rblog

Life of P.I

By Debra Malpass on 27 October 2016

We have all seen the adverts on TV offering legal help to us following a trip, slip or fall at work that wasn't our fault. Whatever we think of this approach to advertising personal injury (PI) services, it has been very successful in growing the market and providing people—many of them vulnerable—with access to justice. 

However, some people have concerns over a compensation culture and the perceived rise in fraudulent or frivolous claims. As part of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO), legislative changes, including a ban on referral fees, were introduced as a response to such concerns. 

We have now published research that seeks to understand how the PI market has changed since these reforms were put in place and to identify the good and poor practice of solicitors. 

So what have we learnt? 

Competition and competence: the two sides of diversification? 

Diversifying your activities to take advantage of new opportunities and emerging markets is critical in securing the long-term success of your business. But it takes planning and often requires recruitment of experts and the development of new skills and knowledge. 

PI solicitors, particularly those concerned by changes to road traffic accident (RTA) claims, have diversified into new areas, including clinical negligence, occupational disease and noise-induced hearing loss (NIHL). In doing so, our research has identified concerns about solicitors lacking the legal and practical knowledge to take on and progress cases. 

This lack of legal knowledge and practical experience has also been seen by judges, a number of whom have been critical of the standard of court preparation and quality of materials produced over the last 10 years. 

The drive to make money and to sustain levels of profit has also prompted a minority of firms to use less-experienced staff to review and prioritise cases for progression. This can result in frivolous cases slipping through the net and consumers with genuine claims not receiving support. 

Pre-medical offers and the appropriate 'valuing' of injuries 

Everyone should benefit from a swift resolution to their case and pre-medical offers of settlement provide an opportunity for both parties to avoid costly court cases. However, our survey with defendant and complainant solicitors has identified examples of solicitors making pre-medical offers of settlement when the claimant is not able to 'value' the injuries, which can lead to a risk of inappropriate compensation. 

What actions are the SRA taking? 

In light of the issues highlighted in this research and through other sources, we issued a warning notice on 21 March 2016 targeted at solicitors and regulated persons who take personal injury referrals from third parties, work closely with them or act on their instructions. 

We are also conducting a thematic review of personal injury legal services. This work will determine the nature, extent and impact of the issues of regulatory concern that have been identified.

Debra Malpass