Paul Debney

When the Government realised that its personal injury reforms, dating back to the introduction of new Conditional Fee Agreements in 2000, had arguably created a compensation culture, it sought to rectify the situation with a range of measures, which commenced with the enactment of LASPO on 1 April 2013.

Essentially those measures consisted of a significant reduction in the costs payable to claimant solicitors for RTA claims and an extension of (low) fixed costs to the majority of EL and PL claims.

Ultimately, these measures did cause change - CMCs and claimant law firms rushed to commence claims before LASPO came into force and personal injury CMCs adapted their business models so that they were no longer paid by way of referral fees. Interestingly, claimant solicitors and CMCs then gravitated into disease claims and in particular noise induced hearing loss (NIHL) claims as the most potentially lucrative volume PI claim type. In 2013 claimant solicitors’ average costs in a low value whiplash claim were £500 but in a similar value NIHL claim were £10,500.

Since then, the numbers and average costs of disease claims have increased, as have the nature and type of employments in which claims are pursued. The numbers of ELTO searches seeking to identify insurers in disease claims has increased significantly particularly in relation to RSI, HAVS and NIHL claims. PI CMC income has risen from £238m in 2013/14 to £310m in 2014/15.

There are current proposals to introduce fixed costs for disease claims, increase the small claims track limit to £5,000 and end the right to compensation in low value whiplash claims.

These changes will likely result in a similar reaction to the last round of changes – a spike in claim numbers as claimants rush to beat the changes and a further retrenchment into disease claims, which are likely to remain the most lucrative volume PI claim type.

It is important employers are aware of this change, are alive to NIHL in the workplace and take all necessary steps to protect employees and therefore reduce the risk of this sort of claim.

Paul Debney, Partner, Weightmans LLP