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Rob Marris (Wolverhampton South West) (Lab)
I beg to move,
That this House has considered access to justice.
It is a pleasure to appear in front of you, Mr Davies. I thank all those who sent in briefings and background information, which have been most helpful. I especially thank the law firm where I was a partner for several years, Thompsons. In fact, two other Members who are Thompsons alumni are with us today. Thompsons supported my campaign for re-election 18 months ago financially. I also thank the Law Society of England and Wales, of which I have been a member for three decades or more, and the Association of British Insurers.
Access to justice is a pillar of the welfare state. To me, it is no coincidence that in 1948, the legal aid system in England and Wales was introduced—the same year as the introduction of national insurance and the national health service. It is one leg of a three-legged stool called the welfare state. This afternoon, I will not have time to cover as much information and as many matters as I would like. I hope to run around the block on the small claims limit for personal injuries, soft tissue injuries and whiplash claims, and to touch on employment tribunal fees, legal aid deserts and court closures.
I will start with the small claims limit. In recent years, other jurisdictions with similar systems to ours have looked at raising their small claims limit. In Scotland, the small claims limit was raised in 2007, but all personal injury claims were specifically excluded from that, as colleagues from the Scottish National party who are here today will know. They were excluded principally on the grounds of complexity, because of the need for those claiming for a personal injury to instruct solicitors to obtain expert medical evidence and, quite often, other expert evidence—for example, from an engineer.
When the Scottish system was reformed in 2014, personal injury was still treated differently. In 2014, a new procedure was introduced in Scotland called, simply, the simple procedure, to replace small claims and summary causes for cases with a value of less than £5,000. However, most personal injury claims, while proceeding under simple procedure, have special rules. Employers’ liability claims, where someone is injured at work, are entirely excluded from simple procedure.
Whether to raise the small claims limit has been looked at repeatedly in England and Wales. For example, in 2009 Lord Justice Jackson recommended in his report that the limit be retained at £1,000 for small claims relating to personal injury, with a fast-track system. Looking back on that in 2016, he said:
“The fixed costs regime for fast track personal injury cases is working reasonably well.”
I appreciate that people could say he is biased: he suggested one course of action, which was followed, and then seven years later said it was working well.
However, in July 2016, less than a year ago, Lord Justice Briggs in the final report of his civil courts structure review concluded that
“a fixed or budgeted recoverable costs regime, backed by Qualified One-way Costs Shifting…plus uplifted damages has, in the sphere of personal injury (including clinical negligence) litigation been a powerful promoter of access to justice, in an area where the playing field is at first sight sharply tilted against the individual claimant, facing a sophisticated insurance company as the real (even if not nominal) defendant.”
That sets the scene, because there is an asymmetry between many victims who are claiming that they were injured as a result of someone else’s negligence and the effective body against whom they are claiming. For example, following a car accident between two individual drivers, the victim will be claiming against the other driver. That is often an individual, but behind that driver sits the insurance company, which will run the claim and has to do so under the compulsory policy of insurance that all drivers have to take out.
Graham Stringer (Blackley and Broughton) (Lab)
My hon. Friend is doing a great service to the House of Commons by bringing this issue before it. He is beginning to make the case that access to justice is fundamental to the welfare state. In one sense, he underestimates its importance. Does he agree that it is fundamental to democracy? A democracy relies on freedom of speech, freedom of the press, the right to vote and access to justice. If there is not the money for access to justice, we do not have the rule of law.
Rob Marris
I entirely agree. It is little use having rights if one cannot afford to enforce them. That entrenches inequality.
The consultation came out under the rubric of whiplash. I have to say to the Minister that the consultation somewhat sneakily was announced on 17 November and closed on 6 January. That is a short consultation period over Christmas, which is not helpful.
The Government’s own figures on the whiplash proposals, which may well be a gross underestimate, suggest that if implemented, they will see the NHS lose at least £9 million a year and the Treasury lose £135 million a year. But here is the stinger: insurance companies will get at least £200 million more per year. That is likely to be an underestimate. That figure is due to a methodology that is biased towards insurance companies and has been severely questioned by the Association of Personal Injury Lawyers, of which I think I used to be a member.
The methodology for who gains and who loses under the proposals counts as a gain the extra moneys that insurance companies will get but does not take into account the loss to solicitors. We can all weep crocodile tears about solicitors, but when talking about commercial arrangements, if we are looking at them dispassionately, we have to weigh in the balance where one commercial sector gains and another loses.
Chris Philp (Croydon South) (Con)
Will the hon. Gentleman join me in welcoming the UK’s largest insurance company’s commitment to pass on in full any savings realised to consumers? That means, I hope, that the transfer of value, if it occurs, is from the personal injury law community to everyday consumers.
