General PI News
Essex County Council settled for £230,000 with a male teacher after he slipped on a Tomato Ketchup sachet and suffered severe injuries. Groups, including the Taxpayers’ Alliance, have condemned the settlement, which accounts for legal costs as well as losses to earnings and pensions, and compensation for the severity of the injuries suffered. A freedom of information request shows that the payment was just part of more than £1m paid to teachers by the council in three years.
Personal injury claims, and claims for accidents in the workplace, provide compensation to victims that suffer injuries and illnesses that are not their fault. Compensation is provided according to the extent of the injury, and a sum is also provided according to any loss of earnings and loss of other financial benefits, such as pension entitlements. The actual size of the compensation awarded, therefore, can vary considerably according to the details of the actual accident.
In the case of one teacher, Essex County Council opted to settle out of court, believing that the payment due would have been much higher when it included court and legal costs. Out of court settlement is a possibility with any such personal injury claim, although some insurance companies may demand that the case be contested.
A Freedom of Information request revealed the extent of the £230,000 payment. £90,000 was paid in damages for the extent of the injuries, while £120,000 was earmarked for legal fees and the remaining £20,000 we put aside for other costs. The request also showed that more than £1m was paid out during a three year period to teachers from the Essex district alone. A member of school staff was awarded £110,000 after slipping on a wet floor twice in the same day and suffering spinal injuries. One teacher was awarded £40,000 when a faulty metal door swung open.
Jonathan Isaby of the Taxpayers’ Alliance said that the payouts were a waste of taxpayer’s money. He went on to say that it meant that there was less money to pay teachers, and that it would result in higher tax bills for everybody else, in order to foot the bill for the compensation packages.
The Information Commissioner’s Office, the ICO, has said that personal injury firms could face penalties for using leads that have been collected unlawfully or using unlawful lead techniques. They have said that ignorance is no excuse, and that those companies that do continue to flaunt the rules could be hit with substantial penalties, even in cases where they have paid for the lads from a seemingly legitimate source, but it turns out that the lead generation firm had used practices like nuisance calls and texts.
It is common practice for law firms to use lead generation agencies to acquire their leads. This prevents the firm from having to undertake the process themselves, but it leaves them open to whatever strategies those firms use to generate the leads. There has been a clampdown against unlawful and nuisance lead generation tactics. Such tactics include unsolicited nuisance calls and spam texts. Such techniques do still continue, and many people complain that they receive multiple calls and texts in a short space of time.
Consumer group Which? conducted research that found eight in ten people receive at least one unsolicited call in any month. Worse still, the research went on to show that one in ten actually receive 50 or more calls in a one month period. The research also showed which categories of claims were most likely to generate the largest number of nuisance calls. Payment protection claims calls were made to six in ten people while personal injury calls were received by five in ten, or half of those asked. Which? has subsequently lobbied for heftier fines to be levied against those companies that are guilty of the calls and texts.
The Information Commissioner’s Office, the ICO, has said that a record number of complaints against personal injury companies were recorded during the last three months of 2013. A total of 1,645 complaints were made regarding personal injury claim companies and they have said that although they think many solicitors may be unaware they are breaching the laws, they should be prepared to perform due diligence when sourcing leads, because the fines will apply regardless of whether they knew how leads were being sourced.
The Ministry of Justice has said that it has removed the licenses of 200 rogue claims management companies in the past 12 months, and that more rigorous processes mean that the total number of personal injury companies is down from 2,553 at the end of 2011 to 1,400 in January 2014. The total of number claims management companies, including personal injury firms, is down from 3,367 to 2,254. The majority of CMCs are personal injury firms.
The Ministry of Justice has introduced a range of changes and improvements to the licensing and accreditation, as well as regulation, that claims management companies, must undergo. The industry had come under considerable scrutiny because of alleged poor practice, especially since the Payment Protection Insurance mis-selling scandal. One of the practices that is being clamped down on is the automated calling of people that are not affected by the claims.
