Justice secretary Kenneth Clarke recently announced that those victimised by domestic violence will not lose access to legal aid in order to provide no win no fee lawyers in civil cases they bring against civil partners.
The amendments being made to the legal aid bill, which has proven wildly unpopular because of how scaled back access to justice could be for those who need to rely upon no win no fee arrangements in order to bring personal injury claims against defendants, are ‘formidable’ ones, according to the justice secretary as he announced the concessions the government has agreed to in part. Clarke made an attempt to reach out to the bill’s opponents by lowering the threshold required for proving domestic violence had occurred as MPs continued to debate it after peers struck blow after blow against the measure.
Originally, the government would have male or female domestic violence victims resort to official channels in order to gain access to legal aid for divorce and other civil proceedings, though legal aid would still be made available for all restraining order cases. However, the justice secretary made the announcement that the government would be extending the definition of domestic violence allow victim refuges and GPs to provide evidence, while also extending the time period that domestic violence victims can claim legal aid from one year to two.
Clarke categorised the government’s response as quite generous due to its views concerning the importance of providing support to victims of domestic violence. Those who have been victimised over the past two years will likewise be given a blanket exception, an independent source from the ministry of justice added.
Some industry experts say that politicians may be seeking the easy way out in blaming no win no fee lawyers for social issues because it is easier to pass the blame than it is to accept it and work towards suitable solutions.
There is a long history of targeting personal injury lawyers for the nation’s legal woes, and many legal experts say that when ministers point the finger at legal professionals for creating a ‘compensation culture’ that is crippling the nation’s insurance providers through high legal costs associated with accident claims, they conveniently neglect to point out that insurers do much to bring about the situation as well. The truth of the matter is that many claimants would not be able to afford to take legal advice without no win no fee lawyers willing to forego payment until the case is successful, especially if the new legal aid bill working its way once more through the Commons emerges with its funding cuts intact.
Insurers, many legal experts say, are much more responsible for the current situation than is let on, as the practice of selling on the personal details of their customers to law firms, which these insurers euphemistically refer to as ‘charging referral fees,’ encourages the legal community to pursue policyholders that may have viable claims after being involved in traffic collisions through no fault of their own. The rationale of an insurance provider who participates in taking referral fees is that their customers are bringing suit against rival insurers, thus increasing costs for the competition, but seem to suffer from a lack of realisation that their rivals are doing the same thing back to them, leading to a vicious cycle that is more harmful than it is beneficial.
The prime minister has been urged once more to abandon the plans of his government for no win no fee legal agreement reforms by the parents of Madeleine McCann, according to recent reports.
In their first public political intervention, Kate and Gerry McCann have joined several high-profile tabloid newspaper victims and libel reform campaigners in order to warn David Cameron off from his plans to reform the conditional fee arrangements that no win no fee lawyers rely upon to provide individuals without deep pockets with access to justice.
The warning comes in the form of a letter, delivered in time before the House of Lords’ third reading of the new legal aid bill, a proposed piece of legislation that has seen its downfall nine times already through amendments made by peers. The McCanns are joined by other tabloid victims such as Christopher Jefferies, who prevailed against eight different newspapers stemming from libelous statements printed about him during the inquiry into Joanna Yeats, and marks the first time that Madeleine’s parents have come forward to make their concerns known about the legal reforms to injury claims proposed by the government.
The letter was co-ordinated by the Libel Reform Campaign and Hacked Off, an organisation that has campaigned for public inquiries to be made into phone hacking. Both groups have protested abut the proposed £350 million in cuts from the annual legal aid budget for the Ministry of Justice, claiming that a reconfiguration of conditional fee agreements will prevent claimants from being able to afford to employ lawyers, as the reforms will no longer provide for them to recover their lawyers’ success fees and expensive insurance premiums from losing defendants; winning claimants will instead see their damages awards reduced in order to pay for the legal fees and court costs.
No win no fee lawyers concerned over the reforms to the legal industry have been postponed until April of 2013, giving solicitors an additional six months of breathing room from the original October 2012 date.
While the Ministry of Justice is keen to limit no win no fee arrangements due to their view that the legal fees that accompany such awards are too much of a burden on defendants who are found liable during personal injury compensation cases, the MoJ announced the postponement recently in an effort to allow legal businesses and law firms more preparation time for the coming changes. The first part of the new reforms, which contains language pertaining to legal aid reforms, was already delayed by six months to the same April 2013 date in an announcement by the Government in December of 2011.
