News bulletin from ARAG UK
21I S S U E
Justice in Crisis
Anyone who has picked up a paper in The fees of up to £1,200 to bring an employment INSIDE THIS ISSUEPage
recent months will understand that tribunal claim, introduced in 2013, helped to cut
our justice system is coming under the number of claims being submitted by about 2 Tribunal fees back on thePage
enormous pressure. The huge IT failure 70 per cent, but the total has more than doubled table as claims continue to
experienced in January, which delayed since the fee regime was ruled unlawful in 2017, risePage
trials up and down the country, was just and is now approaching its pre-fee level again.
a symptom of a much wider malaise The number of claims being resolved has not 3 Civil Liability Act
that has made it ever harder for people kept pace though, resulting in frustrating and 4 Specialist products that go
to obtain legal advice and, ultimately, to costly delays for employees and employers alike.
access justice. Of course, all this makes legal expenses beyond “fitness to practice”
insurance more important than ever. Legal Expenses Insurance –
The Legal Aid budget has seen huge cuts While lauded by many insurers, the passage it’s our specialist subject, but
since LASPOA (the Legal Aid, Sentencing and of the Civil Liability Act, at the end of last year, is it yours?
Punishment of Offenders Act) was passed in is just the latest example of access to justice
2012, falling by more than a third in real terms, being curtailed, especially for poorer and more We are delighted to be shortlisted
between 2011 and 2018. vulnerable people. for the ‘Specialist Coverage Award’
Over the same period, the number of solicitor Whether the Act will do anything to resolve
firms in England and Wales working on civil legal the (in fact, declining) problem of spurious and at the Commercial Insurance
aid cases reduced by more than 30%, leaving exaggerated claims or just move it on, remains Awards on the 7th March!
areas of the country and millions of people with to be seen, but nobody within our industry or
no provision at all, for some case types. beyond it seems that optimistic about the much-
Other routes to legal advice have become heralded reduction in motor premiums the
increasingly difficult to navigate, as numerous legislation is supposed to enable.
Law Centres and Citizens Advice Bureau ARAG’s mission seems more relevant, here in
have been forced to close, following cuts to the UK of 2019, than ever. As our business grows,
their funding. The number of not-for-profit steadily and securely, we remain as committed
organisations offering civil legal aid is less than
half what it was in 2011. as ever to enabling all
Among widespread reports of court buildings citizens, regardless of
falling into serious disrepair, more than 200 their means, to access
courts and tribunals have been closed entirely our struggling justice
over the past decade, and the properties sold off. system.
But attempts to modernise the justice system
and reduce the number of cases being heard MD Tony Buss
have not been entirely successful.
RAG F e b 2 0 1 9
Tribunal fees back on the table as
employment claims continue to climb
It has been more than 18 months The Good Work Plan 12 to 52 weeks; and the so-called Swedish
since the employment tribunal fee The statement includes some significant Derogation, which allows employers
regime, introduced back in 2013, changes to employment law that the to pay agency workers less in certain
was ruled unlawful by the Supreme government intends to implement in circumstances, will be abolished.
Court. While claims numbers have response to consultations conducted last All of these changes and more should
more than doubled in the absence year following the 2017 publication of the be introduced in either April this year or
of fees, they are still not quite as independent Taylor Review of Modern April 2020 with draft legislation already
high as they were before fees were Working Practices. published for some of the proposals.
introduced. Among the reforms that employers need The government has also committed to
to be aware of are the right for all workers clarifying the test for employment status,
There are many reasons to suspect that the (rather than just employees) to receive a which has been the subject of much debate
reintroduction of some sort of fee to bring written statement of particulars on the first and litigation in recent years, but this may
an employment tribunal claim is unlikely day of their work; increased penalties of prove a trickier task.
to happen in the foreseeable future. Quite up to £20,000 for aggravated breaches of While the various measures in the Good
aside from the humiliating climbdown the employment law; and a ban on employers Work Plan give employers plenty of new
government had to endure when its previous taking deductions from staff tips. regulation to get their heads around over
fee regime was found to be unlawful in 2017, Breaks of up to four weeks will no longer the coming year and should pass into
there is also the current scarcity of both interrupt continuity of employment for law without any hitch, the possibility
parliamentary time and political capital to purposes such as bringing an employment of employment tribunal fees being
consider. tribunal claim; the reference period for reintroduced seems like a somewhat more
In November, however, Permanent Secretary calculating holiday pay will increase from distant and uncertain prospect.
to the MoJ Richard Heaton told the House
of Commons Justice Committee that a new
system of fees was being worked on, while
insisting that there were ‘no immediate
plans’ to introduce fees.
The possible reintroduction of fees was
hinted at again in December, when the
Department for Business, Enterprise and
Industrial Strategy published its Good Work
Plan policy paper.
