Is arbitration the future of personal injury law?

09 May 2014 | 10 min read

Will the Jackson reforms and the Mitchell decision push personal injury lawyers towards arbitration? Paul Ashurst, senior associate at Shoosmiths, and Barry Osborn, senior litigation executive at asb aspire, explore the possibilities of arbitration in personal injury cases.

What are your views on the post-Mitchell legal environment?

Paul Ashurst (PA): The main effect of the Mitchell judgment (Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537, [2014] 2 All ER 430), and the way the courts have subsequently applied the Jackson reforms, has been to create a general feeling of uncertainty and a reduction in the trust and co-operation that claimant and defendant lawyers have developed since the introduction of the Civil Procedure Rules 1998, SI 1998/3132(CPR). Procedural advantage is now more important than dealing with cases justly. More applications are being issued not because they are required, but because they may be required. This is putting pressure on court resources, leading to judicial time being diverted into the management of procedural issues rather than resolving disputed issues of fact and law.

Different courts are applying the new regime in different ways. Some are trying to ignore it, others are trying to be hard-nosed. The inconsistency in both the reported judgments and the outcome of the hearings we are attending is leading to a sense of uncertainty and distrust. Lawyers are required to act in the best interest of their clients, so we now have a ‘wait and see who fails’ approach. This has turned the collaborative working that the Jackson reforms had encouraged to be stood on its head.

Now we are asked to concentrate on timetables, costs and failures to comply. If you force every case through case management and cost budgeting procedures at an early stage of the litigation process, you will create blockages in the system. The more you set dates for the future, the more court lists will begin to fill up, the harder it will be to get dates from experts as they will be booked for trial that in all probability won’t happen, but they will have them in the diary anyway. In short, the courts won’t cope and I fear that the Jackson reforms will result in the courts sinking under the weight of their attempts to manage—but without the resources to do so.

Barry Osborn (BO): The Woolf reforms in 1999 were, in my view, a step forward, a narrowing of the issues in the interest of justice. The Jackson reforms and in particular the Mitchell decision, intentional or not, are a step backwards. They have created an atmosphere of ‘keeping your cards close to your chest’ in order to ‘ambush’ your opponent, increasing the issues (particularly in respect of costs)—access to justice is now overridden by some wider, intangible sense of justice. If the individuals involved in the litigation do not see justice being served, then surely this will undermine the reputation of the whole legal system.

Do you think arbitration is a viable alternative to court proceedings for personal injury lawyers and their clients?

PA: I start from the view that individuals have the right to have their civil disputes resolved within the civil justice system. It’s worth remembering that we do operate in an adversarial common law system where people have the right to go to trial. If you force people to use alternative means you will undermine trust in that system, especially if you force them out of the system on the grounds of saving costs. Each party should have the right to allow the court to resolve the issues that are in dispute. I don’t object to the use of mediation—I encourage it—but often this process doesn’t work because it is seen as separate from and not part of the litigation process. To set up a new arbitration system with new rules and which is seen as different from, and not part of, litigation is not, in my view, the answer.

BO: Arbitration is definitely a viable alternative to court proceedings for personal injury lawyers. However, the lay clients may take a little convincing, as often those that feel they have been wronged want to have their day in court.

The cases that are most suitable for arbitration are perhaps the higher value claims where, post-Mitchell, the courts are adopting a less flexible approach. The number and expertise of the expert witnesses is such that they are often very busy with the amount of work attendant on highly respected experts in their fields. There is a very real risk that one or more of your experts will not be able to comply with a court deadline and this evidence could be lost. There is no such risk if the matter proceeds via arbitration.

It is increasingly the case that the parties attempt to narrow the issues and agree things between themselves, only for the court to interfere and take points that the parties themselves were not raising—once again, this is not something that would happen in an arbitration environment.

What features of arbitration do you see as being particularly attractive/unattractive for personal injury disputes?

BO: The attractive aspects of arbitration to personal injury lawyers are:

Control

The parties take back an element of control in the running of the matter.

Risk of error

Failure to ‘dot every i and cross every t’ does not run the risk of sanctions or strike out.

Speed

The speed of running a matter will increase as there are usually no long delays in waiting for decisions to be made on points of dispute, only the issues in dispute need to be considered.

Fees

There are no court fees, this is particularly attractive taking into consideration the recent increases. There would however be the costs of the tribunal to be paid and therefore fees would not be a major driving factor.

No cost budgeting

Each party simply advises of their costs to date as the case progresses—the increased speed and efficiency should result in cost savings as cost budgeting has done nothing but increase costs and the issues in dispute between the parties. The time between allocation questionnaire and the case management conference was previously spent on narrowing the issues and agreeing directions, now the time is spent preparing and negotiating cost budgets when the majority of the time the costs being argued over will not actually ever be incurred because the matter will settle before trial.

Specialisation

The matters could be heard by personal injury specialists as opposed to judges that have to cover a broad spectrum.

It has been suggested that one option would be for personal injury lawyers to agree their own set of institutional rules to apply in personal injury arbitration cases. Do you think that is a realistic outcome when claimant and defendant firms are involved?

PA: It’s possible. Having been involved in the Association of Personal Injury Lawyers (APIL) pre-CPR and the Forum of Insurance Lawyers when the claims portal and rehabilitation code of practice in high-value claims were being negotiated, I do believe the two sides can work together. However, as I have said, it seems to me the Jackson reforms have put this co-operation at risk.

My own view is that Jackson/Mitchell is the wrong direction of travel. The more the courts seek to control litigation, the more they will be forced to take responsibility for the management of cases. Our civil justice system has neither the ability nor the resources to take on such responsibility. Within an adversarial system, it is the job of judges to decide on matters of law and fact that are in dispute—it should not be their role to interfere with matters that have or can be agreed between the parties. Why should we waste court resources asking judges to agree what has already be agreed?

I would advocate that within the court system we introduce an alternative dispute resolution (ADR) stage (the format to be chosen by the parties) that needs to be completed before they are allowed to progress to a trial. At the pre-trial review hearing, the parties should be required to report to the court on the outcome of the ADR, disclosing what has been agreed and with reasons as to what has not been agreed, as well as presenting all the evidence they seek to rely on at trial. The judge, using their case management powers, could make full, realistic and informed decision on what, how and when a trial should take place. This would mean that the cases that have settled are removed from the system.

BO: I think it is realistic that claimant and defendant firms could agree a set of institutional rules because of the universal lack of trust of the current system following Mitchell. There are already schemes such as the Personal Injury Claims Arbitration Service in place, and it is more than feasible that its model could be agreed across the industry.

Do you think that PI lawyers will require further training on arbitration law and practice should there be an increase in the use of arbitration for the resolution of personal injury disputes?

PA: As no one has ever really come up with an answer for why ADR hasn’t taken off in personal injury claims (though it maybe because it’s not built-in as a procedural ‘step’), any education to date has not really had any impact or practical meaning for most lawyers.

BO: Personal injury lawyers that deal with the types of cases that, in my view, are suitable for an arbitration scheme are likely to be used to being in an arbitration arena. However, if it was to become standard across the industry then training on the nuances of the schemes would be required. Lawyers already have a duty to advise their clients to consider ADR—any client that wants certainty and justice, in my view, should be guided towards arbitration.

Interviewed by Duncan Wood.

The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.

This article was first published on Lexis®PSL Arbitration on 6 May 2014. Click here for a free trial of Lexis®PSL.

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