Monday, 24 March 2014

Equal pay means breaking the glass ceiling

An interesting press release came my way today. It's from specialist legal recruiter Laurence Simons. Its subject has resonance not just to lawyers but beyond the legal profession.

According to research conducted among 383 UK lawyers between 7 October and 4 November 2013, of which 57% were male, female lawyers practising in the UK are paid £45,884 less per year than their male counterparts.

The report, which took in both in-house and private practice lawyers, found that men received total remuneration of £160,009 in 2013, compared with £114,125 for women. That's a gap of 29%. The report states that this gap has narrowed by 3% over the past year, from its previous figure of 32%. During this period, men have seen a fall in total remuneration of £2,700 from £162,689, while women have seen a £2,800 rise in total pay from £111,293 seen in 2012.

The pay gap applies to salaries and bonuses

Laurence Simons' report points out that the current gap is evident across both bonuses and salaries. Female lawyers received an average basic salary of £93,248 in 2013, compared to £120,458 for men. In terms of bonuses women received an average of £20,877 in 2013, while men received almost 50% more at £39,551 on average.

The statistics make for intriguing reading - but so too does another facet of the report. It emerges that despite the pay imbalance, satisfaction is almost equal between the genders with 65% of female lawyers stating that they were either 'satisfied' or 'highly satisfied' with the bonus received - only marginally lower than the 66% of men who agreed with this.

For Chris Cayley, EMEA Managing Director of Laurence Simons, there is reason to be cheerful given the results of his company's report. "It is very encouraging that headway is being made to redress the imbalance in pay between the genders," says Cayley. "The UK is, of course, one of the legal centres for legal services globally and it is essential that this disparity in pay is resolved if we are to attract and retain the cream of legal talent."

A pay gap between sexes is baffling

I agree - to a point. I'd say that it is encouraging rather than very encouraging to see the pay gap between sexes diminish. But, in truth, that there is a pay gap at all remains baffling. We live and work in the early 21st century. We live in an enlightened society which rightly does not question equal rights and, indeed, protects them on the statute books. Why, then, is there any kind of pay gap? How on earth can it be justified?

No less intriguingly, Laurence Simons' report also reveals that female lawyers feel more secure in their jobs, at 96%, compared with 86% of males. Against this, slightly more men than women are optimistic about the economy over the coming year (67% of men compared with 60% of women). Overall, optimism is high.

That's good - but how optimistic can we be that next year's report by Laurence Simons will reveal that the pay gap between men and women has shrunk to invisibility? This dismaying truth is 'not very'.

But this is what we should all be aiming for. The glass ceiling has no place in law firms - and no place in society as a whole.

Friday, 14 March 2014

Lies, damned lies, and statistics: how insurers distort the truth about whiplash claims

If we believe what the insurance industry tells us, by means of its adept PR machine and a credulous media, there's barely anyone out there who hasn't made a claim for a whiplash injury. We're all at it. No sooner do we feel a twinge in our necks and off we go to make a claim. That's what the Association of British Insurers would have us believe, anyway.

The truth, though, is somewhat different. Anecdotally, the ABI's protestations just don't add up - look around the people you know, and you'll struggle to find someone who’s made a whiplash claim - and more to the point, its campaign to stigmatize whiplash is deeply wrong. Whiplash hurts, and is real: if you've been injured through no fault of your own, and as a consequence suffer from whiplash, you ought to be able to obtain compensation.

But even more pertinently, recent figures released by the Compensation Recovery Unit show that far from being on the rise, whiplash claims are actually decreasing.

Whiplash claims are dropping

The CRU has been collating annual statistics on the number of claims made each year for over 20 years. Its work, which came about as a result of the Social Security Act, started in 1990. A key element of the CRU's work is compulsory reporting: if an individual claims compensation from a compensator, which in the majority of cases would be an insurance company, the insurer or other paying party must at once inform the CRU.

