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WOOLF 10 YEARS ON: HAS IT WORKED?

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

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WOOLF 10 YEARS ON: HAS IT WORKED?

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  1. WOOLF 10 YEARS ON: HAS IT WORKED? • Pre Woolf situation • Aims • Vision • Success to date? • DCA Proposals • Feedback • Potential Impact

  2. PRE WOOLF: PERCEIVED INJUSTICES • Too expensive • Too slow • Too uncertain • Too adversarial

  3. AIMS OF WOOLF REFORMS • Fairness • Tighter Timeframes • To be understandable to those who use them • Effective, adequately resourced and organised court service

  4. WOOLF’S VISION • Litigation as a last resort • Reduced time scales • Costs more affordable and predictable

  5. 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

  6. 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.

  7. 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

  8. 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

  9. 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

  10. HAVE THE WOOLF REFORMS FULFILLED THEIR AIMS? More understandable? • 45th Edition of CPR • 30 statutory instruments Adequately resourced and organised? • No specialist judges or trial centres • Court service budget is limited

  11. HAVE THE WOOLF REFORMS FULFILLED THEIR AIMS? Other Factors • Woolf reforms in isolation? • New costs regime • Lower discount rates • Revised Ogden Tables • JSB Guidelines

  12. 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

  13. Defendants as winners: Judgements based on merit Faster disposal of claims Predictive costs Defendants as losers: Cost of claims Disproportionate costs WINNERS AND LOSERS

  14. WINNERS Claimants and their solicitors LOSERS Court staff Judges Defendants and their solicitors WINNERS AND LOSERS Insurers: Winners or Losers?

  15. NEW DCA CONSULTATION Proposals: • Raising the Small Claims Limit • Raising the Fast Track Limited to £25,000 3. Streamlining the personal injury claims process

  16. 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

  17. 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

  18. 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

  19. 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

  20. 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

  21. 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

  22. 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?

  23. 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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