Flawed proposals
In February 2013 the
Parliamentary Under Secretary of State for Transport, Stephen Hammond MP,
proposed that the Untraced Drivers Agreement 2003 between the Department for
Transport and the Motor Insurers Bureau (MIB) should be revised to require the
approval by an independent arbitrator of any settlement made behalf of a child
or mentally incapacitated applicant.
So far, so good but this
recommendation does not go nearly far enough. This is partly because the
Minister's proposal only applies where a child or mentally incapacitated
applicant has no independent legal advice or representation and party due to
the absence of any uniform provision for independent legal advice and
representation.
I hope to demonstrate in
this article why the appointment of an arbitrator at the conclusion of the MIB’s
investigation does not provide an effective guarantee that the claim will be
investigated properly or fairly. Furthermore,
that if a claim is investigated inappropriately or otherwise prepared badly,
this risks compromising the arbitrator’s ability to reach a fair and just
decision.
Why every child and the mentally
incapacitated hit and run victim needs independent legal representation from
the outset
It is worth reflecting
on what legal capacity actually involves before we explore the dangers faced by
those who lack it. One of the leading
authorities on this topic is Masterman-Lister v Brutton & Co [2002]
EWCA Civ 1889. In that case, Kennedy LJ cited with approval a passage
from the judgment of Boreham J in White v Fell 1987 unreported,
in which he outlined the essential characteristics that enable a person of
sound mind and full capacity able to pursue a claim unaided:
"To have that capacity she requires
first the insight and understanding of the fact that she has a problem in respect
of which she needs advice . . . Secondly, having identified the problem, it
will be necessary for her to seek an appropriate adviser and to instruct him
with sufficient clarity to enable him to understand the problem and to advise
her appropriately . . . Finally she needs sufficient mental capacity to
understand and to make decisions based upon, or otherwise give effect to, such
advice as she may receive."
Applying the simplest logic, by way of contradistinction
to this definition, a child or mentally incapacitated victim is someone that does
not possess these characteristics and so is particularly vulnerable to exploitation
in anything other than the most benign of environments.
This same vulnerability also puts the MIB
in a correspondingly advantageous position - in a compensatory regime that is
already heavily weighted in the MIB’s favour.
This produces a disproportionate inequality of arms between the
vulnerable victim and the well resourced and very experienced MIB claims
managers that handle these claims. It also
assumes almost impossibly high standards of judicious impartiality and self
restraint on the MIB’s behalf. It should
be remembered that the MIB claims managers, will in all probability have cut
their teeth in the cut and thrust of contentious litigation on behalf of the
insurance sector..
It is precisely to
prevent this kind of disadvantage that the Civil Procedure Rules insist on the
triple safeguards set out in my earlier post:
Fairer Treatment for the Vulnerable.
The Department for
Transport admits that it does not supervise or regulate the way the MIB
investigates or manages the thousands of untraced driver claims it receives
every year. This is a genuine cause for concern as the MIB, whose board
of directors is comprised exclusively of motor insurance grandees, appears to
have a glaring conflict of interest: between securing just settlements at full
value for the applicants and in suppressing the cost of those same settlements.
No safeguards
At present, there are
no suitable safeguards to protect children and mentally handicapped victims of
hit and run drivers from receiving unfair treatment at the hands of the Motor
Insurers Bureau under the Untraced Drivers Agreement 2003.
We are now more than
one year on from when the Minister first conceded the need for reform and he
has failed to deliver any reform at all.
Better reform
The Minister should
insist that an independent arbitrator, experienced in handling and quantifying
personal injury claims, is appointed to approve every settlement or compromise on behalf of children and the
mentally handicapped under the Untraced Driver Scheme.
The Minister should
also insist:
- That these individuals
have independent legal advice and representation from the outset of the claim
and sufficient funding to ensure that their interests are adequately protected
in the more complicated claims.
- That in all but the
simplest of cases, the arbitrator (under the proposed settlement approval
scheme) should insist on a written opinion from the victim's barrister or
solicitor which should consider: (a) the adequacy of the evidence obtained by
the MIB; (b) the suitability of the proposed compromise or settlement, as well
as (c) any other relevant matters such as the form the proposed award should
take (e.g. lump sum / periodical payments order).
Catch 22
Without these basic
additional safeguards, which incidentally are deemed to be an absolute
necessity in every civil action involving children and protected parties, how
can those who by definition lack the requisite capacity be expected to
recognise an unfair compromise or settlement offer for what it is; when to make
a challenge or objection to the way the MIB have prepared or investigated the
claim or otherwise to spot evidential bias that is such a common feature in the
expert evidence procured on behalf of defendant insurers and the MIB alike?.
