Personal injury: Lawyers need to manage expectations
Some “moderate” personal injury (PI) claims are leaving clients worse off than they were before because solicitors are failing to consider the costs and benefits, the Legal Ombudsman (LeO) has said.
LeO also said “the onus is on the service provider” to explain the consequences of the client giving inaccurate information about their claim, which in one case resulted in the home of a client who could not afford to pay costs being repossessed.
In a thematic report on PI complaints, LeO said personal injury generated 13% of the complaints it received. In 2020/21, 53% showed evidence of poor service.
The two most common kinds of complaint upheld by LeO were poor communication (26%) and delay/failure to progress the case (24%). Failure to advise and costs problems came next, at 12% each.
On costs, LeO said firms should “clearly explain the likely costs and what they can be expected to recover”, including whether they were proportionate.
“We have seen cases where the cost benefit hasn’t been properly considered or explained and a moderate claim has left the customer worse off because the fees incurred were higher than the claim itself.”
LeO said it had seen “poor or non-existent” explanations of why funding was withdrawn.
Service providers “should manage expectations at the outset and clearly explain the role of the insurer and themselves” and conversations should be followed up in writing.
Giving false or inaccurate information could have “severe consequences, not only to the claim itself but to the claimant”, who could face criminal sanctions or bankruptcy.
“The onus is on the service provider to clearly explain the implications of giving inaccurate information and the severe consequences it can have on the funding and potential costs so that the customer can make an informed decision.”
Failing to explain this had “in one severe case this led to the repossession of the customer’s property when they were left liable for the other parties’ costs and couldn’t afford to pay them”.
Clients must be informed about success fees and what the lawyer will charge for winning the case.
“We have seen cases where a success fee has been deducted from the settlement and the customer was unaware that such a charge would apply.”
When chances of success fell, clients might want to get a second opinion, which they could only do before the limitation period ends.
“If a provider delays in informing their customer and it has implications on the limitation period and their chance of getting a second opinion, we are likely to uphold a complaint.”
Another source of complaints was repeated changes in case handlers, with LeO investigating complaints where there were “six or seven changes in the case handler, which has led to duplication of work, repetition, missed deadlines, poor handovers, and frustrations for customers”.
However, in one case included as a case study in the report, a law firm which changed case handler seven times was found not to have provided poor service because the client was properly updated each time.
“There were no periods during the firm’s representation that we found they had delayed the claim and the handovers between solicitors were always efficient and timely.”
Further sources of complaints were from clients who felt pressured into settling or unprepared for court proceedings.
LeO commented: “Most of the issues outlined in this report come down to poor communication and poor expectation management.
“Customers should be able to make informed decisions based on having relevant information to hand and they should not reach the end of a claim and be shocked or surprised at the amount owed. Service providers must make improvements to address these issues.”
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