APIL blog

Year: 2013 | 2012 | 2011

Can we afford to keep injuring people?
Evans Deborah | 11 Jun 2013

It’s hard to pick up a newspaper without reading a story about the rising cost of claims. But it’s not the claims that cost, it’s the injuries. There is a lot of talk about preventing claims, yet none about preventing injury.

So what does an injury cost? Well firstly, there is a cost to the NHS in treating the injury. This can vary enormously depending on whether the injury warrants a lengthy hospital stay or a trip to the local GP. Then, there is the time spent away from the workplace, which is a cost to the employer who will be paying for sick leave whilst suffering a drop in profitability. There is then the cost of, and time spent looking at, accident prevention so that it doesn’t happen again. The injured person will be in pain and will be unable to enjoy normal activity or planned events – holidays may need to be cancelled, sporting events cancelled, even weddings may need to be postponed. Injuries regularly occur at the most inopportune times, and rearrangements cost money. An injured person may lose income if unable to work, or may incur additional costs – for example needing a taxi to get to work if he is unable to drive, or needing adapted equipment at work. Many people benefit from rehabilitation, which comes at a cost. Rehabilitation can be so important in giving people the best possible opportunity to get back to full health, or make the best recovery possible.

Obviously, an individual has a legal right to make a claim for compensation if he is injured. There is nothing wrong with this – this is the compensation he needs, as the above examples clearly demonstrate. He can claim general damages for the injury suffered, any financial losses he has incurred, and he can claim for any future care needs if he has them. Damages for future care feature in many cases where there will not be a complete recovery, and the claimant will be left with an ongoing disability. Future care needs are calculated at actual cost. Damages are not a windfall, but are carefully calculated to ensure you are not given a penny more than you need. Sometimes, if people are young when they are injured and therefore have a long life expectancy, the sums can sound quite large and resemble lottery wins to the uninformed. But, if a disabled teenager receives an award of £1m for future care, with a life expectancy of 60 years, this equates to only £45 a day, which really does not go far enough in covering the costs I’ve already outlined. The reality is that living with an ongoing disability costs a serious amount of money. A person, who is fortunate enough to live longer than expected could, as a consequence, run out of damages before the end of his life, and the costs of caring for him will fall on the state.

It is not the claims that are costing the country a fortune; it is the very act of negligently injuring someone in the first place. If we spend more on prevention there would be fewer injuries, and fewer claims. The decline in standards is palpable. Only a week or so ago, the media carried stories from leading doctors concerned about decreasing levels of staffing in accident and emergency departments. Quite bluntly, they expressed their concern that people would not get the proper treatment, and that there was an unacceptably increased risk to patient safety. Claims against the NHS will spiral upwards if nothing is done.

Prevention is so much cheaper than cure.

At last - a balanced look at the whiplash issue
Evans Deborah | 07 May 2013

The Transport Select Committee’s inquiry into the true number and cost of whiplash claims has finally given claimant organisations a voice inside the halls of Westminster.

And news that the Government is not going to give a response to its whiplash consultation until the autumn means there is a good chance that the committee’s findings will be taken into account. At the very least, I hope the committee will note that, according to figures from the Compensation Recovery Unit (CRU), whiplash claims fell by almost 60,000 in the year 2012/2013. Claims are now back to the level they were in 2008/09.

This flies in the face of insurers’ claims of an ‘epidemic’. One of the features of an epidemic is that it spreads rapidly and widely. Scientists have yet to find one which reduces in size.

It’s hardly surprising that insurers are wide of the mark on this issue. The ABI has often based its claims about whiplash on anachronistic data. Its argument that the UK ‘has the weakest necks in Europe’, for instance, rests on a single survey that is nearly a decade out of date. The report, compiled by the, Comite European des Assurances was published in 2004 and relies on figures even older than that.

The truth is that the insurance industry’s disingenuous claims about whiplash are a misdirection designed to divert attention away from more inconvenient facts. According to the ABI’s recent report, Lifting the bonnet on car insurance – what are the real costs? the average car insurance premium in 2011 was £440. £88 of this was estimated to be caused by whiplash claims but £242 (more than half the average premium) went on car repairs and replacement vehicles. The Office of Fair Trading (OFT) has branded the area of car repairs as ‘dysfunctional’ and, having found that insurers’ approach to car repair and replacement “may push up premiums for drivers by £225 million per year”, the OFT referred the UK motor insurance market to the Competition Commission for investigation.

