Presentation on theme: "WOOLF 10 YEARS ON: HAS IT WORKED? Pre Woolf situation Aims Vision Success to date? DCA Proposals Feedback Potential Impact."— Presentation transcript:
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? 45 th 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: Quicker settlement Increased damages Funding More judicial control Claimants as losers: Fewer “have a go”claims No legal aid Media/press Compensation culture Insurance premiums
WINNERS AND LOSERS Defendants as winners: Judgements based on merit Faster disposal of claims Predictive costs Defendants as losers: Cost of claims Disproportionate costs
WINNERS AND LOSERS WINNERS Claimants and their solicitors LOSERS Court staff 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?