My shop was bombed in a racial attack - can I claim compensation?

From The Times

The College of Law on compensation for racist attacks, joint bank accounts and the dangers of crossing the road

Last April my news agency, like others in my area, was criminally damaged by a petrol bomb thrown into the shop. The attack was clearly racially aggravated. How can I claim compensation for this damage?

The Criminal Injuries Compensation Scheme unfortunately covers only personal injury caused by crimes. If you were in Northern Ireland there is a special scheme for malicious damage to property caused by terrorism or unlawful assemblies of three or more persons, (Criminal Damage (Compensation) (Northern Ireland) Order 1977). The 1998 Omagh bombing, for example, caused £8 million damage, of which more than half has now been compensated. However, there is no equivalent for the rest of the United Kingdom.

Clearly you must consult your own insurance policy. However, malicious damage would usually be considered a special peril so may well not be covered by standard policies. Otherwise a compensation order can be made against the perpetrator when convicted. As you rightly point out racially aggravated attacks carry stiffer penalties under the Crime and Disorder Act 1998 and the police are under a correspondingly higher duty to combat them.

Thinking about wills, I understand that joint house ownership involves a document that declares a Severance of Tenancy. But what about joint bank accounts and share ownership?

Clearly you can close the account in joint names and open separate accounts. Equally, you can submit a request to your bank for a new mandate to hold the account as tenants-in-common. However, do think about this because joint accounts help the survivor to access funds after the others death. Equally, you can, by using the requisite forms, split the shareholding and reregister separate shareholdings in the company. Otherwise you can still do a declaration of trust that the shares are held as tenants-in-common, without any need to register this.

A pedestrian, when crossing a road, which was otherwise clear of traffic, had an accident with a cyclist. It was evening and the cyclist, who had no lights or bright clothing, came so fast he did not see him. When braking he fell off. They both made statements to a policeman but one week later my friend received a solicitor’s letter claiming compensation on behalf of the cyclist and asking for insurance details. Is my friend the pedestrian liable?

A pedestrian or cyclist certainly has a duty of care to other road users so your friend may be liable for negligence in crossing the road without due care. There may, however, be contributory negligence by the cyclist in riding too fast and not wearing brighter clothing. A court may apportion this at 50 per cent and give the injured party only half his compensation and in negotiations between insurance companies this may well be the likely conclusion. Unfortunately, however, whereas motorists must have insurance cover, this is unusual for other users. Certainly some cyclists do have insurance cover for claims against them (for example, through the British Cycling Federation). However, anyone with household insurance (including other members of the household) should have public liability cover including claims against them when walking or cycling. Your friend should check this and tell the solicitor. If there is no cover it may not be worth his client suing him in any event.

The battle to bring costs under control

From The Times

Legal fees in thousands of road traffic accident claims are about to be cut massively under a new scheme. Are lawyers really agreeing to cap their own charges? It's like turkeys voting for Christmas.

It was described as all-out warfare. Lawyer pitched against lawyer, battling it out over the most sensitive subject of all, legal costs. In just 18 months the legal bills in most accident claims had soared by 50 per cent. And these were cases that did not even reach court. A “costs industry” had been born, with satellite litigation spawned on costs alone; and more time and money spent on wrangling over fees than the claims themselves were worth.

But legal fees in hundreds of thousands of road traffic accident claims a year are about to be cut hugely. Under a radical regime of “fixed costs” expected to come into force at Easter, lawyers have agreed to cap their own charges.

It sounds like turkeys voting for Christmas, but if it works the framework could be the first of a series of deals on a range of legal disputes. Costs, and delay, have been the bugbears of the civil justice system, could at last be under control.

The deal has had little publicity. But privately those involved are patting themselves on the back. Over 14 months, the two sides of the claims industry — personal injury lawyers and the insurers — have hammered out the regime.

