Coventry and others v Lawrence and another (No 2) 2014 UKSC 46 (Article 6 of the ECHR, the right to a fair trial).

The case of Coventry has caused a bit of a stir and alarm, probably only momentarily!

With the Supreme Court looking at the recoverability of CFAs and ATE premiums, what does it mean for us? Post Jackson uplifts and ATE premiums are not recoverable from defendants anyway, but what if the door is opened to look again at pre April 2013 cases still in the pipeline and those that have gone before. This is exactly what some commentators are flagging as a possibility in the still to be concluded Coventry case.

Changing the rules “after the event” is worrying as a principle and what about those claimants who in good faith took out an ATE on the basis of recoverable premiums? I can only foresee previously viable claims having to be discontinued, solicitors writing off WIP, overall this is yet another blow to the less well-off trying to get justice. In my view this is totally at odds with ‘Anglo Saxon’ justice for all.

For ATE claimants, solicitors and insurers, the worry I have is that defendants will use this opportunity to their advantage and delay cost settlements. Yes, defendants will say to claimants that cost settlement will be ‘pending the outcome of proceedings’ (to those defendant solicitors reading this, we understand even if we do not appreciate).

Notwithstanding the above, the Coventry ruling does not allow defendants to refuse to pay success fees and/or ATE premiums in the interim, clearly stating that defendants are still liable to pay claimants success fees and ATE premiums under the Access to Justice Act 1999. There is anecdotal evidence that the SCCO has rejected a number of applications for a stay/adjournment in success fee/ATE premium costs cases until the Supreme Court makes its mind up, the Court having delayed any judgement until the Government has had a chance to respond, (will we see the Attorney General once again personally representing the Government?).

The big problem, potentially, is for the Government. Under Article 6 (the right to a fair trial) of the ECHR, if the Coventry argument is successful, the potential for defendants’ compensation claims, could amount to tens of billions of pounds.

If the decision is ultimately in favour of Coventry the consequences for pre April 2013 CFAs and ATE insurance policies is that CFA uplift and ATE insurance premiums would no longer be recoverable from defendants and strictly would be paid from any recovery or other assets if any. To the lawyers reading this, would the Government have to compensate any losing party who has been ordered to pay CFA uplift or an ATE insurance premium, or indeed costs going back to 1999 and the Woolf Reforms? The government and the judiciary will not want this can of worms to be opened and it is likely that a ‘pragmatic’ decision will be made. Nevertheless, it is a fascinating situation that feeds into the current national focus and debate on who makes the laws of the Country, the national government or an intra-national organisation.

The AvMA conference in Brighton last weekend was a great success. Thank you to everyone who came to see us, who asked questions, asked for more information and put their card in the draw for a bottle of Bollinger. (See our tweet of the 2^nd for the lucky winner.)

The recurring theme in all our conversations with delegates was funding. I know that we have been saying this for a while but it really is ever more apparent that the cashflow v. claimant requirements is an increasingly difficult equation. The smaller value Clin Neg cases are simply being squeezed out of the market at the same time as balance sheets are being squeezed under the weight of disbursements. There is no getting around the fact that claimants need to be realistic and that they must now be part of the on-going discussions and involved from the outset.

Where and when this will lead to is to my mind the accounting truth: businesses fail through lack of cash. We do not intend to create an Armageddon scenario, rather point out that there is a solution. Disbursement funding is available through QLP and it is fair and affordable. Claimants’ liability is ring fenced, is back ended and comes with full protection under Consumer Law.

We were also impressed with some of feedback on the usefulness and topicality of the breakout sessions which covered everything from frozen shoulders (Andrea has been there) to the very on message feedback from the diabetes session, “sugar is bad”.

Please see our blog of 5^th March 2014, QLP funding – funding for clinical negligence (CN) cases.

It’s a funny old world.  The iconic Lloyd’s building in Lime Street (London not Liverpool) is now owned by the Chinese.  This is a grade one listed building, occupied by Lloyd’s of London,rumours abound in the London Insurance Market that Lloyd’s are looking for a new home.

First thing that springs to mind, what will be the building’s new name?  After all wherever Lloyd’s ends up will be known as The Lloyd’s Building.  Its only in the last few years that the ’58 building has been redeveloped (knocked down and replaced), its now the Willis Building.

Lloyd’s is one of the largest insurance markets in the world, it has been going for hundreds of years and has created many new areas of insurance.  One thing has been constant during the centuries, business is done face to face.

