Coalition Cuts to Affect Access to Justice?

As is usual in the world of compensation claims, there is always some review or another ongoing, some change in how to save money here, add money there, regulatory changes or whatever it was flavour of the month.

Since the Woolf reforms and the Access to Justice Act in 1999, satellite litigation has been a constant companion as Insurance Companies railed against what they percieved to be the costs gravy train that claimant lawyers were enjoying.

In a nutshell, the Access to Justice Act introduced "No Win No Fee" in the public vernacular and the so called compensation culture was born. Except for one important fact: There is no compensation culture. Every study into the subject has found the same thing - there is not a compensation culture, just a perception of one driven by elements of the media and stakeholders.

Whilst there was a Labour Government, Access to Justice was enshrined as a constant tenet of thier rule. Now that the coalition government is in place, Access to Justice is getting thrown out with all the other bathwater and the emphasis on the costs of making a compensation claim are now shifting from the nominal negligent party to the nominal claimant party, in other words big business (for Bankers substitute Insurance Companies) is getting the full support of the coalition Government at the expense of the man on the street.

In place of "No Win No Fee" we will now have "Qualified One Party Costs Shifting". In place of having your costs paid by the negligent party, we will now have claimants paying anything upto 25% of thier compensation award for thier own legal fees.

(I'm sorry, I realise that the phrase "Qualified One Party Costs Shifting" is a highly technical and probably confusing phrase, but if I attempt to explain it to you, I'll also have to explain the indemnity principle, contingency fees and most vague of all conspicuous wealth!).

In simple terms, if an individual wants to make a claim today, they will likely be able to do so on a completely cost free basis, in other words they will not have to pay anything to make a claim. Their lawyer will likely work on a "No Win No Fee" basis and provide an Insurance guarantee to ensure if the claim fails, then the claimant will not pay the winning sides costs.

In any reasonable society, this should be ensrined in law. With no Legal Aid provision anybody who needs to make a compensation claim should be free to do so, without fear that if thier claim is lost they will be financially ruined.

If this important aspect of Access to Justice is removed their will only be one winner: Big Business in the form of Insurance Companies.

The average man on the street will be terrified of bringing a claim for fear of failure.

With the changes propsed by the Government from the Jackson report driving ahead full steam, very soon the cost of making a perfectly reasonable compensation claim will be prohibitive. Never mind the costs being prohibitive, what about the law itself? "Qualifed One Party Costs Shifting" and "Contingency Fees" are enough to make my head spin and I've been in the game for years!

The bottom line is this: The Coalition Government is going to force through a set of changes that will materially affect the man on the street, whilst boosting the profits of Big Business (Where have we heard that before?). Insurance Companeis will reap the benefit and have already confirmed that this will be unlikely to lead to cheaper Insurance premiums, rather bigger dividends for shareholders.

The Insurance lobby in the corridors of pwoer have been banging on about the compensation culture, fraud claims and gravy trains for years, but now they have receptive ears for thier spin and it's the general public who will suffer the consequences.

Compensation Culture? No such thing!
Fraudulent Insurance Claims? 0.007% of all claims made
Costs Gravy Train? The 3rd new downward costs scheme is still in development as we speak!
Insurance Premiums: GOING UP!

Let's face it, the Coalition Government is already destroying the fabric of society with their so called austerity measures, so removing Access to Justice for the poorest in society as well as the so called MINELA factor will not rate much in the face of Policing cuts, public sector job lossses, VAT rises and the impending and dreaded interest rate rises.

As the old sticker and poster campaign of the 1980's said "Dont Blame Me, I Voted Labour!"

Paul Manning

Paul Manning is Managing Director of Evolution Legal Service and sits on the editorial panel of Claims Management magazine.