‘No win, no fee’ change could be big deal for travel

Agents and operators could face fewer personal injury claims as a result of legal reform proposed last week.

The changes to the “no win, no fee” systemproposed by appeal court judge Lord Justice Jackson could “change the landscape” of claims against travel companies, some lawyers believe.

Under the existing system, which has been criticised for encouraging speculative claims, losing claimants do not have to pay legal costs.

The reforms propose claimants should foot the legal bill themselves if they lose. The potential costs of claiming are also set to increase under plans to scrap insurance covering lost cases.

Defendants would largely have to pay their own legal costs, whether they win or lose, and will have to pay the claimant’s legal costs should the claimant win.

Abdulanesh Alaraqu director of Brit Claims said the reforms would discourage speculative cases.

“At the moment, there is an ethos of ‘we might as well have a go’, but if the costs to pay should people lose increase, they may not be so willing to take action,” he said.

“It means lawyers will only want to take on strong cases. This will change the legal landscape of claims against travel companies.”

Claimants who win will be eligible for compensation payments that are 10% higher than now.

However, travel firms could still pay less if they lose, because a cap would be introduced on what a claimant’s lawyer can claim as a success fee.

The reforms are due to start in 2012.

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Reinsurance market performs as intended

Aon Benfield has released its latest Reinsurance Market Outlook report, which provides an overview of the trends witnessed at the 1st April reinsurance renewals.

The intermediary reveals that despite “a string of meaningful insurance events” and associated adjustments in pricing, the decline in US and European property catastrophe rates continues.

Few European programmes renew at 1st April but with regard to the US, the season saw property catastrophe rates for programmes including hurricane risks decrease by 5% to 10%.

Furthermore, the broker is predicting that the June and July renewals period will find price changes of flat to down 5%, for US hurricane-driven programmes.

The Japanese earthquake on 11th March did affect the renewals process, as many insurers opted to extend current programmes while losses were being assessed.

Where Japanese renewals took place, the costs of typhoon programmes increased by 5% to 10%, while most earthquake programmes increased within a range of 25% to 50%.

Aon Benfield Analytics chairman, Bryon Ehrhart, sums up: “The reinsurance market remains functional with its existing capital base, and we do not anticipate the need for material new capital flows into the reinsurance market to satisfy insurer demand for catastrophe reinsurance based upon the global events to date.”

He adds: “Throughout the recent, significant global events, reinsurance responded to the needs of global and regional insurers as intended, with material volatility shifted to reinsurers from the balance sheets and income statements of global and regional insurers.”

Also of note, reinsurance programmes covering New Zealand, where a second major earthquake struck Christchurch in February, do not renew at 1st April.

Last month, Aon Benfield formed a Market Analysis team within Aon Benfield Analytics in a move aimed at allowing Aon Benfield Research to focus entirely on academic and industry collaboration.

Lord Chancellor faces legal action over discount rate review

The Association of Personal Injury Lawyers (APIL) says it is taking legal action because the Lord Chancellor has failed to review the discount rate, despite announcing in November of last year that a review was taking place.

The discount rate is used to calculate the amount deducted from an injured person’s compensation to account for any income he or she may receive from investing their damages.

In 2001, the rate was set at 2.5%, based on yields generated by index-linked government stock (ILGS).

Since then, yields on ILGS have gradually declined and according to APIL, over the last three years the average gross yield has been less than 1%.

APIL has now issued proceedings for a judicial review, stating that the Lord Chancellor has failed to complete a review or provide a timetable for it.

The Association’s president, Muiris Lyons, says: “We are gravely disappointed that the Government has failed to carry out its review as injured people are continuing to be undercompensated, in some cases, by hundreds of thousands of pounds.”

He adds: “It has been nine months since we first brought this issue to the attention of the Lord Chancellor and we find it unacceptable that no meaningful progress has been made since then.”

