APIL ANNUAL CONFERENCE 2012
Inaugural speech by incoming president, Karl Tonks
(check against delivery)
Two months ago the Prime Minister gave a speech on personal and business responsibility. He
talked about “people recognising that they have obligations beyond just paying their taxes and
obeying the law. Not just doing no harm but doing good, and this applies to businesses as much
as it does to individuals. Personal and business responsibility go hand in hand”, he said.
As we know, our day to day work as personal injury lawyers is all about dealing with responsibility,
or the lack of it: the irresponsibly careless driver, or the irresponsibility of the negligent employer,
for example. Our legal system should give meaning to the concept of responsibility by delivering
fair compensation to those who need it, who deserve it and who are entitled to it.
Today, I want to talk about the responsibility of all those involved in that legal system, across the
United Kingdom, and whether they are truly meeting their responsibilities.
Let me start with the insurance industry.
The insurance industry likes to say that the system for personal injury claims is dysfunctional. In
fact I think dysfunctional is one of the industry‟s favourite words – and it‟s right. We have a
system where insurers can contest claims until the eve of an expensive trial, cause significant
costs to be incurred unnecessarily, and make an innocently injured person wait unreasonably long
for the compensation he may desperately need. Then the insurers say that the process is too
expensive and takes too long. Then those same insurers pass those wasted costs on to their
customers in the form of higher premiums. That‟s not just dysfunctional, it‟s also disingenuous.
What‟s also dysfunctional is the way that some insurers are using the road traffic claims portal
system. These are insurers who say it‟s too easy to claim for a soft tissue injury sustained in a
road traffic accident. They complain that there is no evidence of an injury. Well there certainly
won‟t be any medical evidence obtained in a case when insurers make offers before there is time
to get that medical evidence. These are the same insurers who took part in building the portal
system which requires medical evidence, and yet they can‟t bring themselves to use it properly.
Another way in which insurers are generating a dysfunctional system is the way they deal with
personal information. You may recall how Jack Straw became interested in motor insurance after
a friend of his was involved in an accident and was pestered by all sorts of people wanting Jack‟s
friend to bring a claim. Well I also have a friend. And this friend of mine was not involved in an
accident. His car was, but not him. He had parked his car, got out of it, crossed the road only to
look back and see a lorry reverse into his car. He of course, as a good customer should, informed
his insurance company. And after that, and having reported this incident to no one else, my friend,
just like Jack‟s friend, was pestered by numerous people suggesting he should bring a claim for
personal injury compensation. That‟s an example of an insurance company being dysfunctional –
and not responsible.
When insurers can‟t resist abusing the personal information they get from their customers and
using it to add to their profits by way of referral fees, and then wonder why the number of claims
goes up, they are as deluded as the chronic alcoholic who doesn‟t seem to be able to understand
why he keeps waking up with a headache. He can‟t stop himself from opening the drinks cabinet
but then desperately asks somebody else to take away the key.
And of course the claimant has a personal responsibility – and it‟s actually quite simple – to tell the
truth. We, as claimant solicitors and officers of the court have a duty to find the truth, and it goes
without saying that we all want to eliminate fraud. So it‟s really frustrating when insurers are so
reluctant to share information with us. If they have information that makes them think that a claim
is fraudulent then they should tell us. We‟ve asked them often enough. But, at a recent conference
one insurer told us “Why should we share more information with you? What‟s in it for us? It‟s much
better for us to run cases all the way and then get more costs back.” So, that‟s really going to help
with the fight against fraud.
Another area of terrible dysfunction is in relation to employers‟ liability insurance. Pause for a
moment and ask yourself - for whose benefit is employers‟ liability insurance? It is for the benefit
of the injured person. It also provides protection for the employer against a large claim for
compensation. It makes sense for all concerned. It‟s for the same reason that we all are required
to have motor insurance.
The dangers of asbestos have been known and increasingly understood from the early 20th century.
Sadly many employers continued negligently and wrongly to expose people. The terrible effects of
that exposure only come to light some twenty, thirty or even forty years later. For some the effects
are fatal, such as mesothelioma and lung cancer. Others develop debilitating diseases such as
pleural thickening or asbestosis.
Steven Lewis, the chief executive of Zurich wrote of the insurance industry “What we sell is a
promise, a promise to our customers that when it matters we will be there when they need us”. But,
for a small but significant number of disease claimants, including the terminally ill suffering from
mesothelioma and lung cancer, that promise turns out to have been utterly empty.
