BLM Partner Elected President of FOIL

22-11-2007

On the eve of taking up his presidency of the Forum of Insurance Lawyers, Henry Bermingham talks to Post Magazine about maximising the organisation's impact in the corridors of power, addressing the adverse way in which claims and claiming are affecting society, and how he is intent on uncovering the next generation of Foil activists.

Tabloid stories of schools banning conker matches, closing adventure playgrounds and cancelling school trips often seem to have more of the 'urban myth' about them than anything grounded in reality. But Henry Bermingham, incoming president of the Forum of Insurance Lawyers, has had the unwelcome experience of witnessing such risk averse behaviour first hand.

Unusual as a Foil president, in that he practices primarily in the public sector, Mr Bermingham leads a team of people that deal daily with claims against councils, housing associations, probation officers - the full gamut of public sector organisations outside central government. Consequently, he has also seen the impact of claims on the way councils operate - how they react to their cost and how claims drives their behaviour.

Referring to this impact as a "mixed bag", he adds: "On some levels it's good; organisations are taking risk assessments more seriously, which creates the positive side of the equation in that things are a lot safer. But the flipside is a world in which play areas are being closed, we have the apocryphal tales of schools banning conker matches and a situation where school trips have become highly politicised.

"Many local authorities are now very reluctant to run school trips - parents are seeing six-page consent forms. This might be a slight exaggeration but the point is that it has become a much more complicated exercise."

Smoke without fire

His personal experience certainly seems to suggest there is a large degree of truth in these - often sensationalist - media stories. "I've sat in meetings where I have had to advise authorities on all sorts of risk management strategies that are arguably risk averse. One classic example centred on whether or not to keep a tree that was in school grounds. Trees obviously bring many benefits but they can also be climbed and, in high winds, parts might get blown off. All of a sudden, a tree becomes a liability."

Due to his interest in the whole debate over how claims and claiming is altering society, Mr Bermingham decided to alter the format of Foil's annual general meeting this year, to include a panel debate in place of the more typical series of speakers.

"This debate also raises an interesting constitutional point," he stresses. "No party has ever stood on a platform and said 'we want to ban conker matches at schools' or cut trees down in their grounds. This is a change that has been wrought on society without any - or certainly very limited - democratic input. And that is something we have got to ask questions about, which is why I decided to debate this at the AGM, using representatives from both the claimant and defendant sides."

Presidential power

Switching to a more optimistic channel of thought, Mr Bermingham details the plans for his year-long presidency and comments on the organisation's current healthy state. "In the past three years, Foil has become more influential than ever. You can see that from the amount of press coverage and the committees we sit on - for example, our involvement with the Civil Justice Council and the consultation on personal injury process reform. We have arrived at a situation where we are - and I don't think this is overstating it - pretty influential in the marketplace. And I fully intend to build on Lea's (Brocklebank) year by using that influence."

But he also feels a need to get back in touch with Foil's membership: "While I'm conscious the organisation has forged ahead, I'm also anxious that, as a membership organisation, we are only as strong as that membership. So I'll be taking time to engage with our members, ensuring they have direct access to me and attending regional meetings."

By visiting the regions and major membership firms, Mr Bermingham also has an ulterior motive - he's on the look-out for the next generation of Foil activists. His mission is to encourage firms to target their associates, their 'bright young things', to become future regional representatives. And the sell shouldn't be too hard - not if he uses himself as a case study. Mr Bermingham's own experience proves this can be a canny move in terms of career progression. "I became a regional representative in 2000, when I was an assistant solicitor. Being involved with Foil enabled me to not only develop my practice but grow on a personal and professional level. Put simply, a defendant lawyer that understands the wider marketplace is more useful than one that doesn't."

Legal lobbying

Obviously, taking up the reins as Foil president involves a lot more than addressing internal succession planning issues and spicing up the AGM. The body exists as a means to ensure its collective voice is heard in the corridors of power and the next 12 months promise to be fairly lively on this front. Two pieces of reform that will fundamentally affect the way defendant lawyers work are set to take shape during Mr Bermingham's tenure and he is adamant that Foil will be at the heart of both.

The first of these is the fundamental shake-up of the profession set to follow the Legal Services Act, which received Royal Assent on 30 October.

"The architecture for legal services reform is now in place; we've got the statute," comments Mr Bermingham. "Over the next 12 to 24 months there will be a great deal of discussion about the statutory instruments to bring it into force.

"And this reform has potentially enormous implications for lawyers - effectively introducing the ability for non-law firms to conduct litigation right across the piece, from domestic conveyancing to catastrophic litigation. The ramifications for how my members do business are potentially massive.

"We will be right at the heart of that debate because you can guarantee that once non-lawyer capital starts coming into law firms, it will alter the way they are run. This may be for the better, or it may be for the worse. That will depend on the regulatory model. So, from a defendant lawyer point of view, if there was ever a time they needed Foil, they need it now."

Patience on personal injury

The second issue of extreme importance is, of course, the personal injury claims process review - where Foil is waiting as anxiously as every other stakeholder for the Ministry of Justice to deliver its long-promised report on the consultation responses.

"Government appears to be taking the stance that, to get this right, it will need to take its time and think things through," he comments. "That's a very responsible attitude - after all, we don't want a repeat of what happened following the introduction of conditional fee agreements. But the difficulty with that approach is that the desire to get it right can slow the process down.

