Articles From the Team

Personal injury market

The North West has traditionally boasted a rich and diverse array of law firms specialising in personal injury law well placed to offer advice and representation to both claimants and insurers. The personal injury market has long been a crucial part of our regions legal services and firms of all shapes and sizes occupy prominent positions within our regions city centres in addition to offering legal advice on the high street throughout the various market towns. Nobody can argue that the shift faced by this sector in recent years has been anything other than seismic and this has certainly had an impact on the type of resource being recruited to deal with personal injury claims. Personal injury firms and departments have faced an ever evolving landscape with The Jackson Reforms (the gift which just keeps on giving…) and the deregulation of the legal services market; each contributing to an unprecedented transformation.

Jackson Reforms

There was a general view amongst the senior judiciary that the cost of civil justice in England and Wales was disproportionate to the issues. In response and in a move to address disproportionality the Master of the Rolls, Lord Clarke of Stone-cum-Ebony asked Lord Justice Jackson to conduct a review into civil litigation costs; his recommendations were made in 2010 and implanted through the Legal Aid sentencing and punishment of Offenders Act 2012 (LASPO).

The report spans nearly 600 pages but its main recommendations can be summarised as;

- The general rule is that costs system should be based on legal expenses that reflect the nature/complexity of the case. - Success fees and after the event insurance premiums should not be recoverable from defendants in no win, no fee cases. - General damages awards for personal injuries and other civil wrongs should be increased by 10%. The Court has stated that “with effect from 1 April 2013, the proper level of general damages in all civil claims for (i) pain and suffering, (ii) loss of amenity, (iii) physical inconvenience and discomfort, (iv) social discredit, or (v) mental distress, will be 10% higher than previously” - There should be a ban on referral fees. - Claimants should only make a small contribution to defendant costs if a claim is unsuccessful (as long as they have behaved reasonably). This is known as Qualified one-way costs shifting (QOCS). - There should be fixed costs for "fast track" cases (with a claim up to £25,000) and the limit for a small claim has been increased to £10,000 (from £5,000). - Damages-based agreements (DBAs)/contingency fees are now permitted. Under a DBA, the lawyers' fees will be determined as a percentage of the damages recovered by the client. In personal injury cases, there will be a limit of 25% of the damages. - "Before the event’ legal insurance should be promoted.

These changes are widely recognised by the profession as fundamental and have undoubtedly reshaped the landscape and will continue to do so for many years to come. So when the Ministry of Justice further added that £700 of fixed, recoverable costs was to be stripped out of every single RTA Portal claim below a value of £10,000 there was widespread fear for the future and a feeling of real concern in relation to access to justice for claimants. Law firms of all sizes were worried and clearly faced huge challenges in terms of adopting a model capable of transacting lower level claims which undoubtedly had a lower profit margin, diversifying into niche injury areas (or other disciplines entirely) quickly enough to maintain fee income levels and dealing with an existing workforce that had skills and pay scales evolved to suit a very different market. So what has the impact been on those working in personal injury?

Recruitment is often used as a litmus test and we have certainly experienced peaks of activities, fluctuations in confidence and emerging trends as firms and lawyers alike have grappled with the changes. It is widely acknowledged that paralegals have always played an important role and featured prominently in the resourcing models at personal injury firms, especially those dealing with lower value claims. We have experienced high levels of recruitment into entry level positions to those with 2 years experience to join large claims handler teams. The Association of Personal Injury Lawyers (APIL) “recognises that there is an increasing number of paralegals/legal support staff who are taking on permanent legal positions within PI practices and running a full caseload or assisting with a caseload under supervision.” Clearly if firms are well organised and the inexperienced paralegals well supervised then firms can transact lower value claims within the constraints set by lower margins. It also means that more those looking for an entry point into the legal profession there is a viable and defined career path, not just to work towards qualification but also to establish a future as a career paralegal.

In recent times we have also experienced an ever increased demand for solicitors able to deal with multi-track work, clinical negligence, occupational illness, serious injuries – head, spinal and amputation – travel and abuse claims. All of this is in response to firms recognising the need to diversify and have the right lawyers, focusing on the right work, for the right cost. As firms adopt new models at the lower end they have looked at ways of developing departments and expertise to deal with cases able to generate higher profits to plug the gap left. It is within these niche areas where we have undoubtedly seen the majority of recruitment for qualified lawyers. Lawyers have quickly recognised this trend and we have seen desire from newly qualified solicitors to qualify into disciplines such as those mentioned above in addition to more experienced lawyers looking to develop and diversify their experience. This demand has helped to both stabilise salaries and ensure that the rich pool of talent within the personal injury market is retained and redeployed within a related area.