Thompsons Solicitors, the UK's largest trade union and personal injury firm, has written an open letter to Nick Brown MP on the Initial Regulatory Impact Assessment Employers Liability Insurance Review.
Dear Mr Brown
Initial Regulatory Impact Assessment Employers Liability Insurance Review
Thompsons are grateful for the opportunity afforded to us to take part in your initial review. We would welcome the opportunity to be involved in this process as you move into the second stage.
Our response to the initial consultation was a joint one with StPaul Insurance proving (perhaps to the surprise of some) that claimant lawyers and insurance companies can work effectively together where our common aim is the proper compensation of those who have been injured rather than "scoring points" off each other and thereby simply adding to costs.
In quoting data from the insurance industry which "suggests that on average 40 % of claims expenditure goes on legal fees" the review fails (understandably at this stage) to analyse why. Fees paid to claimant lawyers in successful cases can be increased as a result of insurance company obstinance and delay.
Our estimate is that at least 20% of our fee income is the result of insurance company behaviour rather than 'properly' incurred through the efficient and necessary conduct of litigation. We would welcome the opportunity to produce evidence of the needless time we spend chasing insurance companies, applying for court orders against their solicitors and fighting liability in cases where liability is clearly not an issue.
In paragraph 13 the possibility of Alternative Dispute Resolution "particularly for small claims" is raised. You will I am sure appreciate that a person's perception of what is a small claim depends on their own financial circumstances. In the experience of Thompsons £1,000 or £2,000 compensation is not a small sum for the worker on a £15K or £20K annual salary.
We welcome the commitment that ADR should not be forced on individuals, that claimants should retain the right to sue. We can think of cases where ADR would be appropriate but it requires the commitment of both sides in litigation to avoid ADR becoming a "stick to beat the claimant with". The universal conclusion from the experience of protocols is that insurance companies do not comply. ADR must not be allowed to become something that is used by the insurance industry to the detriment of the claimant.
The suggestion in paragraph 15 that improvement in Health & Safety Practice should be an "explicit objective" of the compensation system is very welcome. We have long argued that those with good health and safety records should not have to pay for those with poor ones. We could from our files very easily identify those who are recidivists in terms of health and safety breaches. The insurance industry know who they are too.
Rehabilitation is a concept that we have long supported where it is used appropriately. There will be cases where rehabilitation is inappropriate or unsuitable and where that occurs it must not be the case that individuals are penalised for failing to take up the option of rehabilitation or if it fails they are penalised in terms of compensation.
Thank you for your considered and responsible review. We look forward to working with you and the insurance industry to make the compensation system work better for claimants rather than becoming a vehicle for protecting or increasing lawyers fees or insurance company profits.
Tom Jones for Thompsons Solicitors
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