In the past 12 months, the Ministry of Justice has removed the licenses of more than 200 rogue firms. Justice Minister Shailesh Vara said that “we are taking strong action to rein in the rogue firms operating in this sector.”
The closure of rogue firms is only a portion of the work that the MoJ is undertaking. They have also finished a consultation period on the introduction of more rigorous conduct rules for claims management firms. They are currently analysing the responses, and this is expected to lead to further amendments and additional requirements.
In November, the MoJ announced that it would be given the power to fine firms that broke their rules and that have broken their licensing agreement. Currently, the MoJ is concentrating on those firms that charge clients incorrectly, but they are expected to expand their remit to include companies that manufacture claims, or that use data requests to file spurious complaints.
Every individual should have the right to submit claims for personal injuries when they have been injured, or suffered illness, through an accident or neglect that was not their fault. However, it is important that the government and the Ministry of Justice, in particular, closely monitor the situation, and the fact that rogue companies have been shut down means that consumers are able to enjoy a better quality of service.
The Association of British Insurers (ABI) has dismissed claims by a Labour peer that the current mesothelioma scheme could lead to claimants receiving 100% of their compensation in a couple of years’ time. Currently, sufferers will only receive 75% of the total amount that they are due, but the Labour peer that headed up the recent changes to the scheme has said that once the scheme reaches its peek in 2016, the amount of compensation that victims receive will naturally start to increase. The ABI refutes the claims.
Mesothelioma is a deadly form of cancer that is contracted when a person comes into regular contact with certain types of asbestos. The lining of the organs are adversely affected, and because of the length of time it takes to identify the disease, as well as the devastating effects it has on the body, it leads to the death of the sufferer.
Mesothelioma claims have been prevalent for a number of decades. The negative effects of asbestos were first discovered as early as 1940s, but despite powerful evidence, companies continued to use the inexpensive and efficient building material for many decades. Asbestos can still be found in the walls and roofs of certain building today, and a long and complex removal process is required to dispose of it.
Because companies continued to use asbestos even after it had been found to cause cancer in workers, companies have been found guilty of taking unnecessary risks. The fatal nature of the disease means that claimants receive large sums of compensation, often totalling tens or hundreds of thousands of pounds. The disease is usually not recognised until several decades after a person has come into contact with asbestos, and a compensation scheme was established by the government for those instances where claimants could not identify or locate the company responsible.
Changes to the mesothelioma claim scheme mean that claimants currently only receive 75% of the total compensation they are awarded. Victim’s groups and legal firms have slammed the changes, but the Labour peer that headed them has defended the decision by saying that full 100% compensation will be available to claimants following a peak in 2016. The ABI has dismissed these suggestions and indicated that sufferers will not receive the full amount that they are due.
Law firms, especially those within the personal injury sector, have indicated that they are afraid of the potential negative effects that an increase in demand for fixed fee services is causing. 48% of directors have said that the increases are putting additional financial pressure on their companies, and that they are afraid of the long term effects that it will have. The number was just 29% two years ago, pointing to the massive increase in the number of people that are now demanding fixed fees.
Most legal firms have traditionally operated by offering hourly rates, whereby the firm receives recompense for the total amount of work that they have to put in. However, the introduction of new firms and new services that offer fixed fees has increase, and this has put increased pressure on the rest of the legal companies to follow suit.
Consumers are becoming better educated, and they recognise the stability that is offered by fixed fees. They are also aware of the number of online companies, and newer companies, that offer fixed fee services for virtually all types of legal work. While the practice may have initially been reserved for personal injury firms, it is being adopted for services including family law cases and other types of legal service.
Individuals are not only aware of the existence of fixed fee services, but the pulling of legal aid for many types of case, means that clients have to pay closer attention to the amount that they are paying. Fixed fees do ensure that legal clients know exactly how much they will have to pay, but it has put financial pressure on legal services that are already feeling the strain of government cuts.
