Wednesday, 14 December 2011

Is the case against boxing too strong to ignore?

Recently, I wrote about the arguments in favour of legislating to make cyclists have to wear cycle helmets. Doing so got me thinking about a sport which, unlike cycling, doesn’t also double as a gentle recreational pursuit. It’s a sport with an illustrious history dating all the way back to the original Olympics of Ancient Greece, but it’s one which is fraught with all manner of issues – and it certainly isn’t gentle. What am I talking about? Why, none other than the noble art or, depending on your viewpoint, licensed thuggery that is boxing.

Boxing has been with us for centuries and now permeates our everyday language to such an extent that I sometimes feel that we must all be pugilists. Phrases like ‘it’s time to step up to the mark’, ‘he’s on the ropes’ and ‘he’ll have to take this one on the chin’ all come from boxing. We use them now without even knowing where they come from. Granted, if we think about it we can all hazard a guess at what ‘on the ropes’ and ‘taking it on the chin’ mean, but how many of us understand the provenance of ‘stepping up to the mark’? For the record, my understanding is that it’s a reference to a line – a mark – drawn on the ground, either side of which two prize-fighters would stand before the commencement of hostilities.

That was way back when, before the codification of boxing by the Marquess of Queensberry in 1867. Since then, what was always a brutal sport – where initially fighters would simply trade blows until there was just one man left standing – has become more sanitized, especially in the amateur ranks, where headguards are compulsory and doing battle is confined to three two-minute rounds. But regardless of whether the Queensberry Rules are applied in the professional fight game or amid the amateur divisions, there is no escaping one simple fact: boxing is about the intentional infliction of violence by one human being on another.

Photo courtesy of ronnie44052 via Creative Commons

To be a good boxer, you need to be able to hit your opponent as hard and as painfully as possible. For this reason, people die in boxing matches or a few days after them. The former middleweight world champion Alan Minter is a popular and respected British sportsman, but in 1978 his knock out of Angelo Jacopucci in a twelve-round title fight led to the latter’s death a few days later. Three years ago, the Korean boxer Yo-Sam Choi was killed despite actually winning a world flyweight title. He was punched to the canvas (or ‘dropped’, as boxers have it) with five seconds of his fight against Heri Amol remaining. Choi beat the count and won the fight, but collapsed while still in the ring after the bout. He was rushed to hospital, where he underwent brain surgery, only to die just over a week after the fight.

Jacopucci and Choi are far from the only men to have died thanks to boxing. Others have sustained terrible brain injuries; even the best of them all, Muhammed Ali, is now a shadow of his former ebullient self. It is impossible not to conclude that Ali’s Parkinson’s Disease is a consequence of his years in the ring, while other boxers of decidedly more journeyman status end up with damaged cervical spines thanks to the repeated whiplash of being punched in the face.

Is it right that a civilised society continues to allow boxing? When we look at the damage caused by the so-called noble art, should we really endorse governmental proposals to bring it back into schools, because it is somehow ‘character-forming’? Ask any neurosurgeon if he would allow his son (or daughter!) to take up boxing and the answer is predictable, as such professionals know how easy it is to damage the brain.  Is it right that our taxes should go towards treating those who consensually batter one another?

When asked about this particular issue, the chief executive of Headway, Peter McCabe, said, “Headway supports the British Medical Association’s view that Boxing should be banned. The evidence is overwhelming that repeated blows to the head causes chronic brain injury. Anyone taking up boxing is needlessly risking their health.”

The Times sports writer Simon Barnes perennially voices his antipathy to boxing. I confess I hadn’t thought it through in great detail before, but now that I have I find it very hard to disagree with him. What do you think? Should boxing be banned, or should we accept it, as, for one reason or another, has been the case for centuries? 

Wednesday, 7 December 2011

Will the brave new world of Alternative Business Structures undermine the government’s objective in banning referral fees?

At long last, the Solicitors Regulation Authority has announced a date for the application process for those wishing to avail themselves of the Alternative Business Structure (ABS) regime. Appropriately enough, the date is 3 January, the first working day of 2012. After what seems an age since Sir David Clementi first proposed them (six years, in fact), the new year thus ushers in the brave new world of the ABS.

Is it, though, a world which we will like? I am not so sure. ABSs were much trumpeted following the passing of the Legal Services Act 2007, given that they will revolutionise the way in which solicitors run their businesses and allow non-lawyers to own and invest in law firms. Many high street sole practitioners and some small firms, fearful of the advent of ‘Tesco law’, were quick to sound a cautionary note over the ABS regime, but they are not the only people who have reason to worry. Those of us who believe in the legal profession, especially in the personal injury sector, also have cause for concern.

