At a loss over new PI rule

There was such a “frenzy of activity” among lawyers before the 1 April cut-off date for the new civil litigation rules that one after-the-event (ATE) insurer sold £30m of policies in March alone.

Writing in this week’s NLJ, Patrick Allen, senior partner of Hodge, Jones and Allen, says the insurer’s normal annual turnover was £1m.

Allen, who sits as a deputy district judge and is a former president of the Association of Personal Injury Lawyers, says civil litigation lawyers do not have the “faintest idea” how the new rule on proportionality will work because there is “no guidance”. He said satellite litigation was “inevitable”. “The concept that necessary and reasonable work done (required by the defendant or the court) may now be unrecoverable is still boggling. There will be retrospective effects caused by the transitional rule. For example what about success fees which are not supposed to be taken into account for proportionality under the old rule?”

Allen says the “losers” from the referral fee ban will be consumers who now have less choice, and those “smaller firms” which are no longer on panels, able to buy work from claims management companies or afford internet marketing.

Referring to the changes to the road traffic accident (RTA) portal, he warns that lawyers will have to run portal claims as “loss leaders” in future, even if there is a contribution to costs from damages.

Allen adds that he was concenerd that there would be no effective funding for conditional fee agreements outside personal injury work but says that after the event policies are starting to emerge to cover professional negligence, disrepair, actions against the police and general litigation. He predicts that it will be 12 months before personal injury lawyers will be in a position to judge whether they should “adapt and persevere or leave the market”.