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Lawyers suing lawyers: professional negligence claims against personal injury practitioners

2 people with an injury claim

By David Pipkin Director, Underwriting Division and Jacob White, Underwriter

(Estimated reading time: 5 minutes, 18 seconds)

At a recent Professional Negligence Lawyers Association (PNLA) event, sponsored by Temple Legal Protection, our attention was drawn to an article providing the comments of Richard Beaty, counsel from Hailsham Chambers. Richard expressed the view that there was a growing perception amongst indemnity insurers and professional clients on the topic of professional negligence claims against lawyers that the under-settlement of medical injury claims is on the rise.

On trend
This is a trend that our commercial underwriting team has noticed in the cases that are being sent in by professional negligence practitioners. There has been a noticeable increase in the volume of professional negligence claims against lawyers that mishandled a client’s personal injury claim.

Many of these cases have historically been based on the failure of the solicitor handling the personal injury claim to issue proceedings in time. But increasingly the allegation is that a case has been settled at a substantial undervalue.

Why is this?
More work is required on these cases, but there is now less time for senior practitioners to do it.

Claimant personal injury lawyers have had to adapt to the Coalition Government’s legal reforms.

One of the consequences of these reforms has been that firms are under pressure to increase their WIP, as they will not benefit from substantial profit costs from clients’ success fees, previously recoverable from the unsuccessful party. The removal of civil liability for breach of statutory duty has also increased the amount of work required in fully investigating and pleading these cases; it is no longer a cause of action in its own right and a breach must be used to show negligence at common law.

Firms may therefore be taking on a higher level of work than they had done previously, to off-set concerns about a reduction in firm’s profit, with the potential result being that individual clients receive less contact time with their solicitor. Where previously senior associates or partners had been integral to risk assessment, case-management and assessment of quantum, much of this work may now be done by more junior lawyers or paralegals.

The net result is that a client instructing such a firm to conduct its personal injury case is more likely to have their case valued incorrectly.

Quantifying the claim – how it goes wrong
The Judicial College Guidelines provide an indication of what a claimant may receive for the type of injury they have sustained. The Guidelines are not law. They do not provide a necessarily useful indication of how to approach valuing a case where a client has sustained multiple injuries. They are worthless without supporting case law. If used incorrectly, they are of no use to a claimant.

The individual carrying out the quantum assessment must also ensure that all the client’s injuries have been taken into account. Pressure to open more files to increase WIP increases the likelihood of an injury being missed. The correct type of report from a medical professional must be obtained – if a claimant has had a fall and the medical report highlights the need for a report from a consultant neurologist, has this been flagged up as absolutely necessary?

There is also the importance of considering the ‘Smith v Manchester’ and ‘Morris v Johnson Matthey’ principles – will the injury weaken the claimant’s position in the job market? Will the injury prevent the claimant from continuing to work in his given trade, resulting in ‘humdrum work’?

If the injury will prevent the claimant from working indefinitely, it is of paramount importance that the Ogden tables are used correctly in identifying future loss.

Apart from causing the under settlement of the claim, the failure to accurately assess quantum also puts the claimant at costs risk under QOCS. A claimant is not just at risk of receiving substantially less than what they are due, but also at risk of paying the defendant’s costs.

Brave claimants – the importance of getting the second claim right
A claimant suing a personal injury solicitor for undervaluing their claim has the right to be sceptical. They have (probably) instructed a solicitor for the first time. They have been let down. They still require compensation. There will be 2 immediate questions for them to answer: (1) how will they find appropriate legal representation to sue their solicitor and (2) how will their second claim be funded.

Who is an appropriate Lawyer? Logic might dictate the obvious choice is an experienced personal or medical injury lawyer but from an underwriter’s perspective that may not be the best course. We do on occasion see cases from such lawyers where the assessment of the prospects of success are overconfident and do not fully assess causation. The best prepared cases come from lawyers who have built up experience in handling a range of professional negligence work. These are the case we are more likely to insure.

Temple has a strong and historic connection with the PNLA. Members of the PNLA receive preferential rates from Temple.

It is probable that in the personal injury claim the claimant was able to find a lawyer who would act under a conditional fee agreement (CFA). The client is likely to have also had litigation insurance. As QOCS will not apply to costs in the professional negligence claim, it is of paramount importance that the client is aware of the costs risk.

Some practitioners will be able to offer a CFA and litigation insurance arrangement to a professional negligence claimant. Jonathan Sachs, Partner at Irwin Mitchell and member of the PNLA, says:

“There is nothing straightforward about a personal injury or a clinical negligence claim. The same applies to a professional negligence claim for lost chance or under settlement. A good team requires both of these specialists working together and an ATE insurance policy which covers and possibly funds substantial disbursements. The Temple delegated ATE funding scheme is uniquely suitable for these claims”.

Funding professional negligence actions
Temple can offer a claimant pursuing a professional negligence claim insurance cover for the other side’s costs. Obtaining the insurance have no upfront cost – there is no assessment fee and no upfront premium. Payment of the premium is deferred to the conclusion of the case and contingent on success.

Temple also offers disbursement funding to claimants for court fees, expert reports and mediator fees. This helps unlock cases and puts a claimant in the position of being able to pursue their claim.

Are you a professional negligence practitioner and seeing an increase in under-settled personal injury cases?

Get in contact with our commercial team to discuss our tailored approach to professional negligence cases.

You may also want to read about

David Pipkin

Non-Executive Director
Read articles by David Pipkin

David Pipkin

David was Director of Temple’s Underwriting Division for 14 years during which time he supported Temple’s coverholders with his exceptional knowledge, expert guidance and friendly countenance.

He is now a Non-Executive member of the board supporting the strategic direction of the company and attending key events and meetings with our customers.

David has spent over 40 years as a Legal Executive specialising in personal injury litigation. Initially, he was a claimant litigator pursuing leading industrial accident and disease cases.

As an Associate at Davies Arnold Cooper for over a decade he managed a team of lawyers and acted for defendants in personal injury and general insurance litigation. In this role, he became involved in the early development of the ATE market, assisting the ABI in their involvement in the Court of Appeal test cases such as Callery v Gray.

As the London representative for FOIL he was involved in the liability insurers’ approach to ATE and worked with the government and judiciary in several key consultations. He was a member of the CILEX National Council for over 15 years and was CILEX President in 1995/6.


Read articles by David Pipkin