Image courtesy of the Travel Blog
For me, ABSs are Trojan horses in the battle against referral fees, in particular, and the sometimes over aggressive and unprofessional approach to PI marketing. They enable insurers and claims management companies to own and invest in law firms, thereby circumventing efforts by the Ministry of Justice to reform and improve the personal injury sector – because insurers and claims management companies could, in 2012, now start handling PI claims from start to finish. They will therefore control the whole process. 

Antony Townsend, the chief executive of the SRA, is looking forward to the new world, saying, in a press release dated 1 December: “We welcome the news that we will become an ABS licensing authority from 23 December. This is a milestone that we have been working towards for nearly two years.” He goes on to add that “the public can have confidence that ABS providing reserved legal activities will be regulated according to the same rigorous professional standards as traditional law firms.” 

But how will the ABS regime tackle this issue? There is also a raft of ancillary fees paid by those outside the legal profession, the likes of medico-legal companies, garages, reporting engineers and towing companies. These bodies all habitually pay referral fees, thereby fuelling a vicious circle of money generation around some personal injury cases.  What does the SRA intend to do about this, and the fact that these companies are likely to apply for licenses to set up ABSs? 

There is, though, still time to deal with this issue. The ABS regime gets underway from 3 January, but it does not emerge complete and fully formed. The date represents the start of the application process, but it is thought that actual ABS licences will not be awarded until late February at the earliest. It is to be hoped, between now and then, that a way is found to ensure that the brave new world of ABSs does not undermine that part of the government’s commitment, namely profiteering out of personal injury claims, which many of us support. It is further to be hoped that the professional conduct of cases by the solicitors profession is fully recognised and protected in this short period,  and not fatally undermined.

Wednesday, 30 November 2011

Should cyclists be compelled by law to wear helmets?

If the government has its way, the current 70mph speed limit on Britain’s motorways will be increased to 80mph in 2013. The Transport Minister, Philip Hammond, told the world that change was in the air at September’s Tory party conference. As he put it: “Britain’s roads should be the arteries of a healthy economy and cars are a vital lifeline for many... it is time to put Britain back in the fast lane of global economies and look again at the motorway speed limit which is nearly 50 years old, and out of date thanks to huge advances in safety and motoring technology.”

Mr Hammond may have a point. The existing 70mph limit was established in 1965. Since then there has been a fall of 75 per cent in the numbers of people killed every year on British roads. It may be the case that only a university-educated technician can fix today’s cars, but technology has undoubtedly made driving a lot safer than it was back in the days when vehicles resembled leviathans and power steering was practised only by weight lifters.

But if there might be a case for raising the speed limit on motorways, it seems to me that we need to be taking a far more cautious view when it comes to another form of transport, one that most of us learnt to enjoy as toddlers – albeit with stabilisers. I’m referring, of course, to cycling: an innocent, invigorating and healthy pursuit, something at which Britain excels as a sporting nation and something that huge numbers of us enjoy recreationally on weekends. What’s not to like, indeed, about cycling?

My sentiments exactly, but a recent chat with Peter McCabe, the CEO of the brain injury association and charity Headway, gave me pause for thought. Headway’s primary aim is to increase awareness of brain injury and its consequences and to initiate activities and campaigns which will reduce the incidence of brain injury.

I was chatting generally with Peter, himself an eminently reasonable man, when the topic of brain injuries sustained following cycling accidents came up. Peter’s usually unruffled demeanour changed dramatically. In fact, it wouldn’t be far short of the truth to say that he became seriously vexed by the issue. Why? Because there is a simple means of reducing, and sometimes avoiding altogether, a brain injury if you come off your bike. It’s this: wear a helmet.

The Post Office compelled its 37,000 cycling postmen and women to wear helmets back in 2003, a decision made following the deaths of five cycling post workers in the three years up to 2001. This was a decision which met with Peter’s approval. “If you spend time on a hospital ward, meeting people who’ve sustained serious brain damage after coming off their bikes while not wearing a helmet, you’d agree with me that compulsory cycle helmets are essential for children. Surely the safety of children in the UK is every bit as important as it is in Australia, New Zealand and 22 States in America (where such legislation has been in force for some years),” Peter told me. He added that it was both heart-rending and infuriating to see such damage, when the government could take real steps to prevent it by a time-honoured expedient: legislation.
What do you think? If it is prepared to increase the speed limit on motorways, on the basis that technology has made driving safer, should the government legislate to make the wearing of cycle helmets compulsory, just as it did, in 1983, the wearing of safety belts in cars? Do you agree with Peter McCabe or with London’s mayor, Boris Johnson, who seems to cycle everywhere without a helmet, intent on enjoying the wind in his flowing locks? 

For me, whatever the statistics say one thing is obvious. If you’re wearing a helmet while riding a bike and are hit by a car at 40mph, it probably won’t make a lot of difference. But if you’re wearing one and something goes wrong at under 20mph – say because you simply fall off while at traffic lights and hit the ground - it might be the difference between your chances of continuing to enjoy your life or being reduced to a vegetative state. Maybe, then, the government should be looking at legislation to protect cyclists as well as to help motorists come 2013.

