Brian Raincock says the insurance industry has the opportunity to improve access to justice.
Access to justice is vital to a truly democratic society. How disappointing it is then that the Lord Chancellor has met with such resistance to measures which will, without an increase in public expenditure, make access to justice for the vast majority of the population a reality.
Conditional fee agreements (CFAs), of which insurance is an essential ingredient, were introduced in July 1995. The aim was to extend them if the initial period was successful. Successful it was, and through policies issued by Litigation Protection and the Accident Line scheme more than 30,000 individuals have brought cases which previously would have been too expensive or too risky.
Solicitors and barristers have been rewarded as well, receiving not only their normal fee but a 'success uplift' which can be up to 100 per cent (although the average is 43 per cent).
What then is the problem in extending the principle to other areas of litigation? The simple answer is none. The legal aid gravy train pays lawyers fees in all medical negligence cases where the success rate is only 17 per cent. In 83 per cent of such cases the plaintiffs receive less than £50, if anything at all, and the average contribution they will have made under legal aid is about £450.
Does this make sense? Is this good use of public funds? Of course not, and yet the Law Society is fighting a vigorous campaign to frustrate the Lord Chancellor's objective, which is so clearly in the public interest.
Insurance is key to the development of CFAs. How is the industry responding? Put simply, with alacrity and, after an initially diffident period, with cohesion and confidence. At the forefront is the Association of British Insurers (ABI) which has brought insurers and expert intermediaries together to present an industry response.
This led to a meeting with the Lord Chancellor where he was assured that insurance would be available and that premiums would be affordable.
Out of this meeting came the creation of the Lord Chancellor's Department/ABI working party. Its aim is to identify areas of difficulty, for example, champerty and maintenance or the status of premiums in the costs of litigation.
The Lord Chancellor has identified the problem of affordability as an issue where the banking industry may be able to help. At the next meeting it is hoped to extend an initiative to representatives of the Bank of England or the British Bankers Association.
Good progress so far. This chance for the UK insurance industry to improve access to justice should not be missed.