Rules against settlement before medical report

Civil Liability Bill [Lords] – in a Public Bill Committee am 11:00 am ar 11 Medi 2018.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Gloria De Piero Gloria De Piero Shadow Minister (Justice) 11:00, 11 Medi 2018

I beg to move amendment 19, in clause 6, page 5, line 37, after “injuries” insert—

“provided by an accredited medical expert selected via the MedCo Portal”.

This amendment, together with Amendments 20 and 21, would ensure that any medical evidence of a whiplash injury must in all cases be provided by a person registered on the MedCo portal website.

Photo of Graham Stringer Graham Stringer Llafur, Blackley and Broughton

With this it will be convenient to discuss the following:

Amendment 20, in clause 6, page 6, line 1, leave out subsection (3)

See explanatory statement for Amendment 19.

Amendment 21, in clause 6, page 6, line 22, at end insert—

‘(7) In this section, the “MedCo Portal” means the website operated by Medco Registration Solutions (company number 09295557) which provides a system for the accreditation of medical experts.’

See explanatory statement for Amendment 19.

New clause 3—“Recoverability of costs in respect of advice on medical report, etc.—

‘(1) For the purposes of civil procedure rules, the costs recoverable by a claimant who recovers damages in a claim for a relevant injury which is (or would be if proceedings were issued) allocated to the small claims track include the costs of the items set out in subsection (2).

(2) The items are—

(a) legal advice and assistance (including in respect of an act referred to in paragraph (a) or (d) of section 6(2)) in relation to the quantum of damages in the light of a medical report or other appropriate evidence of injury; and

(b) in a case where liability for the injury is not admitted within the time allowed by any relevant protocol, legal advice and representation in relation to establishing liability.

(3) For the purpose of ascertaining the amounts recoverable in respect of those items, the claim is to be treated as if it were allocated to the fast track.

(4) In this section “relevant injury” means an injury which is an injury of soft tissue in the neck, back, or shoulder, and which is caused as described in paragraphs (b) and (c) of section 1(4) (negligence while using a motor vehicle on a road, etc.), but does not include an injury in respect of which a tariff amount is for the time being prescribed under section 2.’

This new clause would ensure that a successful claimant is able to recover costs incurred for legal costs in respect of advice sought in relation to determining the quantum of damages following a medical report or the establishment of liability where it is in dispute.

Photo of Gloria De Piero Gloria De Piero Shadow Minister (Justice)

The amendments would ensure that any medical evidence of a whiplash injury must in all cases be provided by a person registered on the MedCo portal website. The Government say in clause 6 that cases should never be settled until the claimant has been medically examined. We fully agree, but amendments 19 to 21 would go even further. The Government say that the Lord Chancellor can decide what constitutes appropriate evidence, but it is very simple. The only form of appropriate evidence must come from a proper doctor registered as such on the portal website of MedCo, the umbrella organisation through which doctors in all personal injury cases are currently chosen. Why on earth would the Government not go through the currently accepted route for all other personal injury cases and the same process that insurers accept in every other case? The only people to gain from offers without a medical are defendant insurers who get cases off their books at an undervalue.

Lawyers for the claimant are obliged to put any offer to the client. Reputable lawyers will always advise against acceptance until there is a medical, but some clients are desperate and reject their advice. Unsurprisingly, and heartbreakingly, it tends to happen when a client’s sick pay runs out or perhaps near Christmas when people have been off sick and are desperate. Any downgrading of the requirement for a medical certificate by a medical registered doctor—this is the risk without the amendments —is just another way that vulnerable workers who have to take time off because of their injuries could be harmed by insurers who make record profits.

We suspect that the vagueness about what qualifies as proper medical advice might be an attempt to allow the use of physiotherapists for the evidence. Insurers have long pushed for that. Physiotherapists are great people doing wonderful work in an extremely important part of post-accident rehabilitation, but they are not doctors and are not able to assess and provide a long-term prognosis.

We fear that if we do not specify in the Bill who should provide the medical reports we will have injured people being prescribed a couple of sessions of physiotherapy and then being described by the insurers as malingering when they are not back to full health following the limited treatment, when in reality their condition might require far more intense rehabilitation efforts over a longer period. In some cases, the insurers might see a financial gain to employing a physiotherapist or owning a rehabilitation company. Without the amendments, that would suggest the insurers control not only the payment of damages, but the medical process leading to the award. Let us avoid that conflict. Let us trust doctors and specify where a medical report should come from. Any deviation from the gold standard of a medical doctor would negate the good that is done by effectively banning the settlement of whiplash claims without medical evidence, as this part of the Bill attempts to do.