"We must not lose momentum or allow ourselves to get sidetracked by some of the smaller issues. Whether Foil needs to actively campaign on that point or not will be revealed when the government response comes out."

Mr Bermingham does, however, have a degree of sympathy for the government on this. "When I was going through our own response, it took me 40 minutes to an hour just to read the first draft. If you times that by the 300 responses submitted, it is easy to see the MoJ has a massive task on it hands."

As the wait continues, does Foil have any concerns that the resultant proposals will represent a much compromised version of the original - or, indeed, that reform will not happen at all?

"One of the key problems is that many of the responses are opposed to each other. If you put yourself in the position of the reader of all those responses - what is the middle line? There isn't an easy one to chose. But from the defendant's point of view, controlling costs has got to be the main criterion."

Based on what the MoJ has suggested to date, is he confident that this new system would control those costs - and not enable them to creep in at other junctures? After all, other commentators have voiced their fears that stripping out claimant solicitor investigation, as well as the 'filter' of ATE insurers on cases, will increase the number of spurious claims slipping through - simply because insurers have got to admit or deny liability so quickly.

"That's the problem with the big unknown - because we don't know what level of fixed fees the government has in mind, we can't do a cost-benefit analysis and that creates real difficulty in forming a view over whether the new process will work or not."

He adds that Foil members were less concerned about costs creeping in elsewhere as they were about other unintended consequences. These include a worry that claimant solicitors will be looking to avoid the new regime by strictly focusing on the time frames provided - in essence, looking for the defendant to slip up so the case can fall outside and no longer be restricted by fixed fees. "Under the current proposals, there is a potential economic incentive to do this, and that could drive behaviour to try and avoid the new system. So we believe a greater degree of flexibility needs to be built in."

To illustrate this, Mr Bermingham uses the example of a public liability case - where much of the concern lies over the proposed timescales. "The mechanics of a PL case need to be distinguished from those of employers' liability and motor. In a motor case, the defendant usually knows they have been involved in an accident - not least because their car is damaged. Equally, in an EL case you have a controlled environment - the workplace. So you have an accident book and accident date, meaning you pretty much know from the start there is the possibility of a claim.

Accident waiting to happen

"But with PL, you do not know there has been an accident until someone tells you - and, with a lot of PL work, that's only when the letter of claim arrives."

To develop this argument, he uses the example of an injury claim faced by a supermarket and the practical difficulties of quickly investigating an incident long since past. Somebody slips on the premises, hurts themselves but goes away and only claims when they are fully recovered. "If that trip resulted in a complicated ankle fracture, for example, one that was unstable for two years, the supermarket might not receive the letter of claim until two and a half years after the event. And they have known nothing about the accident until then."

Consequently, Foil's response was to essentially argue that if a defendant is unable to admit liability in 30 days, but then does admit two weeks later, the case should be allowed back into the system. "How that two week delay is dealt with in terms of any penalty is a matter that needs to be decided - but you should be able to opt back in. This we feel would address concerns associated with the tight timeframes."

Other member concerns centred on fee levels and fraud. Regarding setting the correct level of fees, he comments: "If this is too high it will create 'injury millionaires', but too low and it will drive claimant solicitors to the wall. If that were to happen, access to justice would be lost."

To illustrate the fears surrounding fraud, he uses the example of a motor claim. "You have to make a decision on liability in 15 days but only discover you have a problem when the medical report arrives - or three months later when someone tips you off that the accident was in fact staged. So, where fraud is involved, members are concerned it may be a case of decide in haste and repent at leisure."

Under the new system, the idea is that admissions will be binding except in cases of fraud which, in Mr Bermingham's view, is a proposition that is remarkably easy to agree with - "until you ask the question: what is fraud? Is a case a fraud claim when you become suspicious? Is it a fraud claim when you have a concrete piece of evidence that suggests it is - for example, an inconsistent medical note.

"That is the very real difficulty we are going to face in defining fraud. The legal definition, in terms of what you would need to prove if you were running a defence of fraud, is a very high standard indeed - and I don't think most cases attract that level of evidence pre-litigation."

Subject to a caveat about the - as yet unknown - fee levels, Mr Bermingham is optimistic about PI reform: "As a system proposed on paper, I feel it is a workable model - but it's down to the stakeholders to make it work. Insurers will also need longer time periods, especially on PL cases. One solution might be to re-introduce 21 day limits for acknowledging claims.

Fixed fee benefits

"Fixed fees drive good behaviours - it's that simple. If you get more money for making a case run quickly, efficiently and by not doing unnecessary work, then those who are best at this process will be the most profitable. Under the existing system, the case is worth as much work as you can do on it.

"Obviously it would be unfair to criticise all claimant solicitors - the vast majority I deal with are decent, honest people with integrity - but there are some out there who treat a file as an economic unit and will work it as hard as they can."

The original MoJ timetable of reporting back in September/October, was an important one - as it would have enabled the rules to be created in time for the next round of statutory instruments in April. This deadline is now likely to be missed, which prompts Mr Bermingham to reiterate his earlier concern about losing momentum.

"Certainly in terms of my wish list as Foil president, I would want to see draft rules and a conclusion to this by the end of my year. Whether it has arrived in the Civil Procedure Rules and is being implemented is a different matter but if all the structural steps have been taken by the end of my year that would be very satisfying."


This article first appeared in Post Magazine on 22 November 2007 edition.

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