Insurers to cherry-pick low risk legal aid cases

LEGAL insurers are warning that many cases approved for legal aid funding will be too risky for them to take on under Access to Justice Bill proposals, effectively denying many people their day in court.

Under proposals laid out in the Bill, personal injury cases will not be eligible for legal aid and lawyers will have to fund cases through conditional fee agreements (CFAs). At present, both funding options are available.

As recently as last week, the Lord Chancellor stated that the legal insurance market was “developing well” and could “provide effective access to justice in this area”.

But legal insurers predict a slimming down of the number of cases receiving funding, rather than greater access to justice.

“There's no question about it. The insurers will be more selective,” says Christine Malkin, director of Amicus Legal.

Anthony Mowatt of Keystone Legal Benefits, meanwhile, likens potential cases to a big pie, part of which insurers will find unappetising. “One clump will be chucked in the bin and we will all be fighting over what's left,” he says.

Derri-Ann Clark of Saturn Professional Risks is more concise: “It's got to cut down access to justice for a number of people. There are occasions when you'd like to help someone but you can't take the risk.”

Michael Napier, co-author of the Law Society's Guide to Surviving Conditional Fees, agrees. He says insurers' statements bear out the Law Society's fears that poor people won't be able to afford justice.

“Having seen one gap closed [with the introduction of CFAs], the Government is planning to open another gap for the very people you would expect it to protect. At an absolute minimum, it should ensure legal aid is available for the start-up costs of a case so that a solicitor can investigate it and decide whether to go on with a no win-no fee deal.”

One leading insurer who does not share these concerns is Brian Raincock, managing director of Litigation Protection. He dismisses other insurers as lacking experience. Raincock expects the number of cases taken under CFAs will be about the same as those funded by the Legal Aid Board.