Wednesday, 23 November 2011

From cash-for-questions to referral fees: a short history of institutional dysfunction

The Leveson Inquiry is gripping. All manner of the great and the good seem to be involved in the government’s quest to unravel the culture, practice and ethics of the press. Yesterday Hugh Grant gave evidence; later this week Steve Coogan, J K Rowling, Max Mosley and Garry Flitcroft will appear. We’re only at the outset, too: this one will run and run.
At the same time as Lord Justice Leveson, sitting in the Royal Courts of Justice, does his best to deal with the phone hacking scandal, a mile or so away in the Old Bailey a jury is hearing evidence in the trial of Gary Dobson, 36, and David Norris, 35, who are accused of the murder of Stephen Lawrence in April 1993. The jury will reach its decision in due course, but the facts of this case are already well-known. Indeed, the tragic murder of Stephen Lawrence and the resultant bungling by the police led to an Inquiry led by Sir William Macpherson, whose report was published on 24 February 1999.
The Macpherson report developed the notion of institutional racism, which it defined as follows:
The collective failure of an organisation to provide an appropriate and professional service to people because of their colour, culture or ethnic origin. It can be seen or detected in processes, attitudes and behaviour which amount to discrimination through unwitting prejudice, ignorance, thoughtlessness and racist stereotyping which disadvantage minority ethnic people. It found that institutional racism was prevalent in the Metropolitan Police Service (and other services), and had played a role in the flawed investigation into Stephen Lawrence’s murder by the police.
More recently, we have seen the scandal of MPs’ expenses. Jumping back a quarter of a century, there was the notorious cash-for-questions debacle. And to return to the present, there has been justifiable public outrage at the outsize and disproportionate scale of bankers’ bonuses.
All of these things, it seems to me, bear a relation to what ails the personal injury sector. I have written often on the many problems which beset this industry. They may not amount to outright criminality, as in some of the analogies above, but they are significant nevertheless and range from the issue of referral fees to a pervasive lack of market transparency, to blatant profiteering, via victim auctions and the endless merry-go-round of commissions, to endemic conflicts of interest. Again, while not criminal acts they are they connected to phone hacking, institutional racism, cash-for-questions, MPs’ expenses and bankers’ bonuses because in each instance malpractice has become systemic. It becomes second nature to those working in each particular sector or industry. They get away with it, and keep getting away with it, for so long that in time they don’t even recognise that their conduct is wrong.
I think, then, that what we witness periodically is institutional dysfunction. Hopefully the Leveson Inquiry will enable the media to put its house in order; similarly, it seems there is now a strong following wind to enable the personal injury sector to reform. But change will only be accomplished via a holistic approach, like that of Macpherson; one which acknowledges that the whole needs to be tackled, rather than just its isolated constituent elements.
As I have said, one means to reform is to embrace the notion of professionalism. This is a subject in itself (what is it, indeed, to act and behave as a professional?) but one thing goes with the territory as much as ethics, honourable conduct and fair play: the idea of accuracy. Accuracy of information, accuracy of intent, accuracy of advice.
Accuracy, too, in the figures disseminated by insurers. Of late, they have been in the habit of saying that insurance premiums have risen between 30 and 40 per cent, because of ‘compensation culture’. They haven’t.  The true figure, according to an analysis of the Association of British Insurers own figures by the Access to Justice Action Group, is around 4.8 per cent for cars and motorcycles. If the figures for commercial and other vehicles are added, insurance costs actually fell by 3.3 per cent. Getting this right – dealing only in the true facts – would be a big step forward in the drive to resolve the problems in the personal injury marketplace.

Wednesday, 16 November 2011

Change is in the air, but could we do more?

Here’s a story that I only wish was apocryphal. Regrettably, it’s not. In fact, it’s the sort of conversation that we've probably all encountered, at some stage or another.

A group of lawyers from a personal injury firm were out for a drink. They had just attended a conference on the Jackson Review and the myriad of impending changes to civil litigation, not least in the fraught arena of costs. One might expect them to be rather preoccupied, given the impact the changes will bring on their livelihoods.

Not a bit of it. The group was sanguine to a man, ready to take on whatever came their way. It might have been possible to construe this as evidence of an admirable ability to adapt to change, to roll with the dice and serve the law and their clients come what may, were it not for what animated their equanimity. Which was, as one of them put it: ‘Who cares how the system changes? We’ll still find a way to make our money.’

Far-fetched? Sadly not. This is how some in the legal profession think. They’re not interested in their clients; all they care about is making as much money as possible. And they don’t mind if they bend the rules along the way.