The second part of the bill includes language abolishing success fees and related legal costs from conditional fee arrangements. Instead of defendants bearing the burden, instead claimants will have to pay their lawyers directly out of their compensation awards.
Largely due to the recommendations made by Lord Justice Jackson in 2010, the Bill calls for reform to civil litigation costs in order to curb insurance premiums from rising across the industry. However, Lord Justice Jackson has taken issue with the decision by the Government to cut legal aid, stating that it was never his recommendation to do so.
The proposed legal aid cuts have been controversial ones, as many proponents of legal aid have protested in saying that the reforms could reduce or eliminate access to justice for those who need it the most, as they are unable to pay for expensive legal representation.
New rules under the Criminal Injuries Compensation Authority will end up limiting not just claimants with criminal records from pursuing accident claims but also otherwise law-abiding victims of this crime as well, experts say.
Those looking for personal injury compensation for broken noses or disfiguring burns would be barred from doing so under the new sliding scale from CICA, while claimants suffering minor brain injuries would see up to 25 per cent of their awards cut as well. The move, designed to curb the so-called ‘compensation culture’ that has arisen in the UK, purportedly from the advent of no win no fee lawyers, people suffering bruised ribs, broken toes, sprained ankles, and other minor injuries would no longer have a right to pursue compensation.
However, the new regulations mean that those left with ‘minor’ disfiguring injuries, such as from scarring or burns, would also be barred from seeking damages. Injuries such as burns or broken noses sustained by homeowners would not be paid out under the new rules, though any domestic abuse or instances of sexual assault will be exempt regardless of the severity of the injuries.
Those suffering more serious offences will also be affected by the new proposals, with victims seeing their rewards cut to £6,200 from £8,200 in the example of minor brain injury. However, no changes will be made to compensation awards paid out to life-threatening or highly serious injuries.
The new rules come on the heels of figures revealing that more than 20,000 offenders were given in excess of £75 million from CICA over the past decade.
No win no fee lawyers have paved the way for criminals to make personal injury claims for injuries sustained while committing crimes, with one MP stating that this practice must be stopped.
Due to ‘no win no fee’ conditional fee arrangements, criminals have made claims against the Government, resulting in a collective £5 million being claimed from the Criminal Injuries Compensation Authority for injuries suffered in prison or while committing offences. In the wake of this new information, Ken Clarke, Justice Secretary, has said that offenders will no longer be privy to this money, as he will work to have it re-directed to those victimised by these criminals instead.
Criminals often claim legal aid money in order to fund any court actions brought against prison authorities, with the current system awarding compensation to burglars who suffered an injury whilst fleeing the scene of a break-in. The system needs to be re-balanced with more weight on the side of the victim instead of the side of the criminal, said Tory backbencher Andrew Griffiths, who added that while legitimate claims for compensation should not be prevented, the system needs to be changed.
Mr Griffiths was also appalled to see criminals making claims under the Human Rights Act. Hardened criminals claiming their human rights were infringed by the Government were ‘ridiculous,’ Mr Griffiths also said, especially since many of these cases involve seeking damages for such things as prisoners being denied access to pornographic literature.
The MP also said that he was gladdened to see the Government is working to institute common sense back into the legal system with the Legal Aid bill currently working its way through Parliament.
A veritable hornet’s nest has been stirred by the news of a £500 accident claim for a teacher that had suffered injuries while restraining a pupil came with legal fees of more than £60,000, personal injury compensation experts recently reported.
Local authorities across the UK have been subject to work accident claims from teachers for injuries these teachers have sustained in the classroom. However, in many of these cases, the court costs that legal professionals run up in pursuing these claims can dwarf the final compensation awarded to the injured teacher.
Many have pointed to the massive legal fees as evidence of the so-called ‘compensation culture’ gripping the UK, while others put the blame squarely on the shoulders of no win no fee lawyers who speculate on compensation claims in order to generate the maximum amount of court costs they can.
Facing accusations that the practice has a ‘chilling effect’ on public services such as schools, ministers have been urged to clampdown on the behaviour through new legislation, especially in the face of research data indicating that £1.25 in legal fees was paid out to lawyers for every pound paid out to a claimant on average.
Other research found that approximately £6.7 million was paid out to teachers in 2010 for work accident claims. However, the £61,464 in legal costs paid out by North Lincolnshire Council on a £500 compensation claim has galvanised opposition to exorbitant legal fees.