On new clause 3, the Government say that the cases they intend to sweep into the small claims track are minor, straightforward and simple. We do not think that that is so, or that the injured claimant left on their own to fight insurance companies—let us be in no doubt that insurers will fight—will think that their cases are either small or simple. The new clause would ensure that, at the very least, when the injured person gets a medical report, as the Government in clause 6 rightly say they should, they can get independent legal advice on what the report means in terms of the value of their claim, so that, if they remain fighting on their own, they settle at an appropriate sum. How else would they know what their case is worth?

The Government might say that insurers will not rip people off and that they always pay what is fair. If that is the case, they have nothing to fear in ensuring that the injured get advice paid for that reassures them that that is the case. There is a societal benefit. If people settle at an undervalue or their conditions are not properly recognised, they will fall back on the state—the NHS or the benefits system—and the taxpayer will foot the bill that should properly have been met by the negligent party. The polluter will end up not paying and we will all pay through our taxes.

The same principle applies to cases where the insurers do not admit liability. The Government think that, when a claimant chooses to fight a case, the injured person will have the confidence to fight on. Facing a denial of liability, the claimant will, the Government think, be equipped to fight on, but, without help, we do not think they will be.

We therefore propose—this effectively happens now in a fast track case, where the defendant fights on liability and the case falls out of the fast track—that the claimant should get help to fight on. The costs will be fixed, as they are now in the fast track, but at least the claimant will have someone to hold their hand who is on their side. Perhaps the Government think that injured people, possibly claiming sums that exceed their monthly pay cheque, should be left on their own, assess quantum on their own and fight well-funded insurers on their own.

Photo of Rory Stewart Rory Stewart The Minister of State, Ministry of Justice 11:15, 11 Medi 2018

I very strongly support the basic principles and philosophy of amendments 19 to 21. I have huge respect for MedCo—right hon. and hon. Members will be aware that it is a non-profit portal designed to select at random an expert witness in order to testify in whiplash injury claims. I can reassure them that the intention is for MedCo to be the appropriate channel through which advice is sought.

The only reason we have not put MedCo on the face of the Bill is to provide for the eventuality that, in 20 or 30 years’ time, an entity other than Medico might exist— as hon. Members will see in clause 6(4), we are specifying the form of evidence, the person, the accreditation and the regulations. That was on the advice of counsel, which has had strong experience over the last century, that defining a non-profit on the face of the Bill could cause massive challenges if something unforeseen happens to it. We absolutely agree that MedCo is the appropriate body to use at the moment. All the arguments made by the Opposition are accepted, but on counsel advice, we respectfully advise that it would be better to allow flexibility rather than defining MedCo on the face of the Bill, and therefore ask them to withdraw those amendments.

New clause 3 argues for an individual to be able to reclaim their legal costs while pursuing their whiplash claim. This is a fundamental point of debate and disagreement, and goes against the fundamental principle of the small claims court, the idea of which is that an individual should be a litigant in person and not in a position to recover their legal costs. The argument made is that, under the level proposed—which in the case of certain kinds of damages is £10,000, in relation to whiplash would be £5,000 and in relation to personal injury could be as much as £2,000—we believe that the nature of the claims, particularly with a medical report in place, should be relatively straightforward. We have made some concessions about the online portal and the roll-out, all of which, we think, makes it inappropriate to ask for the reclaim of legal costs.

Photo of Ellie Reeves Ellie Reeves Llafur, Lewisham West and Penge

Are we not going to be in exactly the same situation we were with employment tribunal fees? For people pursuing claims, fees, whether they are court fees, legal fees or medical costs, will put people off pursuing claims and therefore undermine their access to justice. The Government were called out on this by the Supreme Court regarding employment tribunal fees and we seem to be going back down the same route.

Photo of Rory Stewart Rory Stewart The Minister of State, Ministry of Justice

This will be entirely different. The disagreement is only about whether one can employ a lawyer and recover the cost of the lawyer. The individual will be able to recover from the insurer the medical costs on the report they got—for example if they spent £140 going through the MedCo portal. The small claims court cost of registering the claim would also be recoverable. However, in the vast majority of cases at the moment—we consider that this will be true in the future—cases do not go to court at all. In the vast majority of cases, a claimant will get a medical certificate, follow the path of the online portal and the settlement will come without them having to proceed to court.

