness?
• Simplified litigation
• Costs regime – disadvantaged
defendants?
Reasonable Speed?
• Disparity and quality of court listings and
staff
• Waiting times for interim hearings
HAVE THE WOOLF REFORMS FULFILLED
THEIR AIMS?
More understandable?
• 45th Edition of CPR
• 30 statutory instruments
Adequately resourced and organised?
• No specialist judges or trial centres
• Court service budget is
limited
HAVE THE WOOLF REFORMS FULFILLED
THEIR AIMS?
Other Factors
• Woolf reforms in isolation?
• New costs regime
• Lower discount rates
• Revised Ogden Tables
• JSB Guidelines
WINNERS AND LOSERS
Claimants as winners:
Claimants as losers:
• Quicker settlement
• Fewer “have a
go”claims
• Increased damages
• Funding
• More judicial control
• No legal aid
• Media/press
• Compensation culture
• Insurance premiums
WINNERS AND LOSERS
Defendants as winners:
Defendants as losers:
• Judgements based on
merit
• Cost of claims
• Disproportionate costs
• Faster disposal of
claims
• Predictive costs
WINNERS AND LOSERS
WINNERS
LOSERS
Claimants and their
Court staff
solicitors
Judges
Defendants and their
solicitors
Insurers: Winners or Losers?
NEW DCA CONSULTATION
Proposals:
1. Raising the Small Claims
Limit
2. Raising the Fast Track Limited to £25,000
3. Streamlining the personal injury claims
process
STREAMLINING THE CLAIMS PROCESS
The Proposals
• Early notification
• Standardised claim forms
• Moratorium on claimant solicitors
investigations
• Settlement packs
• Standard damages / contributory negligence
scenarios
• Set timeframes throughout the process
STREAMLINING THE CLAIMS PROCESS
Where quantum negotiations breakdown
• Cases under £2,500 referred to a District
Judge to be resolved by paper hearing
• Cases over £2,500 to go through a simplified
review process
STREAMLINING THE CLAIMS PROCESS
Responses
• Law Society – supports proposals for claims
under £5,000
• APIL – proposals only suitable for RTA cases
where liability is obvious and should only be
used in cases less than £2,500
• ABI – welcomes streamlined process and
believes paper review for quantum should
apply regardless of value
STREAMLINING THE CLAIMS PROCESS
Cost Proposals
• Fixed costs for each stage
• Fixed success fees
• No recovery of ATE premiums taken out at
the commencement of the claim
• Claimants only to recover costs where they
beat their own offer on claims up to £2,500
STREAMLINING THE CLAIMS PROCESS
Law Society Response
• Reject the notion of the claimant having to
beat their own offer to recover costs
• Supports fixed costs
• Concerned by the possible impact on ATE
insurance
STREAMLINING THE CLAIMS PROCESS
ABI’s Response
• Supports staged fixed fees and success fees
• Supports removal of ATE where there is no
risk
APIL’s Response
• Rejects lack of funding and low fixed fees
• Concerned by impact on ATE market
STREAMLINING THE CLAIMS PROCESS CONCLUSION
• Should value alone determine track allocation?
Streamline process
• Are timescales realistic?
• How will claims departments react?
• Settling claims regardless of merit?
• Will fixed costs reflex cost of claims acquisition?
• Opportunities for TPA’s?
• New claim forms – “have a go” litigation?
STREAMLINING THE CLAIMS PROCESS CONCLUSION
Costs and funding
• At what level will costs be set?
• Effect on ATE market – final blow?