Similarly, documents disclosed as part of APIL’s judicial review showed that the ABI’s claims that premiums would reduce if changes to civil law were made were not as clear cut as they suggested.

In e-mail correspondence between the ABI and the Cabinet Office five days before the famous insurance ‘summit’ with the Prime Minister, the ABI refused to give chapter and verse on how much premiums would fall, saying “we absolutely cannot commit to a percentage… furthermore, we cannot commit to a timeframe.”

Since then, Direct Line and LV= have both publically indicated that premiums would not reduce significantly as a result of the changes.

The Government has already slashed lawyers’ fees in the RTA portal after being persuaded to do so by the insurance industry and is now considering channelling hundreds of thousands of injury cases through the small claims court on the same basis. This would have a devastating effect on access to justice with genuine claimants forced to pay for their lawyers out of their own pockets or take their chances in court alone against qualified solicitors, who usually represent defendants and their insurers.

Those who decide to go it alone without legal representation are likely to be considerably undercompensated and claims management companies will exploit any increase with aggressive marketing campaigns targeting injured people. This kind of publicity could even encourage more fraudulent or exaggerated claims, and yet the Government seems to think the small claims court is a panacea for dealing with fraud..

APIL’s carefully considered 10 point plan to eliminate fraud from whiplash claims was designed to tackle the problem effectively while maintaining the rights of genuine victims of injury, who are, after all, the reason the system exists in the first place. The Government’s proposals will simply create a process which works first and foremost for insurers and their shareholders.

The Transport Select Committee must listen to the facts. If changes to the small claims court are implemented, a totally unbalanced system will be created in which the rights of people suffering injuries through no fault of their own are pushed to one side. Only by listening to all parties can a balanced system be created, with balanced priorities and the interests of genuinely injured people at its heart.

The increase in clinical negligence claims - is it really the lawyers fault?
Evans Deborah | 22 Apr 2013

The press focuses on the fact that claims against hospitals continue to rise and that last year the Government set aside nearly £19 billion to cover compensation claims. Before jumping to conclusions, let’s understand the context - the facts behind the figures.

There are three reasons why the amount of damages paid out is going up. Firstly, if the NHS injures more people through falling standards, it will result in more claims. Secondly, those poor people who end up the most severely injured as a result of medical negligence are living longer. Thirdly, if the injuries inflicted (particularly in a number of the recent scandals) are more severe, they will obviously cost more to compensate.

When a patient is severely injured, he has high costs of future care. Each year, money will be spent on caring for such people’s needs – in some cases this may be round the clock care. Disabled people have much longer life expectancies than only a decade ago. Life expectancies for serious disabilities have increased by 50 – 100 per cent. The costs of care continue over a longer period of time, costing the wrongdoer - in this case the NHS - more.

Survival rates for the most serious injuries are increasing, which is good news. However, this also means that people are living with serious injuries who would previously not have survived at all. A baby with cerebral palsy, where the baby is brain damaged at birth, would have rarely survived a few years ago. Now, babies survive but need a lot of care.

What these costs do not demonstrate is rising legal bills. The cost per claim has actually gone down, and therefore it is wrong to point the finger at lawyers driving up these costs. A claim is only settled, and the lawyers paid, where someone has been genuinely injured. You only have to pick up a daily newspaper to see that hospital standards are falling – time and time again there is a story showing that there is a massive public health scandal here.

If the Government and the NHS want to reduce the costs of claims they need to stop injures happening in the first place. In an environment of cuts, there is a debate to be had as to whether there will remain enough money in the NHS system to provide for proper care for patients. Will the problem worsen over time?

Part of a lawyer’s job is to properly quantify claims and work out exactly what injured people need to provide for their future care. Lawyers bring great expertise to claims, and in particular, the precise calculation of compensation. Being injured should never mean being consigned to poverty, unable to afford proper care when the compensation has run out. Nor should it be the case that those injured through no fault of their own by the NHS should then have to rely on the cash-strapped NHS for their care needs.

