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CMCs and McKenzie Friends not the answer to PI reform

Lord Chancellor invited to meet claimants who would be stifled by MoJ reforms

12 December 2016

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A suggestion in a government consultation paper that claims management companies and paid McKenzie Friends could represent victims of personal injury instead of claimant solicitors has been rubbished by a former president of the Association of Personal Injury Lawyers.

Patrick Allen, pictured, the senior partner of Hodge Jones & Allen, has written to the secretary of state for justice, Liz Truss, to outline his alarm at plans to raise the small claims limit from £1,000 to £5,000, and also to invite her to meet the injured people he says will suffer as a result of the Ministry of Justice's reforms.

In his letter to the Lord Chancellor, Allen, who acted for the victims of the Marchioness ferry disaster and the King’s Cross fire, criticised the MoJ’s suggestion that CMCs and McKenzie Friends could assist claimants. ‘These people are untrained, uninsured, and unaccountable,’ bristled the PI specialist. ‘They could scarcely be less suitable for the role.’

Allen was also critical of the ministry’s admission that it does not expect insurers to pass on all ‘savings’ – approximately £1bn worth – to their policyholders. Instead, the lawyer argued that insurers will ‘enjoy a £200m windfall’ and added that since lower insurance premiums were the justification for these reforms, the government’s inability to guarantee lower insurance costs should ‘ring alarm bells’.

In 1991 Allen played an integral role in persuading the then Lord Chancellor, Lord Mackay of Clashfern, not to make a similar move. In his letter to Truss, the lawyer said his arguments to Mackay ‘still hold good’.

‘It should never be forgotten that we are talking about ordinary people who have been injured and suffered loss due to the negligence of another,’ Allen told Truss. ‘The law has not changed to make it easier to claim; rather people now have a greater awareness that the law allows them to make good the loss they have suffered. This is a fundamental principle of our legal system.’

Allen went on to argue that PI law ‘remains sound’ and, as the government was making no proposal to change it, ‘there is no rational argument to make it harder for people to exercise their rights under it’. He continued: ‘The sums may seem small but to individuals they can be very significant – it could be a loss that tips them over the edge from “just about managing” to “not managing”.’

Warning that equality of arms would become ‘a distant memory’ under the reforms, Allen said that, with small claims court costs unrecoverable, many claimants will not be able to face bringing ‘perfectly valid claims themselves, while those that do will be faced with experienced legal representation on the other side’.

‘A case may be low value but that does not make it simple,’ he added in his letter. ‘How many of your constituents would be able to navigate health and safety regulations, for example, to determine liability? Or find witnesses of fact and bring them to court? Or brief medical or expert witnesses and get them to court too? Or pay for medical and other reports? Or value damages and calculate interest?’

With the PI market having undergone a host of reforms in recent years, Allen told the Lord Chancellor that time was needed to assess the impact of the Jackson reforms, and despite arguments to the contrary by the insurance industry, he called on the MoJ to take notice of the figures from the Department for Work and Pensions which showed whiplash claims were falling.

Arguing that neither negligent motorists nor their insurers were ‘victims’ – as ‘their rising salaries, bonuses, and share prices show’ – Allen said: ‘The victims are those who have been injured through the negligence of others, and I would urge you to put them first and decide not to take these reforms forward.’

Allen invited the Lord Chancellor to meet HJA clients who have brought the kind of claims that will be stifled under the MoJ’s proposed reforms. ‘I invite you to visit our offices in Euston to discuss these issues with those of us on the front line and meet first-hand clients who are bringing claims of the type under review, to understand their stories and what their cases mean to them.’

The full letter, which was sent last week, has yet to receive a response from the MoJ.

John van der Luit-Drummond is deputy editor of Solicitors Journal

john.vanderluit@solicitorsjournal.co.uk | @JvdLD

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