In this modern age with all our electronic gadgets, increasingly things are done in the ether.  There is no need to meet face to face, sometimes not even a telephone call.  However, whilst we embrace the new we still stick to the tried and tested ways because they work, it is easier to work with someone you know than a bland email.  Our chaps wonder around the country talking to people, making contacts and establishing relationships.  It works, its amazing how long these meetings last in peoples’ memories.  Sometimes it can be a year or more, we then get a call, can you help?  We can!

If you want to meet, get in contact.

We have all seen the cookery shows on the telly, perfect recipes cooked to perfection (mostly!).  Well we can look at Professional Indemnity Insurance in the same light, before we start to cook our recipe, we need to look at the ingredients.  There are two parts to the process:

Insurers – come in two flavours, plain (unrated) and self-raising (rated).  Each has its own part of the market, plain is usually looking for up to 10 partner firms and typically many rated insurers have limited appetite below 10 partners.

Brokers – again they come in many flavours, including producing brokers who find the solicitors firms, placing brokers who find the insurers and general brokers who do both.

So how do they all mix?

Bigger law firms usually have a relationship with a large broking firm.  They agree a fee and the broker will supply all their insurance needs, these are usually long term and established relationships.  The bigger (rated) insurers tend to prefer these relationships.

For the rest of us it’s a little more complicated, because in recent years there has been a scarcity of affordable rated insurers looking at less than 10 partner firms the unrated market has risen in importance. We need to be able to separate the good from the rest as buying the cheapest ingredients doesn’t always make for a happy mix.

Unrated insurers carry reinsurance (basically insurance on insurance) and looking at the reinsurers we find that some are rated.  This should provide comfort.

Back to the recipe, ingredients are next, no broker has access to the whole market, some insurers will only deal with brokers, sometimes only one broker, solicitors cannot access these markets directly. QLP can, we become sub-brokers to access these markets.  For firms the core ingredient for a good PII season is the application form, a fully complete form will give the underwriter a quick way to see if they wants to dig deeper, they will then produce a set of requirements (ingredients) they need to take the matter further.

Fortunately we have a good idea as to these ingredients:

• Application      form, fully completed
• Full      disclosure of claims history (6 years worth)
• Copy of      firm’s headed paper (one sheet of paper)
• Supplementary      questionnaires (eg conveyancing) as required
• Firm’s      accounts (last 2 years)
• Explanation      of any niggles

All bound together in a nice neat bundle.  The better quality the application pack the more time an underwriter will take to look at the package.

With all renewals on the same day (it will take time to spread throughout the year) underwriters need to distil the deluge of applications down to the ones they want to offer terms on, the easier we make it for them the better the chances of a competitive quote.

Every year there are thousands of cakes presented, you need to stand out.  Of course there are a number of things you must not do, for example, paper the market, send an application to all and sundry, that generally ends in a no.

We know underwriters and their likes, we can tailor an application to a particular market, we can improve chances of success and take all the drag out of an application.

So the motto is clear, ‘Start early to get a reasonable quote’.

We are now over a year ‘Post Jackson’, what is the effect on the CN market?

Not good I’m afraid.  Every day we hear of new problems with healthcare provision in this country so the need for legal recourse remains as strong as ever and the perverse effects of the new regime are becoming much clearer.  Potentially the most pernicious effect is that of not being able to obtain legal representation as solicitors cannot afford to take on some of the smaller claims.

The problem with CN is that even small cases can be very complex both from a medical and legal point of view.  With proportionality now to the fore, these cases are becoming harder to run with certainty, however legally meritorious.  The rules are being strictly enforced (some say too strictly), costs are being kept on a very tight rein, proportionality has risen in importance.  Consequently signing up new clients has become a long drawn out process.  Whilst some of the insurance premium is recoverable, claimants, want and indeed need to know how much they will have to pay, and the cost v. benefit equation is not always an easy question to answer at the outset.

Where do we go from here?

The AvMA conference Brighton Metropole June 27 & 28

As many of you will know the charity Action against Medical Accidents (AvMA) campaigns for patient safety and justice.  They have noticed that those with smaller claims are finding it increasingly difficult to secure representation.  We continue to work closely with our solicitor clients and insurance partners to find solutions in terms of ATE insurance and funding.  We will be exhibiting at AvMA’s Brighton conference so please come and find us if you are there and let us know your thoughts.