Other local authorities have also paid out wildly disproportionate court costs, such as Merseyside’s Wirral Council, who faced legal fees of £14,300 for a compensation claim of £2,000 for a school staff member who suffered a stubbed toe. West Midlands’ Walsall Council also paid out £14,888 in legal fees on a £1,500 claim for a teacher who strained themselves following a fall.
Rising court costs may be preventing small and medium sized businesses from making personal injury compensation claims when they encounter issues, one expert consultancy firm recently reported.
Research findings by John Kennedy revealed that more than 50 per cent of firm owners reported that cost was the key factor preventing them from making business-related accident claims. However, 50 per cent of respondents stated that they had no idea that commercial litigation could be subject to no win no fee lawyers willing to work under conditional fee agreements, John Kennedy also found.
Such fee arrangements is a deal between clients and solicitors in which risk is shared between the two of them, as the legal professional will agree to either take their fees from the losing side in the event that the claimant prevails. However, solicitors need to carry out risk assessments, which can cost anywhere in the range of £750 to £2,000, in addition to other court costs for making claims.
City of London marketing and sales firm G4h’s company secretary, Colin Spiller, reported that he was prepared to write off ‘tens of thousands’ of pound s former client owned after failing to pay commission on several deals. However, he used John Kennedy to help him secure a conditional fee arrangement with a law firm, leading the client to settle, with Mr Spiller noting that while the settlement did not completely cover the costs of the law firm, they did split them down the middle with G4h.
Industry experts say that if more companies would avail themselves of conditional fee agreements, the spectre of looming failure due to the sluggish economy could be eased quite a bit.
The insurance industry, who has long since blamed rising premium prices on the so-called ‘compensation culture’ fostered by no win no fee accident claims, is under investigation by the Office of Fair Trading to determine the root causes of the issue.
Probing whether there is a lack of competition between major insurance providers, the OFT is leaving off their claims that no win no fee lawyers have been the driving force behind the 40 per cent increase in car insurance premium prices over the last 12 months. However, insurers are still crying foul over an increased number of car accident claims, stating that the increased costs of paying out on the rising number of claims is crippling them financially.
The consumer watchdog will instead be focusing its investigative efforts on the impact insurance comparison sites have had upon the marketplace. Some of these price comparison sites are actually owned by major insurers, such as Admiral Group-owned Confused.com.
The OFT will also be investigating what kinds of impact additional insurance products, such as the provision of replacement cars, approved repairers, how claims are dealt with, and legal protection on premiums, have had on the insurance marketplace. The results of the study will be collected and published this December.
Otto Thoresen, the Association of British Insurers’ director general, said he ‘welcomed’ the OFT’s probe, as it will give the industry in general another chance to showcase the kinds of pressures car insurance providers are facing in regards to costs. Mr Thoresen also said that the probe will further bring to light the steps the industry has undertaken to ensure their policyholders get the most complete and comprehensive cover they can.
Claimants who win their cases will now need to pay the success fees of their no win no fee lawyers
directly from their awarded compensation instead of the previous arrangement where the losing side was responsible for payment. The government’s decision to go ahead with the reforms comes even after the Ministry of Justice’s consultation paper in November 2010 received opposition from 70 per cent of respondents.
The government is also planning to implement several other measures which include increasing general damages by 10 per cent and a cap of 25 per cent on success fees deducted from compensation awards in accident claim
cases. An additional ‘qualified one way costs shifting’ system is also to be implemented which will prevent losing claimants from having to pay the legal costs of the defendant.
Insurers and claimant representatives maintain however that the abolition of success fee recoverability will only result in the restriction of access to justice and put the compensation awards of claimants at risk.
General liability insurers and defendant representatives have fallen on the other side of the issue, stating that the current regime results in disproportionate costs. One insurer pointed to statistical evidence stating that 2010 figures saw personal injury cases with claimant’s costs running 142 per cent of the amount of compensation actually received.
The MoJ published a response paper this week, stating that the reforms were a necessity in order to restore balance to the English and Welsh civil litigation system.
The paper stated that the new regulations will work towards deterring some weaker cases which are currently brought and that the entire measure package as a whole will aid in restoring much-needed fairness and proportion to the current state of personal injury claim compensation. This will be accomplished not by the denial of access to justice by through a restoration of a more fair balance throughout the system, added the paper.
Insurance providers have been divided over the government’s plans to reform no win no fee arrangements for claimants in personal injury compensation cases.