For too long claimants and their legal advisors have been blamed for the rise in the costs of civil litigation cases
(PRWeb UK) February 15, 2011
Delays caused by defendant insurers are in many cases causing a six-fold rise in the costs associated with pursuing a claim, according to research compiled by the Lincoln Law School and commissioned by National Accident Helpline.
The first study of its kind, Excessive & Disproportionate Costs in Litigation casts fresh doubt on current Government proposals to reform the ‘no win no fee’ compensation regime. This has prompted National Accident Helpline, the leading marketing group for solicitors specialising in personal injury, to call for an urgent review by the Ministry of Justice and the Financial Services Authority (FSA) into the effects of defendant insurer behaviour on the claims process.
The study, which involved an independent academic review of almost 20,000 cases, was commissioned in response to the ongoing Ministry of Justice consultation on Lord Justice Jackson’s proposals for reform of civil litigation. Specifically, it examines the unexplored defendant factors driving Lord Justice Jackson’s concern that cases are not settling early enough, giving rise to disproportionate costs. To date, the debate has focused only on claimant factors.
The research finds that defendant delay may be up to six times more costly than other causes of delay in civil litigation cases and that defendant action is a direct factor in one in four delayed cases where delay has been recorded.
The research shows that defendant delays add unnecessary court costs to cases where there is a failure to reach settlement. If a case goes to court, claimants win 90 per cent of the time, indicating that time and money is wasted progressing cases which could be attributed to the defendant’s failure to settle earlier.
Sam Porteous, chief executive, National Accident Helpline, said: “For too long claimants and their legal advisors have been blamed for the rise in the costs of civil litigation cases. Independent academic research and analysis of nearly 20,000 cases shows that it is actually the actions of defendant insurers which are driving up those costs. This results in significant delay and challenges the myth propagated by insurers that excessive costs are the fault of claimants.
“It makes me question whether some defendant insurers are using ‘delaying tactics’ as a means of discouraging claimants from pursuing their legitimate claims. Lord Justice Jackson’s proposals are a licence for insurers to make litigation uneconomic for claimants by dragging out cases and defending the indefensible.”
“If the Government is intent on reforming the system, then those reforms must result in a better, fairer and more transparent process. At this important time in the reform procedure, I call on the Ministry of Justice and FSA to undertake detailed scrutiny of the consequences of defendant behaviour before proceeding any further with changing the law in this area. The human cost of these reforms should not be underestimated or undervalued any longer.”
Professor Peysner, Lincoln Law School, said: “We have investigated defendant action on delay – an area previously unexplored – with a focus on personal injury and clinical negligence and conclude that defendant delay can sometimes be a significant factor leading to excessive costs.
“The costs of resolving a case are often twice the level of damages paid out and our analysis suggests a clear link between defendant delay and disproportionate costs."
“We broadly endorse Lord Jackson’s analysis that the failure to settle early is one factor increasing costs. However, we believe the reasons for that delay and its associated costs needs to be re-evaluated in light of our findings.”
National Accident Helpline is the leading marketing group for solicitors specialising in personal injury and is responsible for the recent campaign championing consumers’ rights to justice through the website http://www.underdog.co.uk
Notes to editors
Research aims and methodology
The research was commissioned by National Accident Helpline (NAH) following the Ministry of Justice’s (MOJ) consultation on its proposals for reform of civil litigation costs in England and Wales. The research considers the causes of excessive and disproportionate costs in litigation, in particular in personal injury and clinical negligence claims. The academic study was undertaken in January 2011 by Dr Angus Nurse and Professor John Peysner of Lincoln Law School, two leading academics in civil litigation. The research was designed to look specifically at the following aspects:
- To test the hypothesis that defendant action, specifically defendant caused delay, is a significant contributor to excessive costs in litigation;
- To consider the causes of excessive costs set out in Chapter 4, paragraph 3.1 of Lord Justice Jackson’s final report of costs in civil litigation and with reference specifically to new data supplied by NAH to examine whether defendant action is a contributor to costs, and if so, to what extent;
- To analyse the data considered by Lord Justice Jackson (found at Appendices 1-28
of his preliminary report) and where possible, examine whether this data supports his conclusions as to the causes of excessive costs;
- To identify whether defendant delay results in quantifiable increased costs and,
where possible, to draw conclusions on whether defendant delay in admitting liability contributes significantly to litigation costs; and
- To identify whether defendant action is a factor which, if altered, has the potential to reduce both sides’ costs.
Note on data sets
The research was completed primarily by analysis of data in MS Excel 2007 together with examination and analysis of the policy conclusions drawn by Lord Justice Jackson in his preliminary report and final report. The report analyses data considered by Lord Justice Jackson and data provided by NAH.
Lord Justice Jackson data
In his review of civil litigation Lord Justice Jackson considered a range of data on costs including court data, summary data from the Compensation Recovery Unit, several individual datasets on cases handled by liability insurers and a report on personal injury costs prepared by Frontier Economics and the Association of British Insurers (ABI).
Data provided by NAH Ltd included:
- Allianz data on 129,433 ATE Premiums, with additional data on the operation of the ATE premium and the duration/completion of the case from 2000 - 2010.
- Benchmarking Data – Jonah data on 4376 cases that had been to court and closed and the number of these cases that had been won, together with approximately 20,000 cases where defendant delay had been recorded as part of the recording of protocol tasks. 2006 – 2010.
- Firms’ data – a smaller dataset containing data from firms covering a month’s worth of referrals sent out by NAH in November 2006.
About National Accident Helpline
National Accident Helpline is the leading marketing and legal services company for solicitors who specialise in Personal Injury law and represents more than 100 legal practices across the UK. If a consumer has had an accident which was someone else’s fault then we will put them in touch with a member firm, so they can seek redress for the injury they have suffered.
Through our national solicitor network, we champion consumer rights for people who have had accidents, helping those with genuine claims to seek redress and gain access to justice to help aid their recovery.
National Accident Helpline is authorised by the Ministry of Justice in respect of regulated claims management activities and is a registered company, incorporated in the UK. For more information please visit the website: http://www.underdog.co.uk
For media enquiries please contact Neil Drake, PR Manager, National Accident Helpline: neil(dot)drake(at)nahl(dot)co(dot)uk, Tel 01536 527 500/ 07875 391981