A survey by Thomson-Reuters shows that 48% of finance directors are concerned that the increase in the number of fixed fee requests will impact their profits. Just two years ago, a similar survey revealed that 29% had similar fears. Approximately three quarters of respondents said that they saw lower fees as a risk to their business and 48% thought that increased price competition would have a detrimental effect.
Accident management services firm Helphire has announced that they are set to purchase New Law, a group of personal injury services firms, for a total of £43m. The fee will be made up of an initial £24.5m in cash, additional milestone payments of £10.5m, and the transfer of debt and shareholder loans to the tune of £8.2m. The deal takes advantage of new Alternative Business Structure rules that enable non-legal firms and partners to buy and manage legal firms.
Helphire is an accident management services firm. They work in conjunction with motor insurers to provide not at fault motorists with a vehicle while they wait for the return of their own car. They employ more than 1,200 people and have a fleet of more than 6,000 vehicles. The company released new shares in December of last year, and raised a total of £60m. It is believed that this money is being used to fund the purchase of New Law.
New Law is a legal firm that deals with a wide variety of legal cases, including extensive personal injury services. The firm was established in 2004 and has quickly grown to become a well-known and highly-respected legal firm within the sector. The purchase has only been made possible because of the recent introduction of the Alternative Business Structure, or ABS.
Previously, it would not have been possible for a non-legal firm like Helphire to purchase a firm of solicitors. However, new rules introduced by the government in 2007 but the Act did not come into force until October 2011. It enables non-legal firms to own and manage a share of legal companies, and it means that Helphire are now able to purchase New Law, a company with whom they have dealt with extensive in the past few years.
Helphire is valued at just under £200m, and this represents a major acquisition for the group. It will enable the accident services firm to be able to provide legal services to its clients as well, showing one of the ways that an ABS can expand and broaden the range of services that both parties offer.
Following the reasonable success of a new code of conduct introduced by the Association of British Insurers (ABI) concerning personal injury compensation claims following road traffic accidents, the British Insurance Brokers’ Association (BIBA) has signalled that it is looking to introduce a similar code. BIBA executive director Graeme Trudgill has said that he wants something put in place within the first six months, but that the wording would have to be completely different to that of the BIA code because of the different services that the two groups offer.
The British Insurance Brokers’ Association is the trade group that represents the interests of brokers, intermediaries, and their customers. Brokers are responsible for the selling of 51% of all general insurance and 81% of commercial insurance policies to customers. Although brokers and insurers are closely linked, the two groups offer different services as well as having different representative groups.
Earlier this month, the Association of British Insurers released its own Customers with Road Traffic Injuries: the ABI Code. It is a voluntary new set of codes, and it was ABI themselves that decided to introduce such regulations. Major insurers including AXA, Allianz, and Admiral signed up for the new code and the ABI is confident that it will prove a success because the code was devised by and drawn up by the Association itself.
Insurance companies have come under some scrutiny recently, especially in the wake of national floods and other disasters. Because brokers are usually the organisations and groups that dealt with the initial enquiry and helped clients to arrange their own policies, it means that they are also often treated as the first port of call by a lot of customers. However, because they do offer different services, it means that they are not included within the new ABI code.
BIBA has not confirmed a precise timeline for introducing a new code of conduct, but they have said that it will be similar in its aims to the BIA code, and they are hopeful that it will come into force within the first six months of this year. It, too, will be a voluntary code.
The leader of a crash for cash insurance scam ring has been jailed for four and a half years. Mohammed Omar Gulzar was responsible for a series of deliberate crashes, caused with the intention of faking personal injury claims, including one that involved a 12 tonne bus carrying 40 passengers. Three other men were jailed and five received suspended sentences after pleading guilty to the charges. The group are believed to have deliberately caused 30 crashes, and although only £40,000 was paid out, the total could have been as high as £500,000 if all claims had been successful.
Crash for cash schemes have been well documented in the media recently. In these schemes, perpetrators deliberately cause crashes that are deemed to be the fault of the other driver. The criminals then make claims against their car insurance policies and submit personal injury claims, often for phantom passengers that were not in the car, and for damage that was already done to the vehicle.
