This week, I attended a Consumer Justice Alliance event at the House of Commons
hosted by Andy Slaughter MP. It had a simple aim: ‘to inform Parliamentarians
of the importance of access to justice for all’.
Simple, yes. Perhaps you’re thinking that it sounds a little dry, too? Far from
it. The two hours that I spent at the House of Commons yesterday proved to be a
moving reminder of what’s at stake when we talk about access to justice. Why?
Because for all that the law can be complex, even obscure and rarefied,
underlying its machinations are human lives.
This became very clear as I listened, with admiration, to the stories of two
women whose husbands had been the victims of negligence. The first lady spoke
of how her husband’s treatment in hospital had rendered him wheelchair-bound
and brain damaged. This was a cast-iron case of clinical negligence, with
complicated legal and evidential issues. The lady had managed to secure
sufficient compensation to ensure that her husband’s life was made tolerable,
at least. The second woman’s husband had contracted mesothelioma, a form of
cancer caused by exposure to asbestos. This had been a particularly
difficult claim, but ultimately resulted in success, so that, again, the man’s
life was made tolerable.
Both women spoke with great dignity and power. That is not, though, the only
thing that they had in common. What also united them is that neither would have
been able to see their loved ones obtain justice if they were subject to the
regime proposed by the Legal Aid, Sentencing and Punishment of Offenders Bill
(LASPO), which is currently making its way through parliament.
The LASPO Bill has been much criticised, and no wonder. Many civil litigation
claimants are presently only able to bring claims thanks to the ‘no win, no
fee’ system in this country. However, the coalition government is intent on
pushing LASPO through, so that, among other changes, recoverability of success
fees and after the event insurance (ATE) – without which the risk of bringing a
claim is often for the most vulnerable claimant too great - will not be
possible.
The government’s reasoning lies in the drive to combat what is perceived as
‘litigation culture’. The justice secretary, Ken Clarke, says the measures are
necessary because the “civil justice system has got out of kilter”, resulting
in “spiralling legal costs, slow court processes [and] unnecessary litigation”.
With respect to Mr Clarke, so broad a brush statement misses the point. Under
the current system, the rule is that costs follow the event. Legal costs are
borne by the losing party, and claimants take out ATE insurance to pay the
defendant's costs if the claim fails. Lawyers manage the risk of bringing
claims via success fees, which are payable when they win. The LASPO Bill will
do away with this, introducing a new scheme known as ‘qualified one-way cost
shifting’, under which defendants will bear their own legal costs whatever the
outcome.
The Consumer Justice Alliance has made its opposition to LASPO clear. The
reforms are also opposed by the Law Society, the Bar Council and a number
of the costs judges in the High Court. All argue that far from facilitating
access to justice – the key driver for civil litigation reform in recent years,
ever since the Woolf Report – LASPO will mean that ordinary people are unable
to bring claims. With no ATE insurance, and costs being funded from damages,
they could easily end up out of pocket, even when their claims are as
meritorious as for those I encountered in the House of Commons.
There is no doubt in my mind that the implementation of LASPO could have a
profoundly detrimental effect on access to justice. It is to be hoped that the
moving testimony of women such as those whose accounts I was privileged
to hear yesterday reaches a wider audience, and that the government reigns in
measures that are so clearly inimical to the ordinary citizen’s ability to seek
redress when wronged.
John is one of the UK's leading personal injury solicitors, with over 28 years of experience. In addition to his role as Director of Spencers Solicitors, he is an advocate for claimant rights and believes that wholesale reform to the personal injury arena is needed to ensure transparency, access to justice and the protection of injured people. In this blog, John writes regularly about these issues.
Thursday, 27 October 2011
Wednesday, 19 October 2011
In tackling fraud, we must be careful not to deny access to justice to genuine accident victims
First the news on referral fees: it looks as if the wheels of the law won’t be grinding as slowly as usual. There is a discernible following wind behind the September announcement by the Ministry of Justice that referral fees in personal injury claims are to be banned, with plenty of media coverage driving on the calls for reform.
Indeed, referral fees in other sectors of the law are now being questioned, with the Sunday Times recently exposing the payment of referral fees in socialite divorces. One divorce lawyer is alleged to have paid fees of up to £100,000 to friends and acquaintances for sending unhappy couples her way. If true, no doubt she has been complying with the Solicitors’ Code of Conduct, but surely the payment of such bounties cannot but add to what is claimed to be the ‘compensation culture’ which ails contemporary society.
On, then, to what continues to concern me about reform in this sector. My thoughts are prompted by the fact that tomorrow I will be attending an annual conference on fraud at the Millennium Hotel in Mayfair, London. The majority of individuals present will be claims managers and fraud specialists from insurance companies, and the aim of the conference is to discuss “the industry's ongoing collaboration to achieve its fraud prevention goals”.
As vice-chair of the Motor Accident Solicitors Society, it is important that I am at the conference, both to learn more about current concerns in the insurance industry but also so that I can monitor the extent to which government reforms could have unintended consequences for injured people and road accident victims. Put simply: everyone agrees that fraud is wrong, but in combating it we must be wary of creating an environment in which genuine victims are denied justice.
Tomorrow’s conference will probably see discussion of the practice of ‘fronting’ on motor insurance policies. This scam occurs when an older, more experienced and lower risk motorist is insured as the ‘main driver’ of a vehicle. In truth, the vehicle is driven and often even owned by a younger driver, who is then added to the policy as a ‘named driver’, bringing down the cost of their insurance cover. The main culprits are parents – some 36,000 of them, according to the Motor Insurers’ Bureau. Some even pass off the younger driver as their spouse or partner, which reduce insurance costs yet further.