Sceptics said it was impossible. Michael Zander, the emeritus law professor and legal commentator, expressed doubts over whether a deal could ever be cut. The system had all but ground to a halt: the wrangling over costs had led to a series of technical challenges in the courts with 200,000 cases awaiting the outcome. “It was absolute war,” one lawyer says. “The insurance people didn’t like the way costs were rising and weren’t prepared to pay them.”

Michael Napier, the senior partner of Irwin Mitchell and a key player in mediating the deal, says: “In the old days we would sit down with the other side and debate the law, the merits and the liability of the case. But the first thing became costs. A disproportionate amount of time was being spent on it.” In some cases the costs exceeded the sum in dispute.

A mix of factors prompted the costs troubles. One was Lord Woolf’s reforms to civil justice that came into force nearly three years ago. Aimed at cutting costs and delay, they had failed to do the first. The reforms did succeed in encouraging more disputes to settle, but bigger costs were incurred earlier on. Then there were the Government’s “no win, no fee” reforms enabling lawyers to charge top-up or “success” fees on cases they won. The “no win” deals were underpinned by insurance — so people were protected if they lost. But either way, the insurers were hit.

John Peysner, the Professor of Civil Justice at Nottingham Law School, says: “The Access to Justice Act proved to be a shock. Costs went up and insurers who had not ‘reserved’ against this resisted the consequences, and everything followed from that.”

The knock-on meant huge delays for victims as lawyers waited for test cases to be settled. Things might have remained at an impasse but Lord Phillips of Worth Matravers, the Master of the Rolls and head of civil justice, decided — as Napier puts it — to “roll up his sleeves”. He set up a forum of 70 people, drawing the main players from all sides: personal injury lawyers, motor accident solicitors, the Law Society and liability insurers. A series of meetings followed. Napier and Peysner — “we were Ant and Dec” — chaired the mediations that were led by Frances McCarthy and Tim Wallace, former presidents of the Association of Personal Injury Lawyers and the Forum of Insurance Lawyers.

Peysner recalls: “There was deep suspicion and hostility at first. I’d get angry letters. Yet slowly but surely the animosity that had developed between the insurers and the claimant lawyers was to a large extent dissipated. If you spend time with people it’s impossible to maintain a high level of hostility.”

Everyone, he says, accepted a solution was needed. But at practical level there was a proficient well-oiled machine — first in the shape of Bob Musgrove, the secretary of the Civil Justice Council (CJC); and then in the mediation itself. The techniques had been tried and tested at Nottingham Law School, and Peysner and Napier (who had worked together on the advanced litigation degree course at Nottingham) worked well as chairmen. “There was far more commonality than any of us would have believed,” Musgrove says.

A year-long mediation requires nerve, Peysner says. But it was crucial that all the time Lord Phillips was behind the drive to reach a deal. “His support made a big difference.”

The upshot is a scale of fees which sees claimant solicitors receiving basic costs of £800 plus 20 per cent of the damages up to £5,000 and 15 per cent where they are £5,000 to £10,000. In a case settling for £10,000, the solicitor gets £1,000; in one settling for £6,000 the fee is £1,950. The average base fee will fall from £2,000 to £1,400.

The deal, Peysner believes, is “win win”, good also for the consumer. Claims will be settled more quickly and there will be certainty as to costs. On a bigger scale, insurance premiums will not be inflated to pay for rising costs.

It is not on the CJC’s immediate agenda but there is a drive by some to use the deal as a blueprint for other kinds of work. The deal means fixed costs in road traffic claims to £10,000 that settle without proceedings being issued. As there are already fixed costs for fast-track court actions up to £15,000. Peysner asks: “What about the meat in the sandwich — claims where proceedings are issued but which settle before trial? There are also other technical costs problems that could be tackled by the same method; as well as other kinds of accident, such as ‘tripping and slipping’.”

On a wider front, he and Napier say the whole process is a new way of policy-making. “It has turned consultation on its head. At present ministers issue proposals, getting back 400 responses that are all treated as of equal worth and boiling them down to proposals that may be resisted on all sides. In this way, we hammer out differences and put forward a solution that already has everyone’s backing. The homework has been done. It’s a far more effective way of solving problems.”