This kind of lawyer is not confined to the personal injury sector, but arguably seems even worse when met in this environment. The idea, for example, of victim auctions – of lawyers bidding among themselves to secure the highest value personal injury cases, not because they care about the victim but because they see him or her as a cash cow – is not only anathema to right-thinking members of the profession but also unpalatable to anyone with a sense of morality.

What, though, can be done about this sort of thing? Yes, we need to continue to press the government to consider the full gamut of issues in, for example, its proposed (and welcome) ban on referral fees, and yes, we need to continue to press for legislative change where necessary. But I wonder if there’s more that we could do.

Perhaps it is time to reassert the professional standards and duties that come with the territory of being a legal practitioner. These seem to be too often ignored by those in the personal injury market.  Maybe if like-minded, honourable individuals who are committed to rooting out malpractice formed an alliance, we could do something about the blatant profiteering and corrupt practices that blight our industry?

If a campaigning body was established, it could set about achieving the following:
  • Deliver real market transparency – A significant portion of current industry practice deliberately confuses and dodges clarity. Consumers need to know the facts so that they can make decisions from a fully informed position.
  • Reign in blatant profiteering – There is a duty to avoid profiteering in every walk of life and this includes personal injury claims. Claims should not be seen as an opportunity to make money without any meaningful contribution being made to the service provided.
  • Stamp out conflicts of interest – Nothing must stand in the way of delivering in the interests of the client. Too much is currently done for the benefit of business and not the individual. This situation must cease.
  • Commissions should be returned – The current merry-go-round of commissions must stop. Any money paid by a referring party should be returned to the individual.
  • Ban referral fees in all their guises – Consumers should have a choice as to who they instruct. While a decision has been taken in principle to ban referral fees, we must campaign to ensure that legislation truly delivers its objective.

What do you think? Is there mileage in forming an alliance to tackle these challenges? Please post a comment here, or, if you prefer, send me your thoughts via e-mail at

Thursday, 10 November 2011

The insurance industry might not like it, but whiplash is a genuine condition

Whiplash is controversial. On the one hand, there is the injured person – the individual suffering varying degrees of neck pain, usually as a consequence of his or her car being shunted in the rear. On the other, there is the insurance industry. From its vantage point on high – a long, impact-free way from the scene of the accident – it tends to lament the number of whiplash claims made by British citizens. In fact, it doesn’t always just lament them: if it had its way, some parts of the insurance industry would prefer whiplash to be clinically diagnosed as a wholly fabricated condition for which no compensation is ever payable.

Certainly, there are examples that some whiplash claimants exaggerate the extent of their suffering. It is also undeniable that whiplash claims represent a high number of motor accident claims. But before we jump on the bandwagon which is being piloted by the Association of British Insurers (ABI) – members of which have  started using software privately dubbed as a ‘whiplash lie detector test’ to expose what it believes are almost always bogus claims – we should pause and consider the latest thinking on the nature of pain.

I recently attended a presentation to the Association of Personal Injury Lawyers (APIL) by Dr Jannie van der Merwe, a consultant clinical psychologist who specialises in cognitive-behavioural therapy. Dr van der Merwe’s talk, on emotional responses to pain, was fascinating. Among many interesting observations – not least, that the brain of a person with chronic pain shows functional, structural and molecular findings which suggest that pain can be understood as a disease state – Dr van der Merwe tackled whiplash. Insurers won’t like what he said: namely that whiplash, albeit that it may not be accompanied by physiological evidence, is a tangible condition.

This contention was illustrated by some remarkable case studies of people who either should have been in terrible pain (for example, a street performer from Pakistan who habitually put knives through parts of his body, exhibiting no discernible pain) or should not have experienced any pain at all. In the latter category, there was a man whose boot had been pierced by a six-inch nail. Unsurprisingly, he exhibited the kind of pain that one would expect, were a nail to be driven through one’s foot. However, upon examination it was revealed that the nail had missed his foot entirely, travelling through the boot and between his toes. Nevertheless, the man’s experience of pain was real, his symptoms identical to those that would be expected had the nail pierced his foot.

I believe that we need to be cognisant of cutting-edge psychological research such as that presented by Dr van der Merwe. His findings show that even if physically verifiable trauma does not accompany whiplash, it is no less debilitating for its sufferer.

Instead, then, of devising a system whose very title betrays the insurance industry’s attitude to whiplash (viz, its ‘lie detector test’), the ABI would do well to halt its bandwagon and enter into a genuine debate about whiplash. For those at the sharp end, knowing that those to whom they pay their premiums treat their pain and suffering seriously, rather than with contempt, would be a source of some comfort – if not an end to the pain they are unfortunate enough to experience.

