Whiplash Reform: proposals on fixed costs for medical examinations/reports and related issues

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1 Whiplash Reform: proposals on fixed costs for medical examinations/reports and related issues Kennedys response to Lord Faulks QC, Minister of State for Justice 28 May

2 Legal advice in black and white The firm is leading the way on the key issues in personal injury. Legal 500 UK 2014 Kennedys is a UK top 30 specialist national and international legal firm with unrivalled expertise in litigation and dispute resolution. We have over 1,200 people across nine UK and ten international locations. This includes 166 partners, of whom 37 (plus their teams) specialise in personal injury cases. Our fee income in was approximately 117million. Our lawyers provide a range of specialist legal services across many areas such as: insurance/reinsurance, general liability, including motor, personal injury, employers and public liability and product liability, as well as property, construction and engineering, professional indemnity, healthcare, life and health, occupational disease, employment and health and safety, environment, marine and aviation. We handle a wide range of insurance disputes and litigation with a client base that includes general insurers, global composites, Lloyd's syndicates, underwriters, selfinsured PLCs and self-insuring government bodies. The firm has expanded considerably over the last five years, largely as a result of organic growth but also by selected lateral hires made to strengthen key areas of expertise. Today, Kennedys is well equipped with a regional network that can provide our specialist services throughout the UK. Kennedys' global and national network enables us to meet the current and future needs of our clients, the insurance market and the aspirations of our people.

3 Further Information Kennedys would be pleased to provide a representative to give oral evidence should the opportunity arise. Any enquiries about the response or requests for further information should be addressed, in the first instance, to: Niall Edwards Partner for Kennedys Law LLP Kennedys Ventana House 2 Concourse Way Sheaf Street Sheffield S1 2BJ Telephone: +44 (0) niall.edwards@kennedys-law.com 2

4 1. Do you agree with the proposal to introduce mandatory fixed fees as set out in Annex B for all initial medical reports? Yes. The overarching objective of the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents from 31 July 3013 (PAP) is to simplify the claims management process and at the same time provide better control and visibility over litigation costs. The PAP goes hand in hand with a revised fixed recoverable costs (FRC) regime for claimant legal advisers. We, therefore, agree it is sensible to extend that principle to those medical experts who provide a medical opinion about a claim. 2. Do you agree with the level of fixed fees for all initial medical reports as set out in Annex B? If you do not agree with the level, please provide evidence for your argument. We question why two levels of fee are being proposed for an accredited expert: 180 for a GP or physiotherapist and 420 for a consultant orthopaedic surgeon. We understand that the intention behind these proposals is to build a system towards accreditation for experts in order to improve the quality of medical expert reporting in whiplash claims. We welcome such a measure. If, therefore, an expert is to be accredited for the purpose of the proposed scheme, why then would one discipline of expert receive less or more in fixed fees than another? What is the reasoning behind the split fees? In other types of personal injury claim, an expert would submit an invoice based on the length of time it has taken to produce his report, rather than his medical discipline, per se. We see no reason to deviate from this working practice for whiplash claims (or any other sub-set of claim). In addition, by allowing a significantly higher fee for an orthopaedic surgeon, might a claimant consider that he will get a better report and favour instruction of an orthopaedic surgeon over other types of expert? If the aim of 3

5 these proposals is to produce a straight forward process, we suggest the focus should be on ensuring only suitably qualified experts are part of the scheme with as few dividing lines as possible. To do otherwise, risks adverse and unintended consequence. We, therefore, suggest that there is one fixed fee across the board of all accredited experts. We would propose a fee of 230 (which includes the cost of obtaining an addendum report on medical records). We assume that the details behind the accreditation scheme will aim to ensure that all accredited experts are suitably placed to reach a diagnosis and decision on prognosis and deal with any causation issues regardless of their medical discipline. We would also have thought that to be capable of receiving accreditation an expert would need to be able to show, among other attributes, that they had several years experience of providing diagnosis and prognosis in relation to soft tissue spinal injuries. Our insurer clients are also concerned to see that an expert providing an expert report is disassociated financially with any treatment or therapy that has either been undertaken already or may be proposed. 3. If the insurer submits a version of events, the defendant would need to give the insurer specific authority to do this. We would therefore be grateful for views on how this can most appropriately be achieved, and on the provision of the defendant s version of events more generally. We understand that the presumption behind the process is that the provision of additional information will only occur in a limited number of cases (in the same vein that claimants will be expected to obtain one medical report only). We support the advantages of simplicity. However, the MoJ must appreciate that challenging a whiplash claim has, so far at least, as much to do with an assessment of credibility as a medical condition. This needs to be at the front and centre of the detail surrounding the accreditation scheme to ensure accredited experts ask the right questions of a claimant s version of events. 4

