The Future of PI Claims The Claimant’s Perspective Andrew Morgan Partner, Asbestos Disease Claims 21 March 2013

Non Recoverability of Success Fees Non Recoverability of Premiums Extension of RTA Portal to £ Extension of RTA Portal to EL and PL Extension of Small Claims to £5 000 Introduction of DBAs Loss of Legal Aid Costs Budgeting Part 36 Offers Simmons v Castle uplift The Changes

Recoverable Costs In successful court cases of any kind the loser pays the winner’s legal costs Not like in America But the amount the loser pays is controlled and regulated by Court Rules Three Broad Regimes Small Claims Fast Track Multi Track And Fixed Recoverable Costs in RTA cases

NOWClaim Value £1 000£5 000£10 000£25 000£ DiseaseSCMT PLSCFT MT ELSCFT MT RTASCFTFC MT Cases10%40%20% 10% Total10% SC55% FT35% MT

SOONClaim Value £1 000£5 000£10 000£25 000£ DiseaseSC MT PLSC FTFC MT ELSC FTFC MT RTASC FTFC MT Cases10%40%20% 10% Total50% SC35% FT15% MT

Discussion Total market? Personal injury costs to approach £10bn, report says Insurance Age - 25 May 2011 Personal injury claims low by YouGov Thu August 16, in 4 Brits have had personal injury in last five yearsYouGov Compensation claims not common - Seeking compensation for personal injury is not widespread, with only one in five (20%) of those suffering personal injury or an accident having made a claim. The overwhelming majority have not done so, with the main reason given for not pursuing a claim being that the injury was not bad enough. So a huge untapped market for PI claims!

Prediction In nearly all cases where CFAs are used nearly all firms will charge their client the full success fee – up to 25% damages in smaller claims. Clients might prefer the new “Damages Based Agreements”

Discussion At present the Small Claims Court is available for claims below £1,000. There is not enough flesh on the claim to pay for advice or representation That changes if damages are increased to £5,000 25% of damages, up to £1,250, become available for funding That compares with £550 - £1,100 proposed recoverable costs in the Fast Track

Prediction A small number of very highly geared Legal Service Providers running cases on DBAs will come to dominate the market in mid-tier claims – BT? AA? British Gas? Solicitors?

Prediction The law of large numbers means unregulated claims handlers will have a field day in the Small Claims Courts – recovering costs using Damages Based Agreements

Prediction Lack of professional representation will lead to widespread undercompensation – already evident in the current RTA process

Prediction With regulated professionals removed from the lower end of the market, fraud will flourish and organised crime will muscle in

Consequences Claimants might be awarded more but will get less Smaller Claimant firms will collapse Widespread redundancies on Claimant side Loss of tax revenue to Exchequer Defendants will save on costs/ damages paid Defendants may benefit from more streamlined mechanised and automated system – less “negotiation” - insurance redundancies?

The New Frontier