200 million reasons not to believe insurers when they talk about the discount rate
Posted By : Bill On 28/02/2018 19:00:00
There was an article in the Law Gazette the other day headlining that Direct Line profits were up £200m in a year – described as an enormous rise in profits – one year on from reforms that were predicted to catastrophically reduce sector profits, leading to premium increases for all of us. Naturally the insurance industry spin was that it was all due to claimants and their lawyers.

Specifically, Direct Line reported that it expects operating profits for the full 2017 year to be £610.9m - a leap of 51.4% on 2016. Also, dividends have risen this year by 40%, and Direct Line added it would pay a special dividend of 15p, up from the 10p it paid a year earlier.

Last week, Allianz UK announced that operating profits for 2017 had increased 26% - but added that they would have been £22m higher but for the change in the discount rate – I wonder how they calculated that.

I agree with Sam Hemsley from Thompsons, who pointed out that the insurance sector benefitted from the 2.5% rate for 16 years before last year’s change.

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The NHS - at last an admission that clinical negligence claims are caused by poor care!
Posted By : Bill On 18/02/2018 11:45:00
The NHS has placed yet another story in the news; “The government is to restrict lawyers by capping the costs that they can recover in clinical negligence cases.”

A working group will discuss a cap on cases “worth” less than £25,000, and the Medical Protection Society hopes “to see a bolder decision …. with cases up to the value of £250,000.”

Jeremy Hunt, the health and social care secretary said, interestingly “that the best way to cut negligence costs was ‘to reduce patient harm in the first place’” – at long last an open admission that clinical negligence claims are caused by poor care.

They trot out, yet again, the example of “one instance”, where lawyers claimed £83,000 for a case in which the patient was awarded £1,000. I agree that that is outrageous, and of course they are right to condemn disproportionate costs.

Oddly enough, I agree with what lies behind their publicity, although not with their approach. It applies to personal injury litigation as well as clinical negligence; in a society in which public money is getting more scarce, we may not be able to afford the Rolls Royce claims system that we’re used to.

However, I would approach it differently. I would try to train staff so that mistakes are less common, and I would radically overhaul the litigation management. Part of the reason that costs are so high is that the NHSLA, as it was, litigated, in my experience, very badly.

Of course, a real worry about a cap on costs is that, if they want to, the NHS litigation body can defend claims in a way that gets the claimant’s costs up to the cap very quickly, depriving them of the chance to present a good claim. An anecdotal example is the insistence on a medical report at the outset of every claim; that can cost thousands, whereas discussion between sensible claimant and defendant lawyers could plot a cheap and reasonable way forward.

Considering that the NHSLA changed its title to NHS Resolution, you might think that they were pursuing ADR (which is what my suggestion is) vigorously – no sign yet.

The working group will have representatives from the Department of Health and Social Care, the Civil Justice Council and the Ministry of Justice. It comes in response to a consultation on introducing the cap last year and was a key recommendation in a review of civil litigation costs by Lord Justice Jackson.

Niall Dickson, chief executive of the NHS Confederation, said the announcement was “a step in the right direction”. He said resources were being diverted from the NHS.

He added that the £25,000 limit was “a positive first step”.

The cap includes a scheme designed to offer quicker access to compensation for families of children left severely brain damaged after birth.

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Life outside London
Posted By : Bill On 15/02/2018 11:00:00
Lovely to see an article in The Times today headed “A strong case for life outside London”, highlighting the advantages of a pupillage in the provinces. It refers to our new pupillage film discussing the advantages of taking pupillage at a large regional set rather than in London.

It’s of real interest to me, because I created our pupillage system about 30 years ago, and we have been very progressive ever since. I think we were the first to offer guaranteed earnings for new tenants over their first two years, on the basis that it would help with their debt.

What might interest pupillage applicants is that the video shows life through the eyes of two of the young barristers who practise here, gives potential pupils a flavour of how their careers can progress at a full-service set with geographical coverage across the whole of the north.

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Baby brain injuries
Posted By : Bill On 14/02/2018 11:00:00
I read today that compensation claims for new-born babies suffering brain injury or cerebral palsy have gone up by 23% in the year 2016/7.

I realise that this is a different statistic from the actual number of babies born in that year with brain damage or cerebral palsy, but one possibility is that the actual number of severely injured babies has risen significantly.

If that is so, it may reflect poor standards of care, rather than the NHS’s usual explanation of rapacious lawyers.

Interestingly, a report published last year by the Royal College of Obstetricians and Gynaecologists concluded that most baby brain injuries in labour are avoidable.

So, if the number of brain injuries at birth has risen, the Royal College conclusion suggests that care standards have dropped.



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