Wednesday, 2 November 2011

Back to the drawing board, please, with the MoJ’s Referral Fee Impact Assessment

So, the Ministry of Justice (MoJ) has published an Impact Assessment on the Referral Fees ban. Good news, for surely things must be proceeding apace?

Well, yes and no. Yes, ever since September’s announcement by the MoJ that referral fees in personal injury cases are to be banned many people, including me, have been pleased and optimistic that a clearly dysfunctional system is at last going to be reformed. But no, because – and not for the first time – there are grounds for fearing that to embark upon reform in haste is to repent at leisure.

Why do I say this? Not, I assure you, because I just happen to like banging the drum of measured and sensible reform, as opposed to what is increasingly coming to resemble an ill-conceived cacophony of scattergun percussion. I urge caution because of the nature of this particular Impact Assessment.

First, though, a refresher. Impact Assessments are relatively new to the government’s lexicon, arising from a rationale which states that estimates of the costs and benefits of policy options under consideration should normally form an integral part of consultation exercises. As the Legal Aid, Sentencing and Punishment of Offenders Bill (LASPO) is pushed through, with its provision banning the receipt and payment of referral fees, it is therefore government policy that an Impact Assessment be undertaken. Bear in mind that an Impact Assessments is:
  • a continuous process to help the policy-maker fully think through and understand the consequences of possible and actual Government interventions in the public, private and third sectors; and
  • a tool to enable the Government to weigh and present the relevant evidence on the positive and negative effects of such interventions, including by reviewing the impact of policies after they have been implemented.
That sounds sensible, you will agree. It is shame, then, that this particular Impact Assessment is so scant on detail. Remarkably, it contains nothing on the mechanics of the implementation of the ban, other than that it is planned for autumn 2012. Here is all that there is on the crucial question of just how the ban will be achieved:
  •  The reforms will be implemented through primary legislation. A provision in the Legal Aid, Sentencing and Punishment of Offenders Bill will be introduced to prohibit the payment and receipt of referral fees in personal injury cases. It is intended that the relevant regulators (the SRA, FSA, claims management regulator and others) will take the necessary steps to enforce the ban.
Indeed, the Impact Assessment expressly says that there is no data available for a ‘quantitative’ impact assessment. The data required for this is listed, but then described as unobtainable either because it cannot be tracked down, is unknown, commercially sensitive or not readily available. What’s more, a vast amount of the Impact Assessment is couched in conditional terms: look out for the frequency of the words ‘might’ and ‘may’ when it comes to the ramifications of the referral fee ban in practice.

One thing is said with clarity: that claimants could lose out as a result of the proposals.

To me, that alone should be enough to urge a rethink. We need to put the emphasis on helping people pursue genuine claims. Referral fees turn the industry into one in which money trumps merit, but how can it be right if, as a consequence of rushing through legislation, some people who have been seriously injured are unable to bring claims? The Government needs to remember the purpose of an Impact Assessment: to help the policy-maker fully think through and understand the consequences of legislation. Please, then, can we have some thought about how, exactly, to implement the ban? 

Thursday, 27 October 2011

It’s not too late to stop the implementation of the LASPO Bill

This week, I attended a Consumer Justice Alliance event at the House of Commons hosted by Andy Slaughter MP. It had a simple aim: ‘to inform Parliamentarians of the importance of access to justice for all’.

Simple, yes. Perhaps you’re thinking that it sounds a little dry, too? Far from it. The two hours that I spent at the House of Commons yesterday proved to be a moving reminder of what’s at stake when we talk about access to justice. Why? Because for all that the law can be complex, even obscure and rarefied, underlying its machinations are human lives.

This became very clear as I listened, with admiration, to the stories of two women whose husbands had been the victims of negligence. The first lady spoke of how her husband’s treatment in hospital had rendered him wheelchair-bound and brain damaged.  This was a cast-iron case of clinical negligence, with complicated legal and evidential issues. The lady had managed to secure sufficient compensation to ensure that her husband’s life was made tolerable, at least. The second woman’s husband had contracted mesothelioma, a form of cancer  caused by exposure to asbestos. This had been a particularly difficult claim, but ultimately resulted in success, so that, again, the man’s life was made tolerable.

Both women spoke with great dignity and power. That is not, though, the only thing that they had in common. What also united them is that neither would have been able to see their loved ones obtain justice if they were subject to the regime proposed by the Legal Aid, Sentencing and Punishment of Offenders Bill (LASPO), which is currently making its way through parliament.

The LASPO Bill has been much criticised, and no wonder. Many civil litigation claimants are presently only able to bring claims thanks to the ‘no win, no fee’ system in this country. However, the coalition government is intent on pushing LASPO through, so that, among other changes, recoverability of success fees and after the event insurance (ATE) – without which the risk of bringing a claim is often for the most vulnerable claimant  too great - will not be possible.