Reaction to Jackson reforms (claims management reform)

Following the close of the consultation on February 14th, the Brit Claims was totally bewildered at Tuesday’s announcement bearing in mind the Ministry of Justice had received in excess of 600 responses to the Green Paper, plus statistical evidence. It seems most unlikely that each one of those responses could have been given the appropriate consideration they deserved, which, coupled with the Ministry’s lack of hard evidence from an impact study, could only lead the Brit Claims to deduce that the full implementation of the Jackson report was somewhat pre-determined.

The unintended consequences of this are all going to impact the deserving claimant and affect their access to justice. By extending the RTA portal into employer’s liability, public liability and low value clinical negligence claims, together with the raising of the fast track claims limits, means that 95% of claims will now be dealt with in this manner. How can the Ministry justify these wholesale changes to the system for 5% of the remaining claims? It is totally disproportionate.

Claims management companies and lawyers are being blamed for the rising cost of insurance premiums but as the Transport Committee identified it is the insurers who are the largest generators of referral fees (without the consent of their policy holders) and in reality if they hadn’t priced their premiums incorrectly over the last 5 years on the aggregator sites, trying to gain market share, then they wouldn’t have been left looking for someone else to blame.

There are too many unanswered questions and far more work needs to be done prior to any sort of implementation.

The show isn’t over UNTIL the Bill is signed by the Queen: so there is still EVERYTHING to play for in persuading MPs that Lord Jackson is wrong, Lord Young is wrong and the Government is wrong, and that they should think again how this legislation will affect Access to Justice for the ordinary man and woman.

WILL YOU STAND AND FIGHT FOR YOUR INDUSTRY?

The battle is now well and truly on.

I am sure you will by now know the outcome of the Government’s so called consultation on implementing Jackson.

Earlier this week, we circulated a short briefing on the main headlines and also a briefing on the next wave of consultation for “reform”.

The Government intends to abolish recoverability of success fees and ATE premiums.

This is bad news for personal injury claimants and those who represent them. The only winners are the insurance lobby.

It is obvious to all we are up against a foe who has no regard for access to justice, and will not allow the facts to get in the way of ideologically driven change for the benefit of the insurers.

This is your chance to understand how Jackson will affect you.

The show isn’t over until the Bill is signed by the Queen: so there is still everything to play for!

MPs, and leading industry figures will give you their insight into implementing Jackson; hear about the future of the sector from experts on Alternative Business Structures and the RTAPortal. Hear from the Access To Justice Action Group about the continued fight to change the legislation

Claim Management, are the MOJ regulations toothless? At street level it appears to us that there are many people / companies providing claims management facilities who are not and have no intention of being regulated.

Personal injury claim management.

Every single time someone tries to influence change in anything in life you have three types of reaction. 

Those who oppose change blindly, usually without any real understanding of what the change represents because it is a knee jerk reaction to an anticipated pain in the pocket. Their normal words are announcement has been done but cannot be implemented.

Those who will say that it doesn't go far enough but they fail to comprehend that progress isn't made in leaps and bounds but in tiny steps. Their every steps is perceived in negative thought, juts make their heart believe all is well. 

Seldom do any of these first two types ever have ideas of their own or even consider for a second being constructive because it is much less effort to heckle than to try and solve a problem. 

The third type is the silent majority (and I still have trust that they are a majority) will accept the change for what it is, simply a step forward on the evolutionary chain so that things can get from how they were... to how they should be. This category is mainly academically educated. 

I don't believe that the regulations are toothless, they are simply a first step. There are problems - yes, but there are also people working very hard to iron out those problems. At times people are being imposters and disguising solicitors with use of authorised companies details, in the name of sister company or we are simply working under the umbrella.

Unfortunately ever since Brit Claims has been regulated (not much long ago) it has been victim of such fraud. However at present matters are under investigation, but this cowboy style mechanics and cab runners wants to advice legal matters to clients, despite having very very limited knowledge about it, in the hope of getting easy and quick money through injury claim. This very attitude undermines those who wants to really help clients, and give legal and fair advice. http://www.britclaims.co.uk