Photo of Jo Stevens Jo Stevens Llafur, Canol Caerdydd

The Minister’s impact assessment, which I referred to on Second Reading, explicitly states that the measure will affect the number of people who will bring cases, and that the number of cases will go down. Will he comment on that please?

Photo of Rory Stewart Rory Stewart The Minister of State, Ministry of Justice

Absolutely. The Government’s contention is that some of the cases currently being brought forward are fraudulent or exaggerated claims motivated by a desire to get a payout when either an injury has not been experienced or the injury experienced was considerably less than claimed in court. We believe that, by reducing the level of tariffs that paid out and by removing the industry of lawyers whose costs can currently be reclaimed through the process, it will be less likely that an individual who has not suffered an injury will go through the inconvenience of seeking a medical report, and less likely that they will proceed to the small claims court or go through the online portal to receive payment for an injury that did not occur. They would not be supported and encouraged by the legal profession or, more likely, claims management companies in proceeding down that path.

Photo of Jo Stevens Jo Stevens Llafur, Canol Caerdydd

Will the Minister clarify? Is he saying that, although his impact assessment states that the number of cases will go down, the measure will apply only to fraudulent cases? Is he saying that no genuine victim of injury will not pursue a claim because they are not able to recover their costs?

Photo of Rory Stewart Rory Stewart The Minister of State, Ministry of Justice

The impact assessment, which is based on an enormous amount of expert evidence and discussion, boils down to a pretty straightforward assumption about human behaviour. Under the proposed new system, if someone has a car crash and injures themselves, they will proceed to their insurance company, register the fact that they have genuinely injured themselves, be directed towards MedCo, which would provide a report, go to the online portal and, in an effective, efficient and transparent fashion, proceed towards a predictable tariff based on their medical reports. If the medical reports say that the prognosis is six months, a fixed tariff would be paid out.

The experts’ contention is that, if someone has a car crash and genuinely nothing happens to them, it would be unlikely, in the absence of a claims management company encouraging them to do so, that they will tell the insurance company that they have a whiplash injury, or be coached to mislead a doctor in the MedCo process to get some kind of report suggesting they have a whiplash injury. Therefore, somebody who either did not experience an injury or experienced an injury so minor that they were not interested in pursuing compensation would not proceed. We believe that, under the current system, the practice of some claims management companies is to encourage people who either have not experienced an injury or have experienced a considerably more minor injury to make a fraudulent or exaggerated claim. We believe that those claims will be not entirely excluded but reduced.

Photo of Bambos Charalambous Bambos Charalambous Llafur, Enfield, Southgate

Does the Minister accept that there has to be a hearing to settle children’s claims, and that infant settlements require representation? Children often sue their parents if there has been a road traffic accident that is no fault of their own. Will he consider exempting them from the scope of the Bill? They require solicitors, because there has to be a hearing for there to be a settlement.

Photo of Rory Stewart Rory Stewart The Minister of State, Ministry of Justice

Perhaps we can return to that very interesting point on Report. It has not been raised in any of the amendments tabled so far, but I would be very interested to see an amendment tabled and to discuss the matter outside this Committee.

On the basis of the arguments I have made about MedCo, I respectfully request that the Opposition withdraw amendments 19, 20 and 21.

Photo of Gloria De Piero Gloria De Piero Shadow Minister (Justice)

Will the Minister say a bit more about the advice he has received from counsel and about why he will not accept the amendments?

Photo of Rory Stewart Rory Stewart The Minister of State, Ministry of Justice

It is pretty straightforward. MedCo is a non-profit organisation set up relatively recently as a portal funded by the insurance industry. We intend the Bill, like any law we pass, to have sustainability and resilience. Potentially, it will last 50 or 100 years. It is very difficult, looking forward over that period, to be confident that the exact portal or organisation by which doctors qualify to provide an assessment of whiplash will be called MedCo—it may be called something else. The measure provides the flexibility, through regulations from the Lord Chancellor, to define the form of evidence, the person, the accreditation and the regulation necessary to proceed. We think it would give a hostage to fortune to put the brand name of a specific non-profit on the face of the Bill. On that basis, I request that amendments 19, 20 and 21, and new clause 3, be withdrawn.

The Chair adjourned the Committee without Question put (Standing Order No. 88).

Adjourned till this day at Two o’clock.