The government’s reasoning lies in the drive to combat what is perceived as ‘litigation culture’. The justice secretary, Ken Clarke, says the measures are necessary because the “civil justice system has got out of kilter”, resulting in “spiralling legal costs, slow court processes [and] unnecessary litigation”. With respect to Mr Clarke, so broad a brush statement misses the point. Under the current system, the rule is that costs follow the event. Legal costs are borne by the losing party, and claimants take out ATE insurance to pay the defendant's costs if the claim fails. Lawyers manage the risk of bringing claims via success fees, which are payable when they win. The LASPO Bill will do away with this, introducing a new scheme known as ‘qualified one-way cost shifting’, under which defendants will bear their own legal costs whatever the outcome.

The Consumer Justice Alliance has made its opposition to LASPO clear. The reforms are also opposed by the Law Society, the Bar Council and a  number of the costs judges in the High Court. All argue that far from facilitating access to justice – the key driver for civil litigation reform in recent years, ever since the Woolf Report – LASPO will mean that ordinary people are unable to bring claims. With no ATE insurance, and costs being funded from damages, they could easily end up out of pocket, even when their claims are as meritorious as for  those I encountered in the House of Commons.

There is no doubt in my mind that the implementation of LASPO could have a profoundly detrimental effect on access to justice. It is to be hoped that the moving testimony of women such as those whose accounts  I was privileged to hear yesterday reaches a wider audience, and that the government reigns in measures that are so clearly inimical to the ordinary citizen’s ability to seek redress when wronged.

Wednesday, 19 October 2011

In tackling fraud, we must be careful not to deny access to justice to genuine accident victims

First the news on referral fees: it looks as if the wheels of the law won’t be grinding as slowly as usual.  There is a discernible following wind behind the September announcement by the Ministry of Justice that referral fees in personal injury claims are to be banned, with plenty of media coverage driving on the calls for reform.

Indeed, referral fees in other sectors of the law are now being questioned, with the Sunday Times recently exposing the payment of referral fees in socialite divorces. One divorce lawyer is alleged to have paid fees of up to £100,000 to friends and acquaintances for sending unhappy couples her way. If true, no doubt she has been complying with the Solicitors’ Code of Conduct, but surely the payment of such bounties cannot but add to what is claimed to be the ‘compensation culture’ which ails contemporary society.

On, then, to what continues to concern me about reform in this sector. My thoughts are prompted by the fact that tomorrow I will be attending an annual conference on fraud at the Millennium Hotel in Mayfair, London. The majority of individuals present will be claims managers and fraud specialists from insurance companies, and the aim of the conference is to discuss “the industry's ongoing collaboration to achieve its fraud prevention goals”.

As vice-chair of the Motor Accident Solicitors Society, it is important that I am at the conference, both to learn more about current concerns in the insurance industry but also so that I can monitor the extent to which government reforms could have unintended consequences for injured people and road accident victims. Put simply: everyone agrees that fraud is wrong, but in combating it we must be wary of creating an environment in which genuine victims are denied justice.

Tomorrow’s conference will probably see discussion of the practice of ‘fronting’ on motor insurance policies. This scam occurs when an older, more experienced and lower risk motorist is insured as the ‘main driver’ of a vehicle. In truth, the vehicle is driven and often even owned by a younger driver, who is then added to the policy as a ‘named driver’, bringing down the cost of their insurance cover. The main culprits are parents – some 36,000 of them, according to the Motor Insurers’ Bureau. Some even pass off the younger driver as their spouse or partner, which reduce insurance costs yet further.

There is no doubt that ‘fronting’ is a valid topic of debate, and something that the insurance industry is fully entitled to tackle. But returning to referral fees, whilst the debate and appetite for reform continues apace, one senses that the government is now grappling with the huge and multifaceted problem of condensing to law the appropriate changes. This is not easy, and nor is it something that should be rushed. It is very clear that a holistic and thorough approach is appropriate: without it, change may cause more harm than good.

Wednesday, 12 October 2011

Making headway in the labyrinth

Yesterday I appeared before the House of Commons Transport Committee, which sat to take oral evidence on the rising cost of motor insurance. Giving evidence with me were Paul Evans, the CEO of Axa, Andrew Dismore, of the Access to Justice Action Group, and a man who needs no introduction, the Rt Hon Jack Straw MP. I was representing the Motor Accident Solicitors Society (MASS), of which I am the vice chair.

This was the second time I’d attended a select committee meeting. In November 2010, I gave evidence before Louise Ellman MP, who is the chair of the Commons Transport Select Committee. Then, as now, I found that the experience of engaging with Parliament has its Kafkaesque moments.

