Progress of the LASPO Bill

Friday 20th January, 2012

The latest modification to the Bill introduced by the Government is to allow the recoverability of premiums for insuring the cost of independent expert reports for medical negligence claims. This is hopelessly illogical. It will not help one iota in preserving access to justice for clinical negligence claims. It is like giving a sticking plaster to a man with a broken leg. The mere fact that claimants can insure against this aspect of their costs exposure will not be of any comfort if they have an exposure to the costs of the NHSLA or their own solicitor’s costs. Quite apart from this, as one of the leading Clinical negligence ATE providers, we fail to see how insuring this element of costs alone can possibly preserve a viable market.

We also are aware that there are significant problems arising in the discussions between the Civil Justice Council and the MoJ about the detail of the operation of Qualified One Way Costs shifting (QOCs). There appears to be a realisation that QOCs will encourage speculative claims by individuals who have no assets at all and/or litigants in person.

The point being such claimants can pursue their claims regardless of merit and can effectively force defendant insurers (who are supposed to be the beneficiaries of this litigation) to make offers to settle the claim because the costs of defending the litigation will be much higher than the cost of settlement.

Of course, there is a mechanism already in place to deter speculative litigation, namely CFAs and ATE insurance! Both solicitors and ATE insurers have no interest in supporting such litigation.

Another difficulty is the extent to which defendant insurers will be able to recoup their costs from a claimant who fails to beat their Part 36 offer. On the one hand the Jacksonites, if we can call them this, want to create a situation where ATE is not required. On the other hand by putting the claimant on risk as to any element of the Defendants' costs creates a need for, guess what, ATE insurance.

Information from those involved in trying to produce a workable solution suggests that no-one seems to know how it will work. Mr Djanogly, in a letter to us “talks of working constructively with interested parties on the details of how the proposals will be implemented” and that the Civil Justice Council has been tasked with three areas in respect of QOCS; namely, behavioural tests for QOCS (no, I do not know what that means either), the operation of the additional (our underlining) Part 36 penalty in higher value and non-money claims and finally the content of a Practice Direction to support the new test of proportionality.

Once again it seems utterly deplorable that in their rush to achieve something, anything , this Government is engineering the destruction of a system that works with one where they have no idea how it will work! Further it means that those involved in litigation and in its funding are thrown into a period of considerable uncertainty because until such time as the details are known of how the Jackson proposals are supposed to work, it is impossible to plan for the changes.

We can only hope that the House of Lords will continue to treat the LASPO bill with the scepticism it deserves, particularly since the Government claims to be implementing Lord Justice Jackson's proposals. It will be recalled that his reforms were based on the Legal Aid system staying much as it was. Given the savage reduction proposed to the Legal Aid system, this Government cannot even claim that they are fulfilling the Jackson recommendations.

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