There are a number of methods that crash for cash criminals use in order to orchestrate crashes. Flash for cash accidents are perhaps the simplest, with a driver flashing somebody out at a junction before driving into them and claiming that the accident was the other driver’s fault.
Mohammed Omar Gulzar’s group were investigated following what seemed like a minor crash with a service bus in Yorkshire. Passengers on the bus were surprised at the reaction of the car passengers, some claiming that one man even threw himself against the windscreen. Police investigated, and the group appeared in court. Gulzar was found guilty and sentenced to serve four and a half years in prison, while a further eight men were also convicted of similar crimes; three were given prison sentences and five were provided suspended sentences.
Car accidents can be serious and can have serious consequences for those involved. Compensation exists so that anybody that is injured or suffers as a result of such a crash can receive the medical attention they require and be compensation for any loss of earnings that they may face following time off work.
Hearing loss is a problem that is commonly associated with industrial employment. The loud and constant noise of machinery, over a prolonged period of time, can cause permanent to the ears and therefore to hearing. However, it has emerged, following a freedom of information request, that Ulster police have paid out a total of £135m in compensation to former officers that claim to have suffered hearing impairment as a result of some part of their job.
Ulster Police is the only force that is routinely armed, and this means regular firearms training for all of their officers. During such training, officers should have adequate ear protection because of the potential damage that the noise can cause. The Armed Forces, and other groups that use firing ranges in their training, receive similar protection, but according to figures acquired by Relatives for Justice, officers do not necessarily enjoy the same level of protection.
It has been well documented, since before 1970, that firing range practice and close proximity to gunfire can lead to serious damage to hearing. Despite this, the Royal Ulster Police did not provide ear protection until the 1990s. Even now, many officers are forced to do without or to suffer having to use inadequate protection especially when waiting for their turn on the range.
Accidents and injuries at work are treated seriously, and as soon as something is recognised as potentially causing damage to workers, a legal precedent is set. In the case of the use of firearms, and their effect on hearing, it was determined in the late 1960s that this could cause damage. This date is known as the date of knowledge, and in most cases, injuries sustained following this date due to a lack of ear protection will lead to successful compensation claims.
According to the figures received, 8,641 former employees have received compensation for loss of hearing and while many were given because of the use of firearms, some officers claimed that they had suffered their hearing loss from the constant use of radios. Approximately £65m of the £135m was from legal costs, and critics have slammed the force’s decision to contest every claim, even those where medical evidence was provided as having inflated the figure.
Critics have rounded on the government, following a change in stance which means that mesothelioma sufferers will only receive a portion of the compensation payment that they are due. The changes mean that mesothelioma sufferers will not be able to reclaim the success fee or after the event premiums and the changes have come after a review last July. The review itself followed a new bill in April that saw exemptions for those people that have contracted mesothelioma from the workplace.
Mesothelioma is a very rare form of cancer that is contracted after coming into contact with harmful asbestos fibres. The minute fibres typically affect the pleura, which is the lining of the lungs and chest wall, and there is no cure for the disease. Once a person is diagnosed with mesothelioma, they typically only have a short amount of time left.
Large compensation payments have been made by companies that put their employees at undue risk of asbestos exposure. Asbestos was a cheap and convenient building material used during the 20th century but even following evidence that it was dangerous when people were exposed to it, many companies continued to rely on its use. Millions of people were exposed to the killer fibres, and even the families of those that worked with it were put in danger.
In April 2013, the government introduced a new bill that meant claimants were unable to reclaim success fees following personal injury cases. However, the government decided, at the time, that mesothelioma cases would be exempt from the new bill. In July 2013, just three months later, they started to backtrack on this decision and said that they were consulting on whether the exemption should be lifted. A final consultation has now concluded, and those that have contracted one of the most deadly forms of cancer will be left out of pocket.
Lawyers and the law society in general have rounded on the government for their U-turn, saying that a person who contracts a deadly disease while at work should be entitled to full compensation and to ensure that their families are properly protected and cared for once they have gone.