As in the Czech novelist’s great novel, The Trial – which sees Joseph K search fruitlessly for justice, having been arrested for a reason that is never specified – the splendour of the surroundings is inescapable. The Palace of Westminster, where I gave evidence in 2010, is awe-inspiring, both in its sense of history and architecture. Portcullis House, where yesterday’s hearing took place, is rather less grand but still has an august flavour, perhaps because of its name: it is so called after the chained portcullis used to symbolise the Houses of Parliament on letterheads and official documents.

But for all the grandeur, the business of actually appearing to give evidence isn’t easy. Last year, it seemed as if I was asked to wait interminably outside an apparently limitless number of doors, rather than ushered directly to the Committee. It was only by dint of determination that I managed to find the room in the Palace of Westminster in which the Committee was sitting. This year, the venue was changed (from the Palace to Portcullis House) at the last minute – but no one thought to tell me. It’s almost as if because everyone within Parliament knows the drill, they forget to tell the rest of us.

Jack Straw, indeed, is a man who knows Parliament like the back of his hand. Perhaps this gave him the confidence to breeze into the hearing a few minutes after it had started; certainly, I was in the midst of introducing myself when he arrived.

Attending a hearing in the company of a heavy hitter such as Jack Straw means that one has to be determined to be heard. Here, my previous Select Committee experience stood me in good stead. I felt that I made MASS’s point: that unless the Government tackles systemic failings within the personal injury industry, a ban on referral fees alone may do more harm than good.

Moreover, albeit that I have long campaigned for a ban on referral fees, I have also consistently said that implementing the ban needs to be handled with great care. Accordingly, a key component of any ban will be adequately defining what a referral fee is, and consequently what it covers. For example, will the Government include ancillary services which are also involved in personal injury claims, such as car-hire companies, in the ban? There are also a myriad of questions over advertising standards and data protection, with unsolicited texts, cold calls and adverts which encourage litigation, being used to the detriment of the public and the injured party alike. We also need answers as to what the advent of Alternative Business Structures will do to the personal injury system. Could a claims management company (CMC) or insurer take over a law firm? Market rumour is indicating that a vast majority of CMCs have expressed interest in doing just that when the time comes.

All these issues, not to mention the practice by which insurers intercept claimants before they have access to independent legal advice, need to be addressed. If they’re not properly looked at, the culture of profiteering in the personal injury sector will continue unabated – and accident victims will be no more likely to obtain justice than Joseph K.

Wednesday, 5 October 2011

SMS spam is unwelcome and needs to be eradicated

Free Msg: Our records indicate that you may be entitled to £3750 for the accident you had. To apply free reply CLAIM to this message. To opt out text STOP

Far too many of us have received this text message, or something like it. It’s no more and no less than SMS spam, and it’s another example of the endemic dysfunction in personal injury (PI) claims. Let me explain.

Unsolicited text messages promising £3,750 – for some reason, the amount is almost always £3,750 – are sent because of the cavalier disregard for personal data by those who stand to gain by treating PI claims as a commodity. Often enough, these text messages are sent to consumers regardless of whether they’ve actually been in an accident. In fact, recent research from the Direct Marketing Association found that 43 percent of consumers reported receiving such messages.

That statistic strikes me as extraordinary, but to add insult to injury it is often the case the mobile phone users pay for the dubious privilege of receiving a spam text message. On top of that, there is usually a charge to send a text in reply saying ‘STOP’, and yet worse sending ‘STOP’ is unlikely to have the desired effect anyway – the spammers know they’ve got a real person, and so continue with their unwelcome barrage.

It is often difficult to determine exactly who has sent the message, and it is even more difficult to ascertain just how one’s personal data has come to the spammers’ attention. Granted, sometimes SMS spam is sent to mobile phone numbers which are randomly generated by software programmes, but on other occasions it appears on your phone because someone, somewhere, has sold your personal details without your consent.

The practice is abhorrent: SMS spam is being sent because claims management companies, lawyers with questionable motives and a myriad of other organisations which have no regard for the rights or welfare of the public are trying to drum up business. They amount to another shoddy practice in an industry which is in desperate need of reform.

At the same time, then, as it tackles referral fees in PI claims, the government should act to end the unauthorised sale of personal information. SMS spam is unethical and contributes to the rise of our unfortunate ‘compensation culture’. The government should act immediately to toughen its enforcement with steep penalties for non-compliance, but meantime, please read the guidelines below on how to deal with SMS spam from the Direct Marketing Association and endorsed by the Motor Accident Solicitors Society.

Wednesday, 28 September 2011

Reform in haste, repent at leisure

The old saying is that the wheels of the law grind slowly. This is true. However, if it means that we get things right, it strikes me that patience is no bad thing.

When it comes to referral fees, I find myself champing at the bit for a quickening in the pace of reform, and yet, having reflected further on the Ministry of Justice’s recent announcement that referral fees in PI claims are, at last, to be banned, mindful of the need to cover all bases. Moreover, consideration of some of the finer points arising from referral fees reveals that while a ban is welcome, there is still a way to go.