The ABI says it is the insurers‟ intention and practice in mesothelioma claims to pay proper
compensation as quickly as possible. These are empty words to a dying man who is entitled to
compensation but who won‟t get it because the insurers of his negligent employers cannot be
traced. As the financial services authority has said, those dying men are subsidising the insurance
industry. The whole purpose of employers‟ liability insurance has been turned on its head and it‟s
What have the insurers done about it? Well they have done a few things. They have tried to
improve the tracing of employers‟ liability insurance. In the last formal report of the EL code of
practice, people needing to trace insurance for mesothelioma got up to the heady heights of
achieving success in 51% of cases. Hopefully the new tracing system introduced recently will
improve on this, but it still won‟t be enough. Insurers do employ people to try to track down policies.
But those same insurers also tell us that it doesn‟t matter how hard they try they will never be able
to find every insurance policy. Apparently, records go missing or are destroyed when insurers are
taken over by other insurers.
The path to compensation for many claimants is littered with broken promises. It‟s obvious what
needs to be done. We need a fund of last resort. We need an employers‟ liability insurance
bureau. The insurance industry needs to start paying what it should pay. It has received the
premiums with which to pay these claims. This is the industry‟s corporate responsibility and
insurers individually and collectively need to step up, accept their responsibility for this scandal and
put it right by agreeing to and funding an employers‟ liability insurance bureau.
As lawyers our responsibility to our clients and to the court is to gather and present the relevant
evidence. If we can‟t do that then we are no lawyers at all. It‟s for us to get the evidence to win the
cases. And, once in court, the judge‟s responsibility is to listen to all the evidence put before him.
Someone else who, by virtue of his position, has a great responsibility to listen to the evidence is
the Prime Minister. He still likes to quote the myths peddled by those hostile to the rights of injured
people. And it‟s those myths that need to be slain, not the mythical creature he calls the health
and safety monster. Occasionally, Mr Cameron will accept the need to go and look for evidence
and he will ask his good friend Lord Young and, later, Professor Loftsted to go and do that. But
then he ignores their evidence. Lord Young says the compensation culture is more perception
than reality. Professor Loftsted concluded that in general there is no case for radically altering
health and safety legislation. Does that stop Mr Cameron in his tracks? Not a bit of it. Yes, the
record this country has in relation to health and safety is a good one compared to many and the
numbers of accidents and deaths at work has gone down over the years. But we should not be
complacent as the number of deaths in workplace accidents actually increased last year. And the
effects of poor health and safety at work are huge. The costs of these are borne by society at
large. Again dare I quote the evidence from Professor Loftsted? He reported that 4.4 million
working days were lost due to workplace injuries and that the overall cost of workplace accidents
and ill health is up to what he calls a staggering £20 billion a year. Perhaps if employers in the past
had taken a bit more care about health and safety we wouldn‟t have the terrible legacy of asbestos
killing 4,000 people every year. These are people who die one at a time struggling for their very
breath. To them health and safety is not a matter of red tape, but one of life and death.
The Prime Minister seems to want to take us back to a bygone era, where children were sent up
chimneys and people lost limbs with no recourse and no criticism of irresponsible employers. I
don‟t want to live in a country like that. And it doesn‟t make any economic sense. It might make
sense to the reckless employer but it doesn‟t make sense to society as a whole, which has to pick
up the cost. If we want to look at the big society we also need to look at the big picture and yes,
actually, look at the evidence.
There is a real danger that when people decry health and safety, mock it and use it as a term of
abuse that the best of what it really means is put in jeopardy. It‟s ironic that in this Olympic year
we have this full frontal assault on health and safety when we should be proud of the achievements
of building the Olympic park site in east London - probably the safest Olympic construction project
ever. And on time and on budget. The Prime Minister should listen to the Olympic delivery
authority‟s head of health and safety talk about how health and safety was woven right through the
project and became part of the DNA of the way in which everything happened. This is no albatross.
This is no monster. Six people died for the last Olympics in Beijing. In Greece at least 14 workers
died for their Olympic games. No one has died in the construction of the London Olympics. Mr
Cameron, your attitude to health and safety is misplaced, misinformed and plain wrong.
I need now to turn to the changes to costs and civil justice which are about implementing the
recommendations of Lord Justice Jackson, in England and Wales.
The reforms proposed to implement the Jackson Report will result in money being taken from
successful claimants‟ damages. That is the intention. And indeed the way it will work is that the
more unreasonable, and therefore costly, the behaviour of a defendant in defending a claim, the
more it will cost the claimant. There will no longer be restitutionary damages because injured
people will receive less than they should, and that will mean that the catastrophically injured
claimant may not be able to afford the care that he needs. The seriously injured claimant may not
be able to pay off the debts run up whilst off work without sick pay. Many claimants, particularly in
the current economic climate, are on low wages with poor sick pay provisions, and for them to
recover only part of their damages, in itself, reduces access to justice.
If I stole your wallet, would you be happy if I offered to give it you back, only with 25% of its
contents removed? Would you be any happier if I explained that I had given it all back to you – but
it just cost 25% to do that?