No one deserves to be injured. Prevention, learning from mistakes, and a real focus on patient care is the best way to reduce the costs of claims. Claims only cost the NHS when people are injured on its watch. The scandal isn’t the rising cost of claims, it is the rising number of injuries. Let’s focus on cause, rather than effect.

The importance of scrutiny
Evans Deborah | 22 Feb 2013

Those who embrace scrutiny generally have nothing to hide, and welcome it as a means of giving assurance to the outside world that all is as it should be. Transparency engenders trust.

Those who eschew it, however, are often fearful of what will be revealed. And certainly, resisting scrutiny builds distrust and suspicion. So often, resisting scrutiny is about hiding the indefensible.

Scrutiny is particularly important in public life. The electorate places its implicit trust in those it elects, and scrutiny guarantees that trust is not misplaced.

So what do I mean by scrutiny? Well, it could take the form of a freedom of information (FOI) request to the Government – a simple written request for information – the agenda for a summit, the guest list for an event, the minutes of a meeting. Many organisations, including APIL, ask for such things occasionally to get a feel for how decisions are made and policies formed, what arguments are debated, who contributes to the thinking, what evidence is gathered. They do this to satisfy themselves that the thinking is proportionate, reasonable and balanced. In our case at APIL it helps inform the way we operate as an organisation, what research we carry out and what evidence we collect, how we, in turn, form our policies, and how we work with our members to ensure that they are prepared for a changing environment.

Obviously, if all such information was in the public domain there would be no need to ask, but it isn’t. Freedom of Information requests aren’t generally onerous to deal with – generally a quick e-mail in reply to a request , with an attachment, is all that’s needed. With modern technology, information is readily available at the touch of a button. But I believe unnecessary work is too often created by internal debate within the agency which has been asked to provide information about whether something should be released or not, so making a mountain out of a molehill.

Governments should always be able to justify their decisions, to show that they can provide evidence for their choices. Data and evidence should be used to shape a policy to ensure it will deliver its objectives. Governments tend to fear scrutiny when their decision-making is ideological rather than based on evidence, and they are unable to justify their actions. A Government which has made a good, informed decision will never be scared about providing the evidence. So what are we to make of reports that our Government is considering reducing the so-called ‘burden’ of FOI requests?

The press uses FOI requests as a tool to ensure ministers and civil servants conduct themselves in an ‘above board’ way. Too often, FOI requests show decision-makers in a poor light. Indeed, the MP expenses scandal would have been exposed via FOI requests had it not been overtaken by a leak. This is good investigative journalism through legitimate means.

FOIs aren’t the only thing under threat. Consultations, a well established method of gathering evidence, are now also viewed as a burden, rather than an asset. Consultations take 12 weeks – why? Because it takes time to assimilate evidence and carry out research to prove or disprove a hypothesis. It adds to, rather than inhibits, policy development. Yet the Government has now warned that we should no longer expect 12-week consultations. Is it that policy makers don’t want to wait 12 weeks or is it that they just don’t want to be questioned?

The Government is also considering removing the facility to judicially review (JR) its actions. The recent JR involving Richard Branson is a classic example of why this procedure is vital – the Government had not followed procedure and had made a decision that was fundamentally flawed. No-one enters into a JR lightly – they can typically cost six figures, and the adverse consequences can be huge. A JR is simply a last resort when a Government won’t listen.

Scrutiny shines a light on decision-making and mediates behaviour. Let’s not return to the dark days where decisions were made without impunity behind closed doors. We have too much to lose.

You’ll miss them when they’re gone
Evans Deborah | 08 Feb 2013

It’s a popular myth that lawyers are parasites, out for themselves and their own pockets. In fact, if you have the misfortune to be injured, you will realise that lawyers are the good guys, the ones who fight for your rights and get you what you need and deserve in what can be a challenging, drawn out, even aggressive battle with the wrongdoer.

Current Government proposals on slashing lawyer’s fees have caused outrage because the fees proposed are so low that it will become impossible to be able to afford to do the work. Lawyers are quite simply being priced out of the market. It takes many hours of work to settle a case, and slashing fees means that lawyers face making a loss on each and every case.. If any other profession were to face such a prospect, there would be a huge outcry.The prospect for personal injury lawyers is alarming. Many will shrink their personal injury departments or even close them altogether. Many lawyers may face redundancy and unemployment. However, unlike in other industries, these redundancies will not been brought about by the work disappearing. The work is still very much there. Sadly, people continue to be injured needlessly day after day – at work, on the roads, in public spaces.

