NOT SO long ago I asked the Lord Chancellor's minister in the Commons, Geoff Hoon, one of my gentle questions. It was a written question so it did not have to be answered off the cuff. In line with the usual procedure, a draft answer was prepared by officials at the department and put to the minister for his consideration and approval before the official answer was sent to me.
I asked the minister what assessment he had made of the current availability of contingent and after the event insurance to cover conditional fee agreements (CFAs). Not a hugely difficult question. Not a hugely illuminating answer. It was as follows: "The discussions I and my officials have had with the insurance industry have clearly shown us that the provision of legal expenses insurance, both before the event and after the event, is diverse and considerable.
"Insurance aimed at conditional fee agreements is almost exclusively after the event insurance, and the principle providers of insurance to underpin conditional fee arrangements are well known. There is an increasing interest for [sic] insurance to underpin conditional fee agreements for proceeding other than personal injury cases. There are several well known products in relation to personal injury cases, including the product developed jointly with the Law Society. All the indications are that good cases have no difficulty in obtaining insurance and that the market is maturing with the experience of nearly three and a half years of operation. My officials keep in regular contact with the industry."
Well that's all right then. Or is it? Quite apart from revealing that the minister and his department have no detailed knowledge of the insurance position relating to CFAs – if they had they would have been enthusiastic in telling us every little detail – this answer tells us yet again that the lack of insurance products in the CFA market is still a major problem, but one which the Government will not face up to.
The insurance industry, with which the minister's officials are in regular contact, has been moving into this sector of the market with less than wholehearted enthusiasm. If there were profits to be made, insurers would have been in there like the proverbial rat up the drainpipe. But they have not.
So what does the Lord Chancellor's minister do about that? Redefine the word "insurance". He now says that while insurance against the contingency of losing the case is a vital part of CFAs, that does not necessarily mean that the client has to pay a premium for what we mere mortals used to call an insurance policy. The good old lawyers, fat and thin cats all, will self-insure. That is what trade union solicitors do. That is what firms in Ulster do. Yes, and the Lord Chancellor will go to bed before supper every night with his breeches on.
And even better, says Mr Hoon, insurance companies might even absorb these costs themselves with "only if you win" policies. If you win the case, you pay the premium out of your damages and if you lose you do not have to pay at all.
We need not have any worries about this. It is all going swimmingly. Mr Hoon is constantly being told, no doubt at these regular contact meetings with the industry, that more people are keen to get into the legal costs insurance market. Things are going really well.
I do not know who goes to these meetings. I do not know what "regular" means in this context. It presumably cannot be Abbey Legal Protection which is the source of Geoffrey's joy. Its chairman, James Innes, who knows a thing or two about the insurance market, has said that he does not know which insurers are giving Mr Hoon the impression that things are going well. He says that the "only if you win" premium idea is a non-starter, he would not "even entertain the idea". If he would not, what gives Mr Hoon the idea that others will?
Would the Lord Chancellor and his minister spend government money, let alone their own, on setting up this type of insurance scheme with a view to making a profit?
Perhaps I'll write Mr Hoon another question. I am sure he will tell me all I need to know.