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Injury lawyers' recommendations
to Government
24 Nov 2011
by Robbie Dunmore
Personal injury
lawyers are very worried
about the possible impact of Government reforms to the 'no win, no fee'
system on their own firms' finances and their clients' access to
justice. Currently, most car insurance
injury
claims are pursued via conditonal fee agreements (CFAs) that
carry no financial risk for the client and which reward lawyers with
success fees for those cases they win. The success fee is in addition
to the payment of their base costs for the case.
The
purpose of the success fees is to provide a financial reserve for
lawyers to be able to pursue the more complex cases, clients they could
not otherwise accept given their financial risk. By getting rid of the
current CFAs and replacing success fees with contingency fees drawn
from the client's damages, as is prescribed in the current Legal Aid,
Sentencing and Punishment of Offenders Bill, this legal financial
reserve fund will be largely lost, seismically changing the legal
landscape in terms of those cases lawyers feel able to take on and,
consequently, reducing access to justice, possibly for a sizeable
group, of genuinely deserving claimants.
Even
the Government's own impact analysis of the CFA reforms accepts
that the dice would be loaded in favour of the defendant (such as a
liable car insurance company) rather than the litigant (such as a car
accident victim) and that as a consequence some could be denied access
to justice.
 The Association
of Personal Injury Lawyers (APIL) argues that
the provisions of the
Legal Aid, Sentencing and Punishment of Offenders Bill will fail to
address the problem of excessive and expensive litigation; while the
Chair of the Motor
Accident Solicitors Society (MASS), Donna Scully
(pictured),
comments that: “The Government has completely missed the target here.”
Apil
and MASS want the personal injury clauses to be removed from the
Bill and instead are looking for those features listed in the yellow
box below to be included.
Much
of what they propose is already being looked at by the Government and
other regulatory bodies,
would be an automatic
consequence of a referral fee ban or has a
commonality with the proposals to be brought forward by Jack Straw in
his Motor Insurance
Regulation Bill.
MASS
itself chaired a meeting of
relevant stakeholders recently with a view to gaining access to the
Insurance Fraud Bureau (IFB) database routinely - something that has
been agreed in principle and which would go a long way towards
assisting them with their fourth requirement. (See: Injury lawyers to access
car insurance fraudster data for more).
APIL / MASS Proposals
1. A ban on the passing on of injured people’s private details without
their explicit consent, on every occasion.
2. An extension of the strict ban on cold calling which currently
applies to solicitors; insurers and claims management companies must be
held to the same rigorous standards as solicitors.
3. Tighter regulation of personal injury advertising to prevent
misleading, exploitative and distasteful advertising.
4. A strict duty on insurers to report suspicions of fraud to claimant
lawyers as soon as they arise: sharing information in insurers’
possession is the surest way to tackle fraud.
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The Government, as
APIL and MASS are well aware, has embraced the Jackson
Report recommendations (on 'no win, no fee'
reform) with vigour and, as their lack of a full and transparent
consultation on its implimentation demonstrated, they are not of a mind
to compromise on what they regard as a vital and urgent package to
reduce the high cost of litigation in England and Wales.
As
we reviewed recently in our report: Car
Insurance in the UK - The 2012 Review, these Government
reforms are not likely to have as profound an effect on reducing costs
as they might hope. This is soemthing that injury lawyers have been
telling them from the outset.
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