WOOLF 10 YEARS ON HAS IT WORKED Pre
- Slides: 23
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: 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?
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