Are PI cases suitable for ADR?

When is alternative dispute resolution (ADR) appropriate for personal injury (PI) cases? Kim Harrison, principal lawyer, and Jennifer McDade, solicitor in the serious injury team at Pannone part of Slater & Gordon and Brent McDonald, Old Square Chambers discuss current attitudes towards ADR in relation to PI cases.

How would you describe the current attitude towards ADR for PI cases?

Kim Harrison and Jennifer McDade (KH and JM): Generally positive—PI cases are almost always resolved through some form of ADR—usually joint settlement meetings or offers/negotiations between the parties’ solicitors. Speaking from a claimant background we tend to be wary when a defendant suggests a formal mediation, as most of the mediators we have seen proposed tend to be from a more commercial background, which isn’t always helpful in a PI claim.

BM: My impression is that the appetite to resolve claims by way of mediation and Joint Settlement Meetings (JSMs) is positive. There is still an expectation that as long as parties take a reasonable stance it should be possible to resolve most issues without the need for a trial.

Has the attitude shifted at all in light of the Jackson reforms and Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO 2012)?

KH and JM: We have seen more early Pt 36 offers, even on occasion just after the letter of claim has been received by the defendant. It is perhaps an attempt by some defendants to put the risk back on to claimants and defeat the aims of qualified one way costs shifting, rather than a genuine attempt to settle—as in a serious injury claim it will rarely be appropriate to settle at such an early stage before the prognosis is clear.

BM: There was a sense initially that attitudes may harden against compromise in the early days of the Jackson reforms. I think that this has changed as courts and parties have become overburdened with applications arising out of the new rules.

What types of ADR are most appropriate for PI claims?

KH and JM: JSMs are particularly appropriate in a serious injury claim, where the claimant has built up a relationship with counsel in the case, and trusts their advice and judgement. In our view, both sides get a better result when negotiations are led by counsel who are very familiar with the issues in the case.

In asbestos cases, particularly mesothelioma cases where the client’s life expectancy is extremely limited, the first priority is to issue court proceedings as quickly as possible using the specialist mesothelioma fast track system in the High Court in London. We often find this spurs defendants into making early Pt 36 offers of settlement and negotiations can take place via letter, e-mail or phone as there is very limited time in these sorts of cases for a formal JSM.

BM: The most successful type of ADR in my view remains the JSM, normally conducted fairly informally without a mediator, where (hopefully without any grandstanding or pomposity) representatives can reach an accord. If both sides are receiving sensible advice and have fully exchanged information, then you would expect them to reach a similar view when it comes to settlement value.

What makes a PI case suitable for ADR?

KH and JM: Most cases where liability is not in issue will be suitable, provided the evidence is complete. It is only usually when some form of ADR fails that a case heads for trial, and usually where the gap between the parties is too large to be bridged by negotiations. If liability is in issue, it may be preferable for there to be a split trial, so that the parties can try and reach an agreement on quantum should primary liability be established.

BM: Realistic clients.

What are the pros and cons of ADR in PI claims?

KH and JM: The big pro is that reaching a negotiated settlement provides certainty for the client which is extremely important, particularly if their claim has been going on for some time. It avoids them having to give evidence in court which can be a very stressful and nerve-wracking experience.

The con, if ADR fails, is that joint settlement meetings and mediations can be expensive and can also create some element of delay—although if successful they are certainly cheaper and quicker than going to trial.

BM: The pros are that it generally allows parties to reach a reasonable outcome with the minimum of expense and stress. The cons are all those interesting arguments which you never get to make or see decided.

Are practitioners recommending ADR as an alternative to the courts?

KH and JM: We would always recommend ADR if it was appropriate—court will always be a last resort, but one we won’t shy away from it if it is necessary to get the best result for our clients.

BM: The standard court order from the Ministry of Justice now expressly requires parties to commit to ADR (or at least explain why they do not consider the case suitable), but I think good PI practitioners have always recommended ADR in suitable cases. There was also some discussion of using arbitration as a means for evading some of the less desirable aspects of the Jackson reforms at this year’s Personal Injuries Bar Aassociation conference.

What are the trends and what are your predictions for the future?

KH and JM: The full implications of the Jackson reforms and LASPO 2012 are yet to be seen, in particular in relation to Pt 36. What is clear is that now more than ever it is imperative for both sides to take specialist legal advice, from a lawyer well used to dealing with complex and high value claims.

It seems likely that, from the claimant point of view, defendants will be looking to shift the risk on to claimants and to make early Pt 36 offers. It will now be more important than ever to gather evidence quickly and efficiently, to ensure that when the offer arrives you are in the best possible position to advise the claimant.

BM: I see no sign of the use of JSMs abating. We may also see some firms and insurers agreeing on a standard form of arbitration for certain types of claims, hastened further pressure to cut costs and by the reforms to whiplash cases currently which is currently out of consultation. It is also likely that courts will continue to increase fees making other forms of dispute resolution more attractive.

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

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