Why children and the mentally handicapped deserve better treatment
Our national law provision for victims of hit and run drivers
The MIB’s main
function is to fulfil the United Kingdom’s obligation under European Community
law to appoint a compensatory body to deal with these claims. It
will be readily appreciated that court proceedings are not possible in the
absence of an identifiable defendant to serve.
However there are concerns that children and mentally handicapped
accident victims do not receive fair treatment under the present regime.
The MIB is a private
company set up and managed exclusively by senior executives appointed from
every major insurer that underwrites motor insurance in the UK. There is
no independent representation on the MIB Board by other stakeholders or special
interest groups. Although it is a non-profit making organisation, its
personnel are often recruited from the insurance sector and it is itself an
important part of that multi-billion pound industry.
The Department for
Transport admits that it does not monitor or otherwise influence the way in
which the MIB investigate and deal with claims under the 2003 Agreement.
This arrangement confers a wide autonomy in the way in which these claims are
investigated and settled; it is one that lacks transparency and
accountability.
Proper Safeguards for the vulnerable
In a normal court
action against an identified and insured driver, the Civil
Procedure Rules provide a triple set of safeguards whenever a claimant is a
child or mentally incapacitated:
·
Firstly, Rule
21.2 insists on the appointment of a litigation friend in proceedings and where
there is no one suitable, the Official Solicitor assumes that role.
·
Secondly, Practice
Direction 21.5 insists on a claimant submitting a legal opinion on the whether
a proposed settlement is fair, in all but the simplest of cases, so it can arrive
at an informed decision.
·
Thirdly, Rule
21.10 states that any settlement or compromise (whether before or after
proceedings are issued) is only valid if it has been approved by the Court.
The vulnerability of
protected parties to any lesser regime is perfectly illustrated in a very
recent Supreme Court case. In Dunhill v Bergin the Court set aside a consent order that had
been agreed on behalf of a protected party in the presence of a trainee
solicitor and a barrister who were representing her. No one appreciated that she was mentally
incapacitated and so, her lawyers did not appoint a litigation friend or make a
formal application for the £12,500 settlement to be approved by a judge under Rule
21. To make matters worse, they seriously
underestimated the true impact of the victims’ injuries. Subsequently, it became apparent that her
claim was worth up to £2,000,000.
The Supreme Court ruled
that the consent order should be set aside, even though the claimant had legal
representation and notwithstanding that no one realised that she was mentally
handicapped at the time, because the agreement’s validity depended upon the parties
obtaining court approval. Lady Justice
Hale, who delivered the Supreme Court’s unanimous ruling in Dunhill, said:
‘...the
Civil Procedure Rules is clear: that children and protected parties require and
deserve protection, not only from themselves but also from their legal advisers.’
In the context of an untraced driver claim
under the 2003 Agreement, she might well have added that they also deserve
protection from a third source: from the commercial interests of the motor insurance
companies that control the MIB.
In 2010 Sir Rupert
Jackson’s extensive evidence based investigation into personal injury
litigation costs revealed a widespread concern that insurers were consistently attempting
to settle claims at levels that were significantly less than the victims’ true
compensatory entitlement.
Gaps in protection
Because the basic
safeguards provided by the CPR do not extend to the 2003 Agreement, a child or
mentally handicapped individual is exposed to being confronted by the MIB with
an offer to settle that is effectively a fait accompli, with insufficient
means of telling whether it is a fair proposal or not. Some claims involve complex issues that
involve a question of judgment on liability, causation and quantum – sometimes
involving a number of different experts, all chosen and instructed by the
MIB.
The six week period
for appealing an MIB’s decision or offer to settle does not provide nearly
enough time, in a complicated claim, to secure expert second opinions and legal
advice; assuming that the applicant realises the need.
There are growing concerns
that the lack of supervision, transparency and accountability as to the way the
MIB operates, compounded by the absence of suitable legal safeguards, as
outlined above, poses a real and significant risk that children and the
mentally handicapped are exposed to unfair compromises and settlements at
undervalue.
These issues and the legal
intricacies they involve are considered in more detail in an article that the
New Law Journal has recently published: An Untidy Arrangement? You
can access this online using this link.
Flawed ministerial review
In February 2013 the
Right Honourable Stephen Hammond MP published the Department for Transport’s review
of its arrangements with the MIB for victims of uninsured and untraced drivers.
One of his proposals for victims of
untraced drivers was that children and protected
parties (i.e. the mentally incapacitated) should have their settlements approved
by an independent arbitrator but only where they are not legally represented,
see Question 5 of the Consultation
Paper.
What the Dunhill case illustrates,
so vividly, is the importance of the triple safeguards conferred under the
Civil Procedure Rules. These do not
apply to untraced driver claims as they are not court proceedings.
To deny an independent appraisal as to the adequacy of a compromise or the sufficiency of a settlement where
lawyers are involved, as the Minister proposes, is to risk a similar disaster
to that which nearly happened in Dunhill. This is especially true under 2003 Agreement
where the fixed scale of legal fees is only sufficient to fund legal representation
in the simplest of cases. Meanwhile,
under the current unrevised scheme, claims are still being settled (i) without
any legal representation and (ii) without any opportunity for an independent
assessment by a suitably qualified arbitrator, except on appeal.
Similarly, to restrict the arbitrator’s
independent assessment to cases where there has been no independent legal
representation means that the arbitrator’s decision will almost inevitably be
subject to a degree of bias. This is because the arbitrator’s decisions will be
based on the one sided evidence of the MIB carefully chosen experts as well as
its own representations. The danger here
is that this presents no adequate opportunity to test or challenge the veracity
of that evidence through forensic examination.
The Minister’s proposal also ignores a ‘Catch
22’ conundrum presented by an unrepresented child or mentally handicapped
individual: how can someone, whom the
law deems incapable of the level of understanding necessary to equip them to
conduct their own case, possibly be expected to know when to challenge the
MIB’s appointed expert’s opinions or its views on apportionment of liability or
even the value the MIB has put on the claim, still less how to go about
articulating their case or appealing a decision?
The Minister has been
informed of these shortcomings.
Unfortunately, so far, he has declined to indicate whether he is willing
to improve the compensatory safeguards for children and the mentally
handicapped under the 2003 Agreement. It is over a year since he announced his
review and still we have had no indication of the Minister’s intentions
or when he plans to implement them.
Call for action
If you agree that
injured children and mentally handicapped victims of untraced drivers deserve
better protection under the 2003 Agreement then I would be very grateful it you
would contact me to discuss how best to increase press and public awareness on
this issue to persuade the Minister of the need for urgent reform.
Nicholas Bevan
Solicitor, Legal Services Consultant, Mediator, Legal Trainer
Office 01823 325365
Mobile 07968 427134
33 Queen Street, Taunton, Somerset, TA1 3AX
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