RAG F e b 2 0 1 9
Civil Liability Act It“noMsbouetroruapnLdceaegtapeldolEitcxhipeiessnywseiesallrh.”ave
After years of debate, the Civil Liability Bill the Lord Chancellor through regulations. very seriously injured accident victims, back
passed, somewhat quietly, into law at the However, the proposed damages tariff in 2017. Two years and two Lord Chancellors
very end of 2018. The implementation is published by the government early in 2017 later, the demands for a better mechanism by
scheduled for April 2020 following a pilot in suggested that the victim of an injury lasting which to calculate the discount rate have been
October 2019. The impact for motorists who more than four months but less than six, met and the clock has started ticking on their
are unfortunate enough to be injured in an whose injuries may well have prevented them due date.
accident will be significant. We answer some from working for some of that time, would Who the Lord Chancellor may be come August
key questions for brokers: receive just £450. is anyone’s guess, but he or she has until
What is changing? Any exceptions? the 6th of that month to decide upon a new
The Act creates a separate process for the A small concession was made to exclude the discount rate, which is likely to fall between
settlement of soft-tissue injury or ‘whiplash’ claims of “vulnerable road-users” not in a zero and one per cent.
claims resulting from a road traffic accident motor vehicle, such as cyclists, pedestrians, What does all this mean for drivers?
and will fix levels of compensation depending motorbike riders and their passengers. Aside from the obvious reductions in
on the severity largely defined by how long the When will this be in place? compensation for whiplash injuries and
injury lasts. While the reforms are now on the statute lump-sum payments for very serious injuries,
The reforms also ban the practice of trying books, when they will come into force is not the increases to the small claims limits mean
to settle such claims without first assessing yet set in stone. The government stated that it that a lot of injury victims will find it difficult
medical evidence of the injury, as many plans to implement them in April 2020, which to challenge the minimal compensation they
insurers have in the past. should allow plenty of time for the online are offered, unless they have Motor Legal
What about the small claims court? claims process, on which the reforms depend, Expenses Insurance.
While not mentioned in the Act itself, the to be properly tested and rolled out. And for legal expenses insurance?
government intends to increase the small However, because Motor Legal Expenses These reforms obviously make Motor Legal
claims court limit to £5,000 for injured Insurance policies issued from April 2019 Expenses Insurance more important than
motorists and their passengers and £2,000 will still be in force after the reforms are due ever to motorists. As the legal costs for
for other injury claimants. This is likely to be to be implemented, Motor Legal Expenses challenging a contested claim will no longer be
implemented when the other reforms come Insurance policies will have to be updated this recoverable in 90 per cent of personal injury
into force. year. claims, these will have to be met by the policy,
How much will injured motorists get? What about the ‘discount rate’ so premiums are likely to rise. However, motor
While the legislation explicitly defines The subject of some heated discourse, Liz insurers have assured motorists that these
“whiplash injury”, the compensation for Truss tweaked this variable for adjusting reforms should bring down motor premiums
different durations of injury will be set by lump-sum compensation payments to benefit significantly, which should offset any increase
in legal expenses premiums.
RAG F e b 2 0 1 9
Specialist products that go
beyond “fitness to practice“
Following a recent change in industry arrangements will not respond to particular Other specialist cover includes performers
legislation for one of our business partners sets of circumstances. list disputes, primary care appeals,
customers’, we undertook intensive research We have designed comprehensive, specialist attendance at coroners’ inquests, criminal
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design a comprehensive, specialist product representation. Our new products are tax disputes, partnership disputes and
for them. available for distribution through broker professional contract claims.
GPs and other medical professionals are specialists in the market - to individuals
exposed to very particular legal insurance or groups of individuals within a practice To see how we can help you
risks that arise from the intensively setting, or to NHS or private medical and your customers, get in
pressured environment they work in. practices. touch with one of our team
State-backed liability insurance provides The individual Fitness to Practice policy today on 0117 307 2278.
protection against actions for civil damages includes a medico-legal helpline, consumer
that are brought against practitioners legal advice helpline and additional ARAG
working in the NHS. Medical defence unions helplines such as counselling assistance and
may provide assistance to members to crisis communication. We offer £100,000
defend allegations of professional mis- limit of indemnity to cover regulatory
conduct on a discretionary basis and surgery investigations, fitness to practice and
medical malpractice policies respond where professional disciplinary hearings and
a patient has suffered harm. However, these appeals/ loss of registration.
ARAG Our current modules include: Events
NEWS - An introduction to Legal Expenses
Insurance CALENDAR 2019
Legal Expenses - Essential Business Legal
Insurance – it’s our - Family Legal Solutions 7th March
specialist subject, Commercial Insurance Awards
but is it yours? With more modules being added soon! 10th April
Customer Service Excellence Awards
As experts in the fields of insurance and We also have a fantastic series of animated 15th & 16th May
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