Wednesday 12 October 2011

The Huddersfield Examiner’s report today on the ‘cash for crash’ raids across Huddersfield contains a comment from Det Chief Insp Nick Chalmers, head of the Met’s Traffic Unit investigations team, who said that: “There are a growing number of apparently induced collisions.
“These claims are fuelled by greedy solicitors who operate a no-win, no fee system.
“When a claimant gets £1,500 for whiplash, the solicitor will get anything between £6,000 and £9,000.’’

This is simply nonsense.  Solicitors are paid fixed fees for road traffic cases settled for less than £10,000. In a case that settles for £1500 the fees paid are £1,350.  This kind of comment simply plays into the hands of insurance companies. Of course, ‘cash for crash’ scrams exist and must be stopped –  but it’s not greedy lawyers that are increasing our insurance premiums.

The insurance industry has cleverly hidden some misconceived legislation, called the Jackson reforms, which are currently being pushed forward by the government.

Nigel Muers-Raby, chairman of the Consumer Justice Alliance (a coalition of charities and groups fighting the reforms) has said “Sweeping draconian changes, buried within 4 pages of a 196 page bill intend to significantly shift the financial burden of bringing a claim from the Defendant to the Claimant”.  The Jackson Reforms propose that victims should have to pay up to 25% of their damages in legal fees – at the moment the defendant insurer pays those fees.  Lord Jackson’s recommendations were endorsed by the Ministry of Justice on the 29th March 2011 and a civil justice council working party has now been set up to examine practical ways of implementing the reforms.

Recently the family of Milly Dowler (who last month obtained an undisclosed settlement with the News of the World) have attacked the Jackson Reforms stating that they believe the reforms would have meant that their action would not have been possible.  A letter from the Dowlers to the Prime Minister not to limit access to justice with the planned changes led to a government spokesman stating “We are absolutely committed to ensuring that people can access the justice system, regardless of their financial situation, which is why we are committed to maintaining no win no fee arrangements”.  It has been proposed that damages to Claimants should increase by 10% – but if up to 25% of their damages has to be paid to their solicitor then the maths is easy; victims will still lose out.

Claimant lawyers like me will be forced to fight for our clients with the odds stacked in favour of the other side, usually well resourced insurance companies.

The justification for the reforms is often said to be the compensation culture, but this is a myth often bandied about by the insurance companies.  The government’s figures do not back up the myth.  Medical negligence claims against the NHS have fallen; in 1997/1998 6,711 claims were brought.  In 2009/2010 that figure was 6,652.  Hardly the sign of a litigation culture out of control.

The insurance industry cynically blames lawyers and greedy victims for increased premiums; but it is usual a middle man, a claims management company or an insurer who receives a generous fee for the introduction to a solicitor.  The government looks good when it talks about banning referral fees but in reality it is going to struggle to do this and the practice will probably just go underground.  In stark contrast very little publicity has been given to the Jackson Reforms which, if introduced, will have an immediate, devastating effect on the compensation that accident victims receive.

The bill that deals with the Jackson reforms also addresses the costs of Legal Aid.  The Legal Aid Sentencing and Punishment of Offenders Bill (LASPO) was unveiled by the government in June this year in a bid to significantly reduce the £2.1bn annual Legal Aid  budget by £350m –  largely through a major withdrawal of civil legal aid.  The areas to be affected include welfare benefits, clinical negligence, personal injury, debt, divorce, employment, immigration and housing.  Many charities’ victims groups, insurers and law firm are concerned that the combination of legal aid cuts and the Jackson Reforms will create a ‘perfect storm’ resulting in huge numbers of people who cannot afford to bring claims.  The bill has currently gone through two readings in parliament and the Law Society –  which has backed the Sound Off for Justice Campaign against the bill – is continuing to urge people to fight the proposed changes.

For further information please contact Sarah Young of Ridley and Hall, Queens House, 35 Market Street, Huddersfield HD1 2HL on 01484 538421 or mobile 07860165850