When considering the cost of legal services all too often the issue of value is overlooked, with the focus being on the time taken and the hourly rate applied. Effectively it has become a question of what the work cost as opposed to what value was derived from that work. This is particularly the case in relation to costs between the parties where the time taken remains a factor to be considered under CPR 44.4.
To the extent it is considered at all, the question of value in serious injury litigation currently seems to be viewed almost exclusively through the prism of the amount of damages awarded, or if considering proportionality, the sums in issue. Such a view fundamentally misunderstands a number of key issues.
Value to who?
The value of any service can only be viewed through the eyes of the person who pays for and benefits from that service. Undertaking that analysis in the serious injury sector is somewhat artificial given that the party benefiting from the service is rarely the person actually paying for the service (although it could be argued that a defendant, who is paying for the service, does benefit from a high-quality service in reduced costs/ shorter claim length). In any event when considering value one must start by considering what a claimant hopes to gain from the litigation and what value they attach to the service provided.
What do clients really value?
Market research undertaken by CFG Law confirms that the most important thing to someone injured in an accident is their well-being. The majority of serious injury claimants have limited interest in financial recompense and simply want to get better. The importance of achieving this is reinforced by the Rehabilitation Code (“the Code”) which imposes an obligation on claimants’ solicitors which goes far beyond simply securing damages. A claimants’ solicitor’s duty under the Rehabilitation Code (“the Code”) is extended to include “considering whether additional medical or rehabilitative intervention would improve the claimant’s present and/or longer-term physical and mental well-being.”
The focus for PI practitioners should be on getting the best possible outcome for the client and as such a great deal of emphasis should be placed on the Code and early intervention. In enabling a client’s recovery and complying with the Code a client is given the greatest chance of achieving the maximum recovery. This results in reduced future care and other needs and therefore reduced care and other future loss claims. The benefits of that strategy to a client are obviously of significant value. There are also significant benefits to the defendant in the form of reduced future loss claims and reduced case durations. It should also be to the benefit of society at large given the reduction in insurance premiums that should follow.
Is value added appreciated?
However, the value of that intervention is almost universally overlooked. In over 4 years working for a defendant insurance firm, I cannot recall a single occasion where a claimant actively argued that they added significant value to the claim in maximising the claimant’s recovery thereby reducing care claims and other similar heads of loss.
How is this reflected in practice?
In practice the question then posed is whether the Courts have the power to take such value into account when considering proportionality and reasonableness.
His Honour Judge Dight CBE found in May & May –v- Wavell Group PLC & Dr Bizzari (January 2018) that when considering proportionality the court must have regard to all the circumstances. He went on to conclude that it, therefore, followed that the court must have regard to both the factors outlined in CPR 44.5 (3) and those outlined in CPR 44.4 (3). Those factors include:-
- Sums in issue
- The value of any non-monetary relief
- Additional work generated by the conduct of the paying party
- Wider factors such as reputation or public importance
- Amount or value of any money or property involved
- Importance of the matter to all the parties
- Skill, effort and specialised knowledge
- Time spent
- Place or circumstances where work is done
- Last agreed or approved budget
I’ve highlighted those factors where I believe these benefits can be best brought to bear on the proportionality discussion.
It seems clear that there is ample scope within the five factors in CPR 44.5(3) (and certainly when the CPR 44.4 factors are added to the mix) for the court to take into account the value of the medical/ rehabilitative intervention.
Given the fact that successful medical/ rehabilitative intervention is likely to be the most important and valuable aspect of the majority of serious injury claim it is imperative that these issues are drawn to the court’s attention both at budgeting stage and assessment stage.
Whilst damages are undoubtedly important, the true value to all involved in serious injury is the outcome for the Claimant in terms of mental and physical well-being. A point that it seems to me is often overlooked, unappreciated and under-valued.
Do you think the industry could do more to ensure that value-added is fully appreciated, particularly on the question proportionality?