Court costs are doing justice an injury

TWO lawyers, John and Paul, meet in the foyer of the Four Courts. Or maybe they are in Cork City courthouse, writes Michael Clifford

Court costs are doing justice an injury

The two lads discuss last night’s match. John didn’t get to see it all, because he had to prep for an upcoming commercial case. But they fill out a few minutes by Paul describing the match to John.

Then, they lob figures back and forth. John is retained by a client who suffered whiplash in a road traffic accident. Paul represents the insurance company being sued.

Next week, or even tomorrow, they could find their roles reversed and you have to keep one eye on the future. After a few minutes, they come to an agreed figure — let’s say 25k — that they both can live with today, and even tomorrow, if they find their roles reversed.

After enough time has elapsed to give the impression they had been engaged in fevered negotiations, they go back inside and brief their respective clients on what has been agreed. And another personal injuries claim gets settled and the boys and girls handling the legal end of things load up with more jam.

Personal injuries work provides a thick layer of jam for both arms of the legal business. It involves pretty basic stuff: A few letters back and forth, a medical report to be read, and then a chat with the opposite number, or, if you will, some “fevered” negotiations. Crucially, everybody gets paid practically every time, which is not the case in other areas of the law.

This week, the Personal Injuries Commission (PIC) issued its final report. The commission’s brief was to examine how personal injuries are being processed. The current system is having a serious adverse impact on most citizens, including motorists, householders, and particularly small-business owners.

Accidents happen. People get hurt and suffer and deserve to be properly recompensed. Processing that injury involves a legal business that often acts as a hindrance, rather than an aid, to arriving at anything approximating justice. That’s the problem.

The PIC report pointed out that awards here are among the highest in Europe. The average for soft-tissue injury in the UK is €3,984. Here, it is €17,338. This is the kind of injury that might require some physio and rest, but, on this side of the Irish Sea, it represents a minor win in the lotto.

On RTÉ’s Drivetime, on Tuesday, Mary Wilson asked solicitor, Stuart Gilhooly, who is a member of the PIC, why there is such a difference.

It’s an answer which nobody really has,” Mr Gilhooly said. “It’s been the case forever. England has always been a lot lower and just because they’re lower doesn’t mean its right. We look after our citizens much better than the UK does.

Do we really? Which citizens? This column has an alternative explanation, which we’ll get to in a minute.

The chairman of the PIC, former High Court judge, Nicholas Kearns, told RTÉ’s Sean O’Rourke that fraudulent claims are a reality in this country, “where the rewards are so much greater [than the UK] and the risk of being caught so small and where risk of being prosecuted is so small”.

A fraudulent claim is a one-way bet. You win or you walk with your tail between your legs, but you don’t lose. Mr Kearns told of a case last year, in the High Court, in which the cost of successfully defending a fraudulent claim was €300,000. With costs of that order, why wouldn’t anybody just give the chancer a fraction of that and throw his legal team some jam to make them all go away?

The report recommends the setting up of a Garda unit to investigate fraudulent claims. This is to be welcomed, but, in reality, fraudulent claims are probably dwarfed by the real issue, which is exaggerated claims.

And apart from that, the major cost is a legal system gagging for jam and a judiciary that apparently values injured citizens much more than their learned colleagues in the UK do.

The swollen size of awards would still be manageable, and the chancers would be confronted more readily, if the legal system wasn’t so prohibitive.

The legal business does not have a monopoly on thickly spread jam. George Bernard Shaw’s observation that every profession is a conspiracy against the laity still holds true over a century later.

But the jam in public injuries is having a crippling effect on premiums, for individuals and particularly for small businesses. In 2003, the Personal Injuries Assessment Board was set up to get around the cost of lawyering up.

At the time, legal fees accounted for around 40% of the total payouts in personal injuries. But the PIAB has been undermined by a judiciary that continues to dole out awards that are far more generous than what the board deems appropriate.

Why so? Maybe it’s cultural. As Mr Gilhooly observed, it has ever been thus. It’s also the case that the high awards facilitate the jam-making by the legal business.

If, for instance, awards were a fraction of what they now are, the jam would have to be spread a lot thinner to avoid the spectre of legal people being compensated as much, if not more, than the injured party.

Say somebody is awarded €10,000. Throwing in fees of maybe two grand takes the bare look of things. But what if the award was, say, €3,000? Well, the boys and girls of the legal business might have to reassess downwards the extent of professional expertise they brought to bear. Hands off our jam.

It’s not that judges are consciously looking out for their former colleagues, but in the cocooned culture of the legal world, these things are just taken for granted.

Apart from that, most claims get settled. And why wouldn’t they, when the cost of going to court is so prohibitive? It’s not that injured citizens are highly valued by the legal business, rather that the cost of fairly assessing the injury in court is not worth the bother.

The legal world isn’t the only problem. Successive governments have studiously avoided discommoding the powerful status quo.

And insurance companies have done much whining, but precious little by way of action, apart from loading the cost onto premiums.

Meanwhile, the public, and increasingly those who run small businesses, continue to pick up the tab.

The PIC report puts huge emphasis on the rapid establishment of a judicial council to facilitate the compilation of a proper book of quantoms for personal injuries. Putting the size of awards on a transparent footing may deliver some sanity to the prevailing culture.

In the meantime, whenever you fork out for a hike in your premiums, spare a thought for the jam.

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