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MoJ backs Jackson's civil litigation reforms

They crux of this drive by the government is to save money for the public purse, by reducing the cost to public bodies in terms of compensation and legal costs paid. Part of that cost can or ought to be covered by insurance. As for legal aid, it is almost completely unavailable for use in personal injury claims, because of the 'No win no fee' regime brought in. Therefore, attacking or reducing the level of costs or the way in which they are dealt with will not affect the amount paid in legal aid. I have read somewhere that the annual cost to the government in costs and compensation is £350m - I am quite sure that amount is far outweighed by the VAT, corporation tax and personal tax revenue generated by the solicitors, costs practitioners (such as myself) and other parties that work in the personal injury field of the legal industry. The 'compensation culture' referred to is actually people who have been injured being compensated for their suffering, without losing out by paying some of their damages to their solicitors - why should they when it is somebody else's fault that they are injured in the first place? If these changes come in, one of the following will happen: people involved in lower value claims simply won't bother to make a claim because they can't afford it or because a solicitor won't take it on because the fees don't cover the work involved; or, it will be taken on but by unqualified paralegals who are not well trained enough to provide a quality service. The alternative is the contingency fee, where the solicitor gets a slice of the damages - that is what they do in America, but damages there are many times higher than in this country, because they are punitive as well as compensatory. If damages in the UK are raised to US levels, the cost of insurance will go up by far more than it currently needs to be to accommodate the cost of the existing system of compensation and legal costs.

19-Nov-2010

12:04 pm