Purblind justice
Another weakness in
the Ministers’ proposal is that without independent representation that tests
and vets the MIB’s evidence, an arbitrator will not know whether the evidence
before him is tainted with partiality or whether it is just misleading. If he only has the MIB’s unchallenged, and possibly
misleading perspective to inform him, his findings are likely to be tainted by
that bias.
Worst of both worlds
The present Untraced Drivers
Scheme is something of a chimera. It possesses elements of a continental
style inquisitional regime (in the way that the MIB investigates the claim,
makes an initial determination on issues of liability / entitlement as well as assessing
the value of the award itself) and the common law adversarial way of
investigating a claim (in the tactics adopted by the MIB through its selection
of sympathetic experts and in its timing of the disclosure of evidence etc).
The present regime exposes
victims to the worst aspects of both worlds.
In most cases the
arbitrator will have little choice other than to adopt the MIB’s appointed
expert's slant on the case, unless the victim is lucky enough to afford to be represented
and to instruct an independent expert.
A cautionary tale
The reader’s attention
is drawn to Moore v Secretary of State for Transport & MIB [2007]
EWHC 879 (QB) which demonstrates the folly of entrusting a quasi judicial role
to insurance claims operatives who are unlikely to have had any formal legal
professional / judicial training. In this case a genuinely injured victim
of a hit and run incident was secretly subjected to video surveillance on a
number of occasions. The MIB then selected some of these videos, but not
all of them, and sent them to its chosen medical consultant to ask him to alter
his original opinion. He was persuaded to beef up his original report
that had expressed, in mild terms, his impression that the applicant might be
exaggerating some of his symptoms. This was now described as being ‘a
significant degree of exaggeration’.
The MIB later
persuaded the consultant to revise the report once more, to remove any
reference to the surveillance evidence he had seen; why?. The final
version of this report was then falsified to back date it to give the reader
the misleading impression that it predated these events; again, why?. It
is abundantly clear that the independence and objectivity of this particular
consultant was compromised. The report
was clearly misleading on important particulars. A consultant that colludes in the doctoring
his report in this way seems just as likely to be susceptible to partiality in
the opinions he expresses. Alternative
explanations for the victim’s behaviour under surveillance, such as naturally occurring
variations in the severity of his symptoms or perhaps some genuine
psychological overlay, may well have provided equally plausible and innocent
explanations that supported his full claim.
The victim complained
that he was informed of these matters far too late in the day to respond to
them effectively. The late discovery of these facts prevented him from
countering the MIB consultant’s amended views with his own expert evidence. Clearly the fact that the MIB’s expert now
opined that the victim was, in effect, a malingerer had a major impact on his
credibility and on the potential value of his claim: reducing its stated value
by several hundred thousand pounds.
Not long ago, this type
of cloak and dagger tactic was nothing out of the ordinary for the normal cut
and thrust of a contested civil claim but in recent years the courts have imposed
rigorous sanctions on those who attempt ambuscades of this kind. Unfortunately, neither the Civil Procedure
Rules nor the court’s writ extend to the Untraced Drivers Scheme. Behaviour that might be tolerable where both
parties are legally represented and where the court has benefit of hearing both
sides of the case, is completely unacceptable when perpetrated by a quasi
judicial / inquisitional body.
I am reasonably
confident that the MIB’s machinations in this case were inadvertent and not
part of a deliberate ploy to cheat the applicant of his full compensatory
entitlement. Anyway, there is no way of telling whether its deception,
and that may be too strong a word for it, would have made a material difference
to the amount of the final award. However what is clear is that the MIB,
unlike ordinary liability insurers who are governed by the Civil Procedure
Rules, enjoys a very wide latitude in the way it operates: how it goes about
its investigations, whom it selects as experts, how it instructs those experts
and in the timing of its disclosure; all effectively unregulated. Can
this be right?
The absence of any day
to day supervision or accountability in the way the MIB investigate and value
their claims is something that victims and their representatives need to be on
their guard against.
Greater protection accountability and supervision
Common sense suggests
that these particularly vulnerable victims need to be protected not just from
themselves or the incompetence of their lawyers but also from the MIB
itself. The safeguards deemed necessary under the Civil Procedure Rules are
even more necessary under the Untraced Drivers Scheme.
The MIB should be
recognised for what it is: an inadequately supervised private company set up
and managed by the insurance industry and appointed by the Minister to act as
an unregulated outsourced inquisitional agent, assessor, with an inherent
conflicting interest as the notional compensating insurer.
I wonder whether
anyone at the DfT has heard about the division of powers principle?
