Insurance lawyers rage against fees

THE Forum of Insurance Lawyers (Foil) has reacted with fury to the Lord Chancellor, Lord Irvine's announcement that success fees and insurance premiums will be recoverable by plaintiffs in conditional fee cases.

Foil president Martin Bruffell slated the move as “political expediency” and said the group had calculated it would cost the taxpayer “at least £150m” because insurance companies were likely to escalate premiums to claw back the cost.

Bruffell also branded plaintiff lawyers “fat cats” and said they charged higher success fees than necessary.

Lord Irvine confirmed the expectations of the legal profession when he made his announcement last week – on the eve of a massive lobbying campaign by Foil against the move. The provision will be included as part of the modernisation of justice Bill, which is due to be unveiled as part of the Queen's Speech this autumn.

Bruffell said Foil would challenge the proposal “all the way through Parliament” and would take it before the European Court of Human Rights if necessary. It has already fired off letters to every MP in the House of Commons and every lawyer in the House of Lords to campaign against the plan and intends to repeat the letters blitz in a fortnight.

Bruffell said making the defendant pay the success fee – which compensates the solicitor for the risk of losing – meant that the defendant was in effect paying for all cases the solicitor had lost. He compared the situation to a judge compensating prosecutors for innocent verdicts by increasing the sentence when a defendant was found guilty.

TUC chairman John Monks has joined Foil's protest against recoverable success fees and premiums. At a joint conference held by Foil and the Association of Personal Injury Lawyers (Apil) earlier this month, Monks claimed that to make success fees recoverable “would be tantamount to discouraging people from insuring themselves… by making it cheaper for them to ignore the risks until after the worst had happened”.

However, Apil staunchly defended Lord Irvine's proposals. Apil secretary Paul Balen said an ability to recover fees was “essential… in the absence of legal aid” to prevent victims from having damages reduced. He added that conditional fee cases allowed successful defendant insurance companies to recover costs, which they could not do when contesting legally aided cases.

See Analysis, page 17.