WOOLF 10 YEARS ON: HAS IT WORKED?

1
WOOLF 10 YEARS ON HAS IT WORKED?

• Pre Woolf situation
• Aims
• Vision
• Success to date?
• DCA Proposals
• Feedback
• Potential Impact

2
PRE WOOLF PERCEIVED INJUSTICES

• Too expensive
• Too slow
• Too uncertain
• Too adversarial

3
AIMS OF WOOLF REFORMS

• Fairness
• Tighter Timeframes
• To be understandable to those who use them
• Effective, adequately resourced and organised
  court service

4
WOOLFS VISION

• Litigation as a last resort
• Reduced time scales
• Costs more affordable and predictable

5
HAS WOOLFS VISION BEEN ACHIEVED?

• Avoiding Litigation
• County Court Claims Issued
• 2,245,324 in 1998
• 1,870,374 in 2005
• High Court (QBD) Claims Issued
• 142,505 in 1996
• 15,317 in 2005
• HOWEVERthe number of bodily injury claims
  reported to UK motor insurers rose by 3 a year
  between 1996 and 2006

6
HAS WOOLFS VISION BEEN ACHIEVED?

• Issue Fees
• Have largely increased in line with RPI
• HOWEVER
• With effect from 1 October 2007, allocation fees
  have increased and hearing fees have been
  introduced.

7
HAS WOOLFS VISION BEEN ACHIEVED?

• Legal Fees
• Bodily injury claims paid out by UK motor
  insurers
• Costs up by 840 in 20 years
• Total cost of claims - up by
• 9.5 per year
• Costs for claims over 5 million
• up by 30 a year

8
HAS WOOLFS VISION BEEN ACHIEVED?

• Solicitors Hourly Rates
• Central London rates for Grade 1 fee earners
• 260 per hour in 1999
• 380 per hour in 2007
• RPI for 2007 - 393.97
• Time from Issue to Trial
• 79 weeks in 1999
• 58 weeks in 2005

9
HAVE THE WOOLF REFORMS FULFILLED THEIR AIMS?

• Fairness?
• Simplified litigation
• Costs regime disadvantaged
• defendants?
• Reasonable Speed?
• Disparity and quality of court listings and staff
• Waiting times for interim hearings

10
HAVE THE WOOLF REFORMS FULFILLED THEIR AIMS?

• More understandable?
• 45th Edition of CPR
• 30 statutory instruments
• Adequately resourced and organised?
• No specialist judges or trial centres
• Court service budget is
• limited

11
HAVE THE WOOLF REFORMS FULFILLED THEIR AIMS?

• Other Factors
• Woolf reforms in isolation?
• New costs regime
• Lower discount rates
• Revised Ogden Tables
• JSB Guidelines

12
WINNERS AND LOSERS

• Claimants as winners
• Quicker settlement
• Increased damages
• Funding
• More judicial control

• Claimants as losers
• Fewer have a goclaims
• No legal aid
• Media/press
• Compensation culture
• Insurance premiums

13
WINNERS AND LOSERS

• Defendants as winners
• Judgements based on merit
• Faster disposal of claims
• Predictive costs

• Defendants as losers
• Cost of claims
• Disproportionate costs

14
WINNERS AND LOSERS

• WINNERS
• Claimants and their
• solicitors

• LOSERS
• Court staff
• Judges
• Defendants and their solicitors

Insurers Winners or Losers?
15
NEW DCA CONSULTATION

• Proposals
• Raising the Small Claims
• Limit
• Raising the Fast Track Limited to 25,000
• 3. Streamlining the personal injury claims
  process

16
STREAMLINING THE CLAIMS PROCESS

• The Proposals
• Early notification
• Standardised claim forms
• Moratorium on claimant solicitors
• investigations
• Settlement packs
• Standard damages / contributory negligence
  scenarios
• Set timeframes throughout the process

17
STREAMLINING THE CLAIMS PROCESS

• Where quantum negotiations breakdown
• Cases under 2,500 referred to a District Judge
  to be resolved by paper hearing
• Cases over 2,500 to go through a simplified
  review process

18
STREAMLINING THE CLAIMS PROCESS

• Responses
• Law Society supports proposals for claims under
  5,000
• APIL proposals only suitable for RTA cases
  where liability is obvious and should only be
  used in cases less than 2,500
• ABI welcomes streamlined process and believes
  paper review for quantum should apply regardless
  of value

19
STREAMLINING THE CLAIMS PROCESS

• Cost Proposals
• Fixed costs for each stage
• Fixed success fees
• No recovery of ATE premiums taken out at the
  commencement of the claim
• Claimants only to recover costs where they beat
  their own offer on claims up to 2,500

20
STREAMLINING THE CLAIMS PROCESS

• Law Society Response
• Reject the notion of the claimant having to beat
  their own offer to recover costs
• Supports fixed costs
• Concerned by the possible impact on ATE insurance
  

21
STREAMLINING THE CLAIMS PROCESS

• ABIs Response
• Supports staged fixed fees and success fees
• Supports removal of ATE where there is no risk
• APILs Response
• Rejects lack of funding and low fixed fees
• Concerned by impact on ATE market

22
STREAMLINING THE CLAIMS PROCESS - CONCLUSION

• Should value alone determine track allocation?
• Streamline process
• Are timescales realistic?
• How will claims departments react?
• Settling claims regardless of merit?
• Will fixed costs reflex cost of claims
  acquisition?
• Opportunities for TPAs?
• New claim forms have a go litigation?

23
STREAMLINING THE CLAIMS PROCESS - CONCLUSION

• Costs and funding
• At what level will costs be set?
• Effect on ATE market final blow?