Thanks Dean for a thought provoking blog.
Hi Graham
I read the report in detail before I wrote the blog article (and would never have done otherwise). It is a very interesting proposition. My concern (well, my main concern) is how much of the idea will be lost in transition. As I have said above, in principle, it is a good idea. Implicit in that view is the fact that I agree increased use of technology is a potentially beneficial evolution, but how far do we go with it? More accurately, how far is it safe to go?
To expand, there are several points that arise out of the above paragraph. The first is that the CJC have consulted on this but won’t be implementing it, just as LJ Jackson wrote the report which led to LASPO, but didn’t implement it. The Government will be implementing it, if anyone does. My cynicism derives from long experience of systems implemented by the Government - ie: the
Low Value Claims Portal which was always expected by commentators to lead to precisely the behaviour to which it has led – namely that when you cut recoverable legal costs for a case which could take anything from 3 to 18 months to resolve, by 60% (£1,350 to £500),
there is only one way solicitors can make a profit. Unpalatable to talk about, even taboo, but true.
As I said in my blog, the Government and technology have had a rocky relationship. Whilst the idea may be sound, I don’t accept that the Government would implement this proposal, if they do, to fix an “ozone hole” of their own creation, for any reason other than to shore up (or reduce the drain on) the public purse.
Putting those points together, if the Government implements this, I do not expect anything better than the Low Value Claims Portal, which, it is commonly accepted in the industry, is responsible for dramatic growth in the professional negligence industry in the last 12 months: ie: lawyers rush and/or screw up your case; more lawyers sue them. There is even now a rash of adverts for firms that deal with such work.
The supreme irony of this point is that most injury claims are of value of less than £5000 (approximately 90%). If your lawyer screws up your case, because the injury case is settled albeit negligently, any resultant professional negligence case will be a contract case, and therefore within the small claims limit (the irony should be becoming apparent right about now).
So the Government's brainchild - the Low Value Claims Portal - is responsible for significant growth in the small claims industry. Another unintended consequence from Government policy.
Their implementation of what was actually not a bad idea, on the face of it, was short sighted and in fact many of the Government's proposals were
steered almost entirely at the behest of the insurer lobby.
And again.
So, the point is, however good the idea is (and I did agree in my original article that it is in theory), I don’t see it working out in practice that way if the Government implements it.
Regarding the Ebay point, I understand your intention in referring to them in the report. I still believe the comparison is misconceived.
It is truly a laudable success story that Ebay can resolve 60 million trading disagreements every year, but, as I said, just because such a system can resolve 60 million trading disagreements every year, does not mean that a similar system would be able to resolve large volumes of potentially complicated consumer and small business disputes, involving construction, vehicle claims, consumer protection issues, consumer credit issues, landlord and tenant disputes, employment issues (other than tribunal)…. The list goes on.
To suggest otherwise, is analogous to arguing that a cohort of cataract removal surgeons are qualified to carry out all and any surgical procedures.
As you have asked for suggestions, for cases up to £25,000, I think a hybrid of an online system and the ability to retain legal advice (and recover legal costs on successful conclusion) is necessary to meet this country’s obligation to rebuild access to justice.
I mentioned the £25,000 point above. I do think that the adoption of the Government’s value classification of “low value claims” as £25,000 is ill-considered. As we both know, that has been set as the new “Fast Track” level for monetary claims, including injury. So for now, you can employ a solicitor to run your case and claim back their costs in addition from the defendant (subject to a maximum of a 25% deduction for a success fee) if you win. I don’t know if there were any personal injury practitioners on the consultation panel, but if there were, they would probably understand the point I am making.
£25,000 in terms of an injury claim valuation, normally means someone who was not employed at the time of the accident, has suffered moderately serious (but not necessarily life changing) injuries, and has minimal other losses. Or alternatively, a claimant has suffered more minor injuries, with a period of lost earnings (or gratuitous care) claimed.
The point is that they haven’t LOST £25,000.
That figure compensates them for their injuries together with any associated losses, and whilst they may be out of pocket to the tune of several thousands of pounds in lost earnings, most people can get by. I speak from experience of dealing with these people for approaching 30 years.
Someone who has LOST £25,000 in a consumer or business deal that has gone south, is much more seriously financially affected and could lose their business or suffer serious adverse financial consequences. To risk that sort of sum without professional legal advice, at the click of a mouse,
is risking the same outcome that Lord Dyson was referring to here.
I hope that point is now clear.
My solution, as you ask, is to continue with the ODR plans, but lower the value - £10,000 max.
A trial run at £5,000 would be my preferred option, but up to £10,000 would be more proportionate. £25,000 is not a proportionate cap to this process.
For money claims of up to £25,000, people need to be able to employ a lawyer to do a proper job, and that takes time and money. Furthermore, the report talked about the risk of speculative claims, due to the easier process, as do you above. The retention of the right to claim legal costs from £10,000 to £25,000 in claim value, and exclusion of those claims from the process, would focus parties’ minds, and would in any event not encourage the sort of behaviour referred to in your report.
If the Government’s
true intention is
access to justice, and not
access to a process, I am sure they would agree.
Dean