As the LASPO Bill finishes its journey through the legislative process we all now know where we
stand and what the future holds. Or do we? The lack of detail in the Bill is frightening. The Act will
do little to give lawyers and their clients the clarity they seek. The Act makes no mention of the
increase of 10% in general damages. The Act will be silent on qualified one way cost shifting, and,
as yet, there is no public timetable for decision-making around how it works. What will the
relationship be between QOCS and Part 36? When will clients be afforded the protection of
QOCS? Will clients carry financial risk and need to insure against it, or will QOCS effectively
remove the need for ATE, except for disbursement funding? ATE providers need information
quickly to start to build new models in time for the April 2013 launch.
Firms need to do their sums – to understand what clients will pay on success fees and whether
competition may eradicate them in certain areas. They need to decide how to communicate new
fee models to clients. They need to think differently about risk, prospects of success, and
affordability of cases. Yet this work cannot start until the Government, with care and proper thought,
fulfils its responsibility to finish the job and communicate the rules.
There is still much to be fought for over the detail of QOCS and Part 36. APIL will do its level best
to ensure that those details are fair to injured people.
There is also the most ironic and inconsistent policy coming out of the Ministry of Justice.
Jonathan Djanogly doesn‟t just think it‟s necessary but actually desirable that injured people‟s
compensation should be at risk when they pursue their claims. And yet, at the same time, the
government is promoting the benefits of before the event insurance, when a claimant can litigate
without risk. We all understand that the current premiums for before the event insurance do not
represent the full costs of providing legal cover and that the business model is based upon referral
fees. So, with the banning of referral fees, BTE insurance premiums will go up. The less well off
will not be able to afford them. Those who can afford it will be encouraged by insurers to buy it,
adding to people‟s bills when I thought the purpose of the reforms was to save money. And what
will that insurance actually give you? Well what it should give you is the ability to bring a claim,
assuming it has reasonable prospects, without having to worry whether you will keep your house at
the end of it and also without having to worry whether you will keep all of your compensation. So
the government is encouraging and creating a two-tier compensation system: risk free full recovery
for those with BTE and partial, risky recovery for those without. That‟s access to full justice for
some and partial justice for others. To say that before the event insurance is the answer is no
answer at all when many people will not be able to afford to have it.
When the government published its response to its own consultation on reforms to the county court
system it said it was going to carry out a full evaluation of the RTA claims process before deciding
what to do further, and how quickly. What‟s happened to that review? Well it seems that after a
chat with the government‟s favourite insurance companies on Valentine‟s Day it has made up its
mind on some key issues, including the timescale and that fixed fees in the portal must come down.
And so the government‟s juggernaut of reform presses on, suiting nobody but the insurers‟ agenda.
The government seems to have been persuaded by some of the benefits of an assembly line
approach to personal injury claims. No doubt, modern systems can help to deal with claims
efficiently. There is nothing wrong with anything which generates efficiency and early admissions
of liability. However, an assembly line approach fails to recognise how different people are and
how different people's injuries can be. Our clients have the right to be treated as individuals and
not just statistics to be processed. A mass production approach is the enemy of the rule of law and
any sense of restorative justice. Also, a fixed fee set at a level that works for an ABS owned by an
insurer which captures claims from its existing customers will not work for the local firm with normal
marketing overheads. And, anyway, how did the insurer get those customers in the first place?
Through extensive and expensive marketing. It is funny how the government does not make
insurers lower their premiums on the basis that “the premiums are too high - just look at what those
insurers spend getting all those meerkats on TV”. Any extensions to existing portals must not
create a flawed system which suits only insurers. It‟s APIL‟s job, and mine as your new president,
to try to get the government to listen to the voice of injured people and not allow their needs to be
forgotten in the push for efficiency and cost savings.
This is a world in which it seems that the injured person and his representative have become
pariahs. There‟s no level playing field here – it‟s all uphill and the drawbridge is up. Our challenge
in the next year is to work to break down some of those barriers, to get people to understand what
injured people really face; to get the Government to help us prepare for its „brave new world‟ and to
help those who really can‟t help themselves. We must try to get opinion-formers to see past the
smoke and mirrors and recognise the actual evidence, the real story. It‟s an enormous challenge.
I am up for it. But I can‟t do it alone. APIL can‟t do it without you, its members. More than anything
we need your clients to help by letting us tell their stories, spelling out what the real impact is on
their lives. If we are to make a difference over the coming year that is our responsibility.
And the government has one key responsibility which underpins everything – to listen. To listen
not just to those that support and fund the Conservative Party. Not just to big business. Not just to
the insurance industry. But also to those who are dying of asbestos related disease, to the families
of those who have died in accidents at work; to those who are catastrophically injured in road traffic
collisions. If, as we are told, we are all in this together then they, most of all, deserve to be listened
to and heard.