Take, for example, the definition of a referral fee. At present this is conspicuously absent from the Solicitor’s Conduct Rules. Lord Justice Jackson, in his Review of Civil Litigation Costs, proposed that a referral fee is "any form of payment or other consideration to a party for introducing clients to a solicitor". His Lordship expressly suggested that this should be subject to input from the Solicitors Regulatory Authority (SRA) and the Legal Services Board (LSB).

It seems to me that Jackson LJ’s definition is a good  starting point. We need it because, if we are to stamp out what his Lordship described as an “abhorrent” practice (ie, the endemic paying of referral fees), we need to be clear about what is, and what isn’t, a referral fee. It is to be hoped that the two professional bodies to which Jackson LJ referred revert to him speedily, and certainly rather quicker than has been possible with the SRA and the licensing of Alternative Business Structures (ABSs).

ABSs were much trumpeted following the passing of the Legal Services Act 2007, given that they will revolutionise the way in which solicitors run their businesses. The Legal Services Act allowed non-lawyers to own and invest in law firms, and the ABS regime was due to come into play on October 6th. Many have lamented delays in its implementation, the latest of which the SRA  currently attributes to  the ‘parliamentary timetable’. Now, it seems, the SRA has been given the green light to be the licensing authority for ABSs, but as Professor Stephen Mayson notes on his blog: “We have had more than six years since Sir David Clementi first proposed [ABSs]. They are not a new idea; and it’s not as if no-one has spent any time thinking about both the principles and the detail since then... Where have these members [of the legal profession] been for the past six years?”

That aside, there is another significant issue with regard to ABSs – one which means that the delay understandably criticised by Professor Mayson might be a blessing in disguise. The fact is that ABSs are Trojan horses in the battle against referral fees. They enable insurers and claims management companies to own and invest in law firms, thereby circumventing efforts by the Ministry of Justice to rid us of referral fees and what the government condemns as ‘compensation culture’ – because insurers and claims management companies could be handling PI claims from start to finish.

There’s more, too. What of the raft of ancillary payments made by those outside the legal profession, even once the ABS regime is in place - the likes of garages, reporting engineers and towing companies? These bodies all habitually pay referral fees, thereby fuelling a vicious circle which ultimately means that accident victims’ claims may be handled by inexperienced, non-expert lawyers – and meaning that drivers’ insurance policy premiums endlessly increase.

It all adds up to a situation calling for reform, but reform done well. A little delay, so that we can think through all the issues properly, may be no bad thing. Or, as is said of another sphere of life to which most of us can relate: ‘marry in haste, repent at leisure’.

Wednesday, 21 September 2011

Fixing a broken system

What’s not to like about last week’s announcement by the Ministry of Justice (MoJ) that referral fees for personal injury claims are to be banned? After all, for far too long we’ve been held hostage by a dysfunctional system, one which privileges money over merit so that the law firm that pays the most, rather than that which is best equipped to deal with an accident victim’s claim, is rewarded. Surely, then, the MoJ’s declaration is good news?

Well, yes, but in truth the MoJ’s announcement is more of a step forward on the long road to recovery than news of complete rehabilitation. That there is a long way to go is best illustrated by a look at the nitty-gritty of the current system. Today, as you read this, a personal injury lawyer somewhere in the country will be signing off a payment which secures drivers’ details from an insurer, a garage or, most probably, a claims management company. En route, data protection laws will almost certainly have been breached – did you really consent, when you renewed your insurance policy a decade ago, for your mobile phone number to end up on an accident claim marketer’s database? But no matter: the show must go on. And so claim after claim is made, creating a vicious cycle which sees the insurance companies pass on their increased costs by setting higher premiums for all drivers, irrespective of whether they have made a claim.

Sound familiar? Does it also sound like a racket? The Chairman of the Bar, Peter Lodder QC, thinks so. For him, referral fees are “bribes and add an unnecessary cost to litigation ... [they have] no place in a fair and open justice system.”

Most agree that they wish referral fees were not in the system and so although it is impossible not to welcome the MoJ’s announcement, a huge cautionary note needs to be sounded. What is required is a holistic approach to curing the ill of referral fees. The current system is complex, with any number of strands going off in any number of directions, and we must beware of piecemeal solutions. What, for example, is the government’s definition of a referral fee? How will the advent of Alternative Business Structures (ABSs) influence the personal injury and insurance markets? Could it be, thanks to the ABS regime, that a claims management company or insurer takes over a law firm? Market rumour is indicating that a vast majority of CMCs have expressed interest in doing just that when the time comes. Also, what of data protection, SMS spam and the RTA Portal?

Ultimately, reform of this sector comes down to one thing. How far are we from acknowledging, as Lord Jackson’s Report urged in January last year, that accident victims are not a commodity?