It has been confirmed that the introduction of fixed recoverable costs in clinical negligence cases is still planned for 1 October 2016. Whilst research shows that it has been more difficult for those on lower incomes to pursue claims, it is evident that there has been an increase from those on middle incomes.
There has been and will be much debate on this subject. My concern lies with how and indeed whether law firms are considering their strategy for delivering these legal services.
We have already seen a great shift in firms delivering personal injury legal services; downsizing, doors closing, focusing on other services, selling off books of WIP and of course those with deep pockets being able to purchase books of WIP and firms in their entirety.
If the limit comes in at £100,000 as planned, what does this mean for your caseload? What percentage of your firm’s clinical negligence matters are below this threshold? Do you actually hold this data? For many, it could be as high as 80%, if not more. What does this mean for funding, staffing, space requirements to name just a few considerations?
Where we have seen PI firms succeed is where there is process and control with strong infrastructure. Does your firm have this? If not, what is the plan? Do you have working capital to throw at building the infrastructure in what is now a short timescale or are you prepared to take on additional external borrowing, if available, or inject additional partner capital? Cash is the answer here (as ever) if you want to succeed in the new world.
Success will also be built on readily available data on matters. The IT you have in place should be adequate to give you this information so that you can make quick strategic decisions. Economies of scale are going to produce the financial results you need for your firm to flourish and deliver the type of service you want to your clients.
Is now the time to get out of delivering clinical negligence services before the market is potentially swamped with firms trying to offload work that is draining their resources? Or are you ready to be a consolidator?
Yet again, we are about to watch significant change unfold in the profession and I wait with bated breath to see how firms react in the next few weeks – assuming they are proactive and not reactive.
Helen Clayton – Head of Corporate Services