There is no doubt that ‘fronting’ is a valid topic of debate, and something that the insurance industry is fully entitled to tackle. But returning to referral fees, whilst the debate and appetite for reform continues apace, one senses that the government is now grappling with the huge and multifaceted problem of condensing to law the appropriate changes. This is not easy, and nor is it something that should be rushed. It is very clear that a holistic and thorough approach is appropriate: without it, change may cause more harm than good.
Wednesday, 12 October 2011
Making headway in the labyrinth
Yesterday I
appeared before the House of Commons Transport Committee, which sat to take
oral evidence on the rising cost of motor insurance. Giving evidence with me
were Paul Evans, the CEO of Axa, Andrew Dismore, of the Access to Justice
Action Group, and a man who needs no introduction, the Rt Hon Jack Straw MP. I
was representing the Motor Accident Solicitors Society (MASS), of which I am
the vice chair.
This was the
second time I’d attended a select committee meeting. In November 2010, I gave
evidence before Louise Ellman MP, who is the chair of the Commons Transport
Select Committee. Then, as now, I found that the experience of engaging with
Parliament has its Kafkaesque moments.
As in the Czech
novelist’s great novel, The Trial – which sees Joseph K search fruitlessly for
justice, having been arrested for a reason that is never specified – the
splendour of the surroundings is inescapable. The Palace of Westminster, where
I gave evidence in 2010, is awe-inspiring, both in its sense of history and
architecture. Portcullis House, where yesterday’s hearing took place, is rather
less grand but still has an august flavour, perhaps because of its name: it is
so called after the chained portcullis used to symbolise the Houses of
Parliament on letterheads and official documents.
But for all the
grandeur, the business of actually appearing to give evidence isn’t easy. Last
year, it seemed as if I was asked to wait interminably outside an apparently
limitless number of doors, rather than ushered directly to the Committee. It
was only by dint of determination that I managed to find the room in the Palace
of Westminster in which the Committee was sitting. This year, the venue was
changed (from the Palace to Portcullis House) at the last minute – but no one
thought to tell me. It’s almost as if because everyone within Parliament knows
the drill, they forget to tell the rest of us.
Jack Straw,
indeed, is a man who knows Parliament like the back of his hand. Perhaps this
gave him the confidence to breeze into the hearing a few minutes after it had
started; certainly, I was in the midst of introducing myself when he arrived.
Attending a
hearing in the company of a heavy hitter such as Jack Straw means that one has
to be determined to be heard. Here, my previous Select Committee experience
stood me in good stead. I felt that I made MASS’s point: that unless the
Government tackles systemic failings within the personal injury industry, a ban
on referral fees alone may do more harm than good.
Moreover, albeit
that I have long campaigned for a ban on referral fees, I have also
consistently said that implementing the ban needs to be handled with great
care. Accordingly, a key component of any ban will be adequately defining what
a referral fee is, and consequently what it covers. For example, will the
Government include ancillary services which are also involved in personal
injury claims, such as car-hire companies, in the ban? There are also a
myriad of questions over advertising standards and data protection, with
unsolicited texts, cold calls and adverts which encourage litigation, being
used to the detriment of the public and the injured party alike. We also need
answers as to what the advent of Alternative Business Structures will do to the
personal injury system. Could a claims management company (CMC) or insurer take
over a law firm? Market rumour is indicating that a vast majority of CMCs have
expressed interest in doing just that when the time comes.
All these issues,
not to mention the practice by which insurers intercept claimants before they
have access to independent legal advice, need to be addressed. If they’re not
properly looked at, the culture of profiteering in the personal injury sector
will continue unabated – and accident victims will be no more likely to obtain
justice than Joseph K.
Wednesday, 5 October 2011
SMS spam is unwelcome and needs to be eradicated
Free Msg: Our records indicate that you may be entitled to £3750 for the accident you had. To apply free reply CLAIM to this message. To opt out text STOP
Far too many of us have received this text message, or something like it. It’s no more and no less than SMS spam, and it’s another example of the endemic dysfunction in personal injury (PI) claims. Let me explain.
Unsolicited text messages promising £3,750 – for some reason, the amount is almost always £3,750 – are sent because of the cavalier disregard for personal data by those who stand to gain by treating PI claims as a commodity. Often enough, these text messages are sent to consumers regardless of whether they’ve actually been in an accident. In fact, recent research from the Direct Marketing Association found that 43 percent of consumers reported receiving such messages.
That statistic strikes me as extraordinary, but to add insult to injury it is often the case the mobile phone users pay for the dubious privilege of receiving a spam text message. On top of that, there is usually a charge to send a text in reply saying ‘STOP’, and yet worse sending ‘STOP’ is unlikely to have the desired effect anyway – the spammers know they’ve got a real person, and so continue with their unwelcome barrage.
It is often difficult to determine exactly who has sent the message, and it is even more difficult to ascertain just how one’s personal data has come to the spammers’ attention. Granted, sometimes SMS spam is sent to mobile phone numbers which are randomly generated by software programmes, but on other occasions it appears on your phone because someone, somewhere, has sold your personal details without your consent.
The practice is abhorrent: SMS spam is being sent because claims management companies, lawyers with questionable motives and a myriad of other organisations which have no regard for the rights or welfare of the public are trying to drum up business. They amount to another shoddy practice in an industry which is in desperate need of reform.
At the same time, then, as it tackles referral fees in PI claims, the government should act to end the unauthorised sale of personal information. SMS spam is unethical and contributes to the rise of our unfortunate ‘compensation culture’. The government should act immediately to toughen its enforcement with steep penalties for non-compliance, but meantime, please read the guidelines below on how to deal with SMS spam from the Direct Marketing Association and endorsed by the Motor Accident Solicitors Society.
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