Rob Marris
I will get on to that. It is interesting and a great declaration, but of course other changes in the past five years or so have led to an increase in insurance company savings of £8 billion in claims costs. That has not been passed on in terms of reduced premiums, which have continued to go up, so I will believe it when I see it. The Government’s own calculations suggest that at least 90% of the money has to be passed through—the term for returning money to policy holders—for there to be any benefit at all.
The Minister for Courts and Justice (Sir Oliver Heald)
As the hon. Gentleman will know, the small claims limit is being put up in all the other jurisdictions, apart from this one, to £10,000. Is it really right that motorists should each pay £40 a year extra, simply so that the sort of solicitors firms he referred to can continue to do work on these very small claims?
Rob Marris
The limit has not gone up in Scotland for personal injury claims. I will get on to the figure of £40 a year and whether it is accurate or not.
So much of this information comes from the insurance companies, which are making huge profits. Premiums have gone up 17.2% in the past year, which I regard as unacceptable. I asked the Association of British Insurers about that on 3 January, and it kindly replied a week later. I am not a statistician, but I have knocked around statistics a lot, and its approach is strange, to say the least. It says:
“Given there is no objective medical evidence for whiplash type injuries, with diagnosis often being made on the basis of the claimant’s word, the ability to prove beyond all reasonable doubt that the claimant has not sustained an injury is both incredibly challenging and expensive.”
That is typically misleading of the Association of British Insurers. The Minister will know, as a distinguished lawyer, that if the insurers refuse to pay out on a claim and the policy holder says the insurers are wrong, the policy holder makes a claim in the civil courts against his insurers, where the test is not about proving something beyond reasonable doubt, but based on the balance of probabilities, which is a much easier test to pass. So that is a straw man, but it is true in terms of criminal actions.
The ABI also states that
“actual criminal convictions clearly only represent the tip of the iceberg, and are not in any way a true reflection of the level of fraud that insurers and wider society face on a daily basis… While some of those cases may have an innocent explanation, many more cases of successful fraud go undetected, especially for whiplash.”
The ABI is assuming what it is trying to prove. It is assuming that there is fraud, but it admits that if there are such cases, they are going undetected. We do not know whether there are undetected cases of fraud or there never was a case of fraud. If it assumes what it is trying to prove, I certainly hope my insurance premiums are not set by insurance company actuaries who take such an approach.
Sir Oliver Heald
That is all very well and good, but the hon. Gentleman must know that the number of road claims has gone up from 460,000 in 2005-06 to 770,000 in 2015-16, and that 90% of them are for whiplash at a time when our roads are getting safer and our cars have seen huge road safety improvements in their manufacture. How can this be?
Rob Marris
It cannot be because the Minister has the figures wrong. The Government’s compensation recovery unit indeed talks of 771,000 claims in round terms, of which 441,000 are for whiplash. That figure has come down by 7% since 2011-12. The overall figure is already coming down, so it is not going in the direction the Minister thinks it is and perhaps he will rethink the proposals.
The ABI says that its statistics
“are therefore intended to provide an indication of the volume and value of fraud detected by the industry. These statistics do not include claims which involve exaggerated personal injury, particularly for whiplash, where the claim has been paid.”
However, it also says that insurers pay out on 99% of claims, so apparently we are talking about the 1% and that is what all these assumptions are based on. That is not a good basis for creating public policy.
Chris Philp
Does the hon. Gentleman agree that the qualified, one-way costs-shifting arrangements that were introduced three or four years ago, whereby the defendant bears their own costs, even if they are successful, creates a perverse incentive for insurance companies to settle claims even when they have a very good prospect of defending them?
Rob Marris
That regime was introduced as part of other changes which have led to £8 billion more for the insurance companies. One must look at the matter in the round.
The ABI says:
“Previous reforms aimed at tackling the compensation culture have not had the desired effect because claims frequency has not been addressed. As such, the removal of general damages for minor soft tissue injuries is by far the most effective way to address claims frequency.”
What sort of minor injuries are we talking about? The Law Society helpfully provided me with some examples from a public briefing:
“A fractured rib (up to £3,300)”—
that is well below the £5,000—
“Food poisoning symptoms continuing for weeks (up to £3,300)”—
Rob Marris
No, I will not. The Law Society continued:
“Neck injuries lasting”
for up to
“12 months (Maximum £3,630)… Back injury lasting up to 3 months (up to £2,050)… Minor wrist fracture (£3,960 maximum)”.