As yet, there is no drive from Government actually to reduce injuries to bring down the cost of claims. Instead, it is considering putting in place systems which discourage claims from being brought at all. Part of this approach probably comes from misguided advice that the majority of claims are fraudulent. Indeed, the Association of British Insurers has done much to promote this view, with little hard evidence to support it. We absolutely urge insurers to combat fraud but question whether cutting lawyers’ fees is the best way to do it. We strongly believe genuine claimants should still be able to pursue proper compensation with the advice of an independent lawyer.

Of course, injured people can negotiate directly with the insurance company. But is this really in their best interests? Our research showed that using a lawyer increased the compensation on offer from an insurer by up to ten times. And it’s not just us. The Financial Services Authority found that people were awarded just under 275 per cent more in compensation through court proceedings. It’s no surprise really as the conflict is huge. Insurers are commercial organisations looking to maximise profits for shareholders, and reduce the compensation paid out to injured people. This is a key element of increasing their profits.

But redundancy has its costs too. The taxman loses out when law firms close. Unemployment brings a greater burden on the country. The costs of caring for injured people who don’t receive the compensation they need because they can’t find help to obtain it, fall on the NHS and the state rather than the wrongdoer. It’s hardly a vote winner.

So, who will help the victims when all the lawyers are priced out of the market? Who will advise the injured person as to the right amount of compensation? Who will prioritise their needs for rehabilitation? Who will make this a fair fight? Do we really want to lose the good guys?

Are we being duped?
Evans Deborah | 09 Jan 2013

Lawyers protesting that their costs are to be slashed are unlikely to generate a wave of sympathy from the public. But what if the outcome of the latest set of Government reforms is to stop injured people getting the justice they deserve? The reality is that if lawyers’ fees are fixed too low, there simply will not be any independent advice available for the injured man on the street. The general public won’t miss the lawyers until they are gone, and they need proper independent legal advice.

When you encounter someone in pain, do you just wince and pass by, glad it isn’t you? Or do you stop and help? The things APIL lawyers do makes life more bearable for injured people – whether it is to get them compensation, rehabilitation, or care. If you are injured, you may need time off work – your income stream may reduce or stop. No-one wants mounting debt on top of an injury.

If you were told that an outcome of the reforms would be to leave injured people on their own to argue with insurance companies for the justice they deserve, you would probably be at best lukewarm about the proposals. Many of you may have had insurance claims in the past – perhaps for damaged vehicles or stolen items – and will know how difficult it is to recover what you are owed.  In these situations the claim is easy for you to value – you know the cost of your car, or your stolen TV. But how do you start to value an injury?  How can you negotiate with an insurer if you don’t actually know what you are entitled to? Insurers will be quick to offer money to settle the case – how do you know if the figure is even in the right ballpark? We have conducted research which shows that the first offer from an insurer direct to a victim is often a fraction of the settlement gained when a lawyer is involved – many APIL lawyers reported getting settlements for the victim in excess of ten times the original offer. Not surprisingly, our research also showed that only 21 per cent of people would trust an insurer.

Current Government proposals will price many lawyers out of the market in cases worth between £1, 000 and £25,000 in damages. Whilst these claims are referred to as ‘low value’ (in comparison to a catastrophic injury for example) in reality they are anything but low value to the person who has been injured. Few people consider that amount of money small change. For a claim to be worth £25,000 the injuries need to be quite serious, such as a fractured jaw, and it is likely that there has been some loss of income. Should people in such an unfortunate position really be left to fend for themselves? Do not be fooled - slashing lawyer’s costs puts the injured person back in the position of the underdog fighting the big corporation.

The Government hopes that the reduced burden to the insurers for legal costs will bring down motor insurance premiums – a laudable aim when most of us are feeling the pinch. However, the proposals are extreme, and will do more harm than good. The reforms shouldn’t be at the cost of the injured person. There is a balance to be struck here. What’s the point of insurance if the victims who need to make claims are turned away or paid off cheaply?  As a society, we often don’t appreciate what we have until it’s gone, especially if you personally have yet to use it. Don’t be duped – these reforms have an unpalatable dark side.