The CRU's stringent reporting requirements make it a very reliable source of data. They provide a remarkable portrait of a society which, far from facing a litigation crisis engendered by 'cash-hungry claimants', is holding steady in terms of claims formally commenced and entering the legal process. David Cameron may have opined that "We simply cannot go on like this", but, in truth, the CRU statistics indicate that it would be no bad thing if we carried on much as we are. Not least when we look at the table below:

Whiplash claims

Motor claims

All claims




+ 6.65%
+ 7.98%
+ 6.03%
+ 10.1%
+ 17.2%
+ 14.64%
- 4.15%
+ 4.74%
+ 5.44%
- 10.8%
- 9.53%
+ 0.69%

Spin and reality

Whiplash claims have dropped markedly of late. Confronted by this, insurers claim that the fall in whiplash claims is due to injuries not being referred to as whiplash in CRU1 forms. However, this is misconceived. The fact there has been a fall in RTA claims as well as whiplash claims means that the fall is genuine: if it was simply a reclassification issue, RTA claims would be stable and whiplash falling. In addition, the fact that there has been a 10% drop seems to suggest that the majority of the fall in RTA claims may be due to a fall in whiplash claims.

Moreover, as I mentioned, the CRU1 form is completed by the compensator, which, in all but a few cases, is the insurer. This means any reclassification of whiplash injuries is therefore due to insurer reclassification rather than claimant representatives.

A touch of irony

Two other points are worth making. The insurance industry has been very happy to use the whiplash figures as produced by the CRU in previous estimates to justify its claims about the number of whiplash claims. I am sure I am not alone in finding it more than a little ironic that insurers feel that there are problems with the figures only when they start to fall.

Ralph Waldo Emerson Photo

Finally, the whiplash figures reflect each claim where the word 'whiplash' is included in the injury field. As such, if you consider a whiplash claim to simply be for that injury and that injury only, it is likely to be an over-representation of whiplash claims. For example, someone who suffers a broken leg, a broken arm, psychological injuries and whiplash will be included in the CRU whiplash figures.

In fact, work undertaken by colleagues here at Spencers suggests that only 60% of injuries involving whiplash are whiplash only (with 30% being whiplash and other soft tissue injuries and 10% being whiplash with multiple injuries, including broken bones).

The American 19th century essayist and philosopher Ralph Waldo Emerson once said 'Reality is a sliding door'. His words have a great deal of resonance when it comes to whiplash and how it's dealt with by the insurance industry.

Wednesday, 12 March 2014

Low pre-medical offers result only in injustice, the ABI should put a stop to them

Last month I attended a conference at Victoria Park Plaza in London hosted by Post Events entitled 'Motor Claims 2014'. Being at the conference prompted some thoughts about motor claims which I shall look at over the next couple of blogs.

First up, I'd like to talk about pre-medical offers, or, as the insurance industry calls this practice, 'third party assistance'.

Third party assistance happens when insurers make direct contact people who have potential claims. According to the Association of British Insurers (which has a code for its members on the practice), insurers contact people in this way for benign reasons. As the ABI put it in 2009, in a statement which is still on its website and therefore must be taken as policy:

Legal rights? Or legal wrongs?

"If an insurer contacts an injured third party it will be to ensure that they get fair compensation and the best possible rehabilitative care more quickly than through the legal process. In doing so, insurers will ensure that the person is fully aware of their legal rights and options.

"The FSA's guidance, combined with our own code of practice which we will be publishing shortly will ensure that claimants get the best possible deal as quickly as possible. It will also reduce legal costs, which all customers end up paying for through higher premiums."

Don't get mugged - The Law SocietyNot to put too fine a point on it, this is ridiculous. Third party assistance only ever renders justice and better rehabilitative care inadvertently. Its sole aim is to buy off claims before the injured person instructs a lawyer.

Despite the Law Society's recent 'Don't Get Mugged By An Insurer' campaign, not to mention criticism in parliament (MPs, when appraised of the practice of third party assistance, were aghast), insurers have carried on regardless. This was abundantly clear to me following a number of discussions with practitioners at last week’s Motor Claims conference.

The reality of third party assistance 

Let's be clear about the reality of third party assistance. If conducted skilfully by an insurer's representative, it means that an injured person's claim is settled in the absence of a medical report as to the extent and ramifications of the injuries - and before legal advice has been obtained.

This cannot be right - and available data reveals just how unjust it is. The Law Society has demonstrated that people who seek a solicitor's advice receive two to three times more compensation than those who accept an insurer's first offer. Moreover, a survey of APIL members in August 2013 showed that overall 25% of respondents indicated that insurers make pre-medical offers in up to one fifth of all claims. Given that in 2012/13 there were 1,048,309 claims (as detailed by Compensation Recovery Unit annual statistics), this means that over 200,000 injured people would be subject to a pre-medical offer.

