The Premium of Justice

LONDON - There is little doubt that Lord Justice Jackson will recommend the implementation of fixed fees for all personal injury fast track claims. Indeed, as reported in the Law Society Gazette on 17th September 2009, APIL (the Association of Personal Injury Lawyers) walked out of talks with the Civil Justice Council. The talks had been organised at the request of Lord Justice Jackson but APIL had concerns that the talks focused entirely on the amounts of the fixed fees rather than the justification of them.

The introduction of fixed fees is in theory a compelling argument, driving down the cost of litigation, which can at times be more than the compensation awarded to the claimant. However, Lord Justice Jackson has neglected the fact that although insurance companies predominately bear the costs of litigation they are simultaneously the main protagonists.

It is also a widely held belief within the personal injury sector that insurers actively engage in tactics to drive down the award of compensation through early settlements or third party capture. Take the example of Colossus, the software used by the insurance industry in the United Kingdom and many part of the United States to calculate settlement figures for personal injury claims. It is argued by some that Colossus fails to recognise pain, suffering and the inconvenience caused by the injury. Essentially the calculation is only as good as the data input into the software. Invariably the settlement figure offered by the insurance company comes out on the lower end.

Rebecca Young of Accidents Direct states “insurance companies are the defendants in the vast majority of personal injury claims [www.accidentsdirect.com/personal-injury.aspx] but they are also the claimant in an equally high percentage. The insurance industry appears to be driving down settlement amounts, knowing that they are equally as likely to be the defendant as they are a claimant. Why would they want to start a compensation war with other insurance providers?”

It therefore seems that the insurance industry is trying to encourage a move to drive down the cost of litigation (whilst being the main protagonist of litigation) whilst maintaining a long established practice of driving down the costs of compensation.

So who is it that will ultimately suffer - the injured party seems to be one logical conclusion? The current judicial fixation with driving down the cost of litigation could be at the expense of the injured party’s ability to access justice. Access to justice is not just the right to compensation or access to a lawyer but a right to the appropriate amount of compensation. In the current format a claimant can enter into a Conditional Fee Agreement (No Win No Fee [www.accidentsdirect.com/no-win-no-fee.aspx] where the defendant pays the compensation and the cost of the litigation) and receive a just amount of compensation. Rebecca Young of Accidents Direct believes that “Claims Management Companies such as Accidents Direct [www.accidentsdirect.com/]are not connected to the insurance industry. Therefore we are not incentivised to reduce the amount of compensation awarded to our clients. Of course further measures should be taken if it is felt that a minority of law firms are charging excessive fees but in the majority of cases this is not the case. The legal hierarchy may unwittingly be putting a price on justice by helping the insurance industry save on costs and settlement amounts.”

Source: Accidents Direct

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