6 The operation of an accreditation scheme as supported by the revised PAP itself should, as hoped, deter disingenuous claimants and improve the quality of medical reports. Nevertheless, thought is needed as to what evidence an expert on such a panel should be required to consider before carrying out an assessment in order to form a balanced and comprehensive opinion on liability. At the very minimum, an expert should always be required to assess a claimant with sight of the claimant s relevant medical records (if any). Our understanding of the proposed accreditation scheme is to empower suitably qualified experts to make better decisions about an alleged injury. They will be central to the liability decision making process. Therefore, it is vital to ask them to make such decisions in the context of looking at a claimant s medical records to be able to provide a decision in the context of a medical history. It is counter-intuitive to suggest that lower value claims do not place any significance on a medical history claim value is irrelevant to the credibility of a claimant. These proposals offer the opportunity to raise the barrier to entry and actively take a step towards dissuading spurious claims. Again, such details and considerations should be taken forward with the implementation of the accreditation scheme. If the defendant wishes the expert to see its version of events (as provided for by draft para 6.19A PAP), liability should not be an issue at this stage. The expert should be able to consider all relevant documentation during the instruction/assessment stage process (i.e. once Stage 1 has been completed) and form an objective opinion on the claimant s alleged injury, as with other types of personal injury claim. If the expert s opinion as based on all relevant documentation is then supportive of the claim, the report would be submitted as part of the settlement pack, thereby triggering the Stage 2 process. It is anticipated that full-on low velocity impact (LVI) cases should be denied and fall out of the Portal in any event. Aside from those few claims, it would be beneficial to the expert to have sight of both the insurer incident report form (if possible under the policy) and, critically, the vehicle damage documents including inspection photographs, where possible. These key extra documents might help to give the expert a general feel of the severity of the road accident to counterpoint the subjective symptoms then reported to the expert by the claimant. 5

7 We would ask that PAP para 6.19A is amended to reflect the suggested requirements above. 4. Do you agree with the proposal that claimant and defendant representatives may only commission a specified proportion of medical reports any given intermediary? If so, what should the proportion be and why? It is proposed in the draft PAP that where a medical report is obtained via an intermediary such as a medical reporting organisation, neither claimant nor defendant should have any direct or indirect financial interest. We are unclear as to the distinction in meaning between indirect and direct and fear that such a definition could give rise to difficulties with interpretation. Any ambiguity in wording risks unintended consequences including satellite litigation. In addition, how would this restriction be policed? Moreover, we are unclear as to the reasoning behind this question. If a successful accreditation scheme is established, the independence of a medical expert will be at the front and centre of that arrangement. Whilst in principle it should not, therefore, matter what arrangements are in place with regard to intermediaries, the reality is that the consolidation of the legal market has presented difficulties with regard to independence. We question whether this set of proposals is the right vehicle to address those concerns. The Government has said it is committed to achieving greater transparency regarding financial and other links between the new business models as permitted by the Legal Services Act 2007, which may have shared interests in a claim. The regulatory regime dealing with those new business models is central to closing any such loopholes and we must trust that a suitably robust regime will be developed and deployed. With regard to whiplash claims and establishing an accredited scheme, the main condition we want to see imposed is that the expert is not a treating physician to the claimant both with regard to past or proposed treatment. 6

8 We would go further and insert into the PAP that an expert should not receive any commercial benefit form being instructed to report over and above the recoverable fixed fee. 5. Do you agree with the proposal that representatives should be required to commission reports on a rota basis from a variety of intermediaries? Yes. Please see answer to Question Do you have any other proposals as to how such independence could best be secured? Yes. Please see answer to Question Do you agree with the proposal that the cost of the report is not recoverable if the report is commissioned outside the fixed fee scheme? Yes. In order to allow the defendant/insurer to see the origin of the report, we suggest a requirement for an accredited expert to declare his membership of the scheme as part of his declaration of independence in his report. Whilst outside the scope of this response, we would urge the Government to ensure that such a requirement forms part of the detail behind the scheme. We understand that similar models are being considered, including that of the General Medical Council, which provides the support for a registration-based scheme against which the details of an expert could be checked to ensure they are indeed accredited. Policing here is vital to include a clear sanction for not using an accredited expert. 7

9 8. Do you agree that the above proposal is a sufficient deterrent? We are concerned that the above proposal alone would not act as sufficient deterrent. We, therefore, suggest that the claimant should also be denied Stage 2 costs. 9. Do you agree with the proposal that a pre medical offer could be made if a report is commissioned outside the fixed fee scheme? It is our understanding that one of the main reasons behind introducing a requirement for an early accredited medical report is to end the practice of pre-med offers. We are unsure, therefore, as to the reasoning behind this question. The association between the claimant appointing an expert outside the accredited list of experts and the defendant insurer making a pre-med offer is difficult to understand. Surely, all experts under the PAP should be accredited to meet the overall objective? In practice, how would a defendant even know the claimant has instructed an unaccredited expert until it is too late to make a pre-med offer? 10. Do you have any further comments to provide? We are concerned by the proposed definition of a soft tissue injury claims. In allowing for associated psychological problems, we fear there is a real risk of a creep of psychological claims. If the initial expert suggests psychological injury, the defendant may well be cautious about making a liability decision until a report from a psychologist is obtained. This would add time and cost to the process and arguably defeats the purpose of creating a system to deal with relatively straightforward claims. Furthermore, there is both a danger here of an unqualified expert reaching towards a view on ancillary psychological injury and missing that there may be a recognised psychiatric injury and also attribution of higher awards at Stage 3 8

10 based upon the misconception that a recognised psychiatric injury has been incurred, when it has not. Overall, we are concerned that the wording of the definition is conceptually more widely defined than what many might consider a whiplash injury. We would advocate focus on a stricter and more objective formula for assessing injuries to the neck and back, as with other European countries. 9

11 Kennedys is a trading name of Kennedys Law LLP. Kennedys Law LLP is a limited liability partnership registered in England and Wales with registered number OC ach Avenue, London, EC3M 5AD. 10