Moreover, the continuing practice of making low pre-medical offers fuels the very 'compensation culture' that insurers would have us believe exists. A member of my own firm tells a classic story, in which she was contacted by an insurer within a day of having been in an accident. Fortunately for my colleague, neither she nor her son had been injured - and yet the insurer was straight on the phone, making an offer to settle a claim she might contemplate bringing, for a sum in the region of £3,000.

Given that insurers themselves do this, is it any wonder that people might start to have an eye for what they can get out of an accident?

The fact is that an injured person should be encouraged to seek independent legal advice after an accident. Medical evidence is invaluable in assessing the extent of that person's injuries, and should be obtained. It's disingenuous for insurers to contend that they're helping people - 'holding their hands that little bit more', as one insurer put it. Third party assistance, pre-medical offers, whatever you want to call it - the sole aim is to pay a claimant as little as possible. The ABI should adopt greater transparency, admit this and ensure that its members end the practice as soon as possible.

Next time, I'll discuss something else that doesn't bear scrutiny - the idea that whiplash claims continue to rise.

**The above piece was also published in The Law Society Gazette 11th March 2014**

Thursday, 6 March 2014

The Importance of Being Ethical - book to be published soon

What do we mean when we talk about 'ethical behaviour'?

The question looms large when we look at much of public life in recent years. Scandal after scandal has dominated the front pages, from phone hacking to MPs being less than transparent about their expenses, and each time a familiar refrain is sounded: what happened to the notion of behaving ethically?

My preoccupation with questions of ethics has led to me doing something I never thought I'd do - writing a book. It's called The Importance of Being Ethical, and it'll be published in a couple of months.

All is not what it seems

Photograph from Act 1 of the original production of The Importance of Being Earnest (1895)

The title is an allusion to the great Oscar Wilde play, The Importance of Being Earnest, which satirises Victorian notions of respectability and duty. To recap, the plot concerns of the love of Gwendolen Fairfax for Ernest - the alter ego of Jack Worthing, who was found in a handbag in the cloakroom of a London railway station by a Mr Thomas Cardew. Despite Jack's inauspicious start in life, he grows up among the landed gentry and is known as a pillar of the community in Hertfordshire, where he has a country estate. He finds his everyday life stultifying, and to escape it engineers a remarkable ruse: a disreputable brother called Ernest, his alter ego. He is always having to save Ernest from some calamity or other but Ernest, of course, does not exist.

Jack is a hypocrite, a man at ease with his deception. He wants to be perceived as upright and respectable, and has no qualms about his double identity. Gwendolen is no less preoccupied by the veneer of appearances. Obsessed with finding a husband whose name is Ernest - the name "inspires absolute confidence", says Gwendolen - she is unable to see through the deceit of Jack/Ernest.

The quality of being 'earnest' is uppermost in Wilde's mind. For him, being earnest meant inhabiting a world of false truths, smugness and complacency, a world in which so long as things appear to be alright, then they must be alright. Hence the play's most famous quote, uttered by the snobbish Lady Bracknell to Jack/Ernest: "To lose one parent, Mr Worthing, may be regarded as misfortune; to lose both looks like carelessness."

The play's denouement reveals that appearances are not to be relied upon; that to probe beneath the surface is to find a different story and, in fact, the truth.

Classic Wilde

The play is classic Wilde, in that his works are as paradoxical as they are amusing. As well as this, it seems to me to be as relevant today as it was when it was first performed over 100 years ago, on 14 February 1895 at St James's Theatre in London. Wilde still manages to shine a light on the hypocrisy which has come to permeate so many sectors of society.

So, in my book, I examine ethical dissonance in sport, popular entertainment, public service, the world of business, and, finally (by way of a topic particularly close to my heart), the personal injury sector. Time and again, in these arenas, it seems that appearances disguise a worrying, not say downright unpleasant reality. So long as everything seems to be OK, we ignore standards of professionalism and ethical rigour. But if we strip away the veneer, we find Jack Worthing, and Gwendolen Fairfax, to be alive and well.

The Importance of Being Ethical is a call to arms for those who believe in sound ethical principles and professionalism, in the concept of putting duty before profit, and for those who, like Jack Worthing, may prove to be Ernest after all. I hope that it will have resonance for anyone who cares about British public - especially those who believe that it is, after all, important to be ethical.

(And lastly, lest I set myself up for a charge of being less than transparent, the book has been co-written with a professional writer. More soon.)