I would venture that such injuries would not seem minor to most of our constituents. Most of them would not say a broken wrist was minor. [Interruption.] Well, they certainly would not in a Labour constituency; perhaps they would in Conservative constituencies. [Interruption.] The Minister is chuntering, “It’s not whiplash”; part of the problem is that the proposals in the consultation paper do not cover just whiplash, with which, I have said, there is not a problem. They cover all personal injuries, including accidents at work. Someone who breaks their wrist at work would not be able to instruct a solicitor, but they would almost certainly have to get a medical report and so on. I just do not think that these are what most of my constituents would call minor soft tissue injuries.
That is one reason why the Law Society has come out against the proposals, saying that:
“the government does not appear to have a robust evidential basis for undertaking the reform”.
So, too, has Cycling UK—it used to be the CTC or the Cyclists’ Tourist Club—which says:
“This change doesn’t target whiplash claims or claimants: it impacts most on those who end up in casualty with broken limbs due to the negligence of others.”
It talks about
“A reform which denies”
the injured
“justice, and sends a message to motorised road users that vulnerable road users’ injuries are a trifling matter”.
The Government have said in their propaganda that most road users have legal expenses insurance as part of their car insurance policy—I do not—so they will be able to get legal representation under that policy. That may be true for many if not most car drivers, but most of us cyclists do not have such insurance, nor do most pedestrians. That is why Cycling UK and its partners—RoadPeace, a national charity for victims, and Living Streets, a national charity for everyday walking—have come out against these changes.
Rob Marris
No, I will not. I have already given way to the hon. Gentleman. I was going to talk about employment tribunal fees, but I have taken up quite some time, and some of my colleagues wish to talk about that. Of course, employment tribunal fees have dissuaded huge numbers of people from bringing employment claims. If the Government really think that 67% of previous claims were frivolous—that is how much the figure has dropped by—they are living in a different world from me. Again, the Law Society, which of course has a vested interest, is against those fees. It said:
“In our members’ experience the remission system”—
for remission of fees for those who cannot afford to pay tribunal fees—
“is confusing, uses complicated language, and is hard to navigate”,
and that is for Law Society members, who are solicitors, let alone the lay person who may have just lost their job and perforce be broke. Only 21% of claimants—far fewer than the Ministry of Justice predicted—have benefited from any fee remission at all. Early conciliation was put forward as another approach, but ACAS says that 70% of claimants who entered into early conciliation did not reach a formal settlement.
Mr Jim Cunningham (Coventry South) (Lab)
I congratulate my hon. Friend on bringing forward this debate. There is another dimension to tribunals and legal aid in general. Many people come to us, although we are not allowed to give legal advice, because they cannot afford to pay for it. Secondly, citizens advice bureaux and bodies such as the Coventry Law Centre are overloaded with work, because the Government have cut the grants to those organisations, and as a result, they have had to reduce staff. There is an endless vicious circle when people try to get justice in this country.
Rob Marris
My hon. Friend is quite right. It is a matter of playing catch-up following the changes to legal aid. There are now legal aid deserts. Recent figures from the Legal Aid Agency show that large areas of England and Wales have little or no provision for legal aid services for housing. That is rather ironic on a day when the Homelessness Reduction Bill, introduced by the hon. Member for Harrow East (Bob Blackman), is being debated. In the south-west, over half of areas have only one provider of legal aid for housing advice. In Wales, half of areas have only one provider. In the west midlands, where my hon. Friend the Member for Coventry South (Mr Cunningham), who just intervened, and I come from, over half of areas have one or no provider. Shropshire, which is not far from my constituency, has no provider. When there is one provider, families on low incomes often cannot afford to travel to see them.
My hon. Friend the Member for Coventry South adverted to the fact that we have a catch-up system, because there are cuts in the number of courts. In Shropshire, people cannot get to Shrewsbury Crown court for a hearing at 9.30 in the morning by public transport from Ludlow, another major population centre. Cases are collapsing as a result; witnesses will not travel, and people are pleading guilty because they do not want to take even more time off work. That is not justice.
Mr Cunningham
Solicitors in Coventry and Warwickshire are looking at the possibility of getting local law students at the University of Warwick to assist with some cases.
Rob Marris
Indeed—that is, when they can get to a court, because there are plans to close 86 courts and tribunal centres and to cut Ministry of Justice staff by between 5,000 and 6,000. That has led to the courts getting clogged up with litigants in person who cannot afford to pay for legal representation. Judges, quite properly, try to assist litigants in person and to be flexible, so cases take longer. The Government end up with a false saving, because we spend more on the remaining courts to deal with litigants in person, and we have a worse justice system with less access to justice.
Ian C. Lucas (Wrexham) (Lab)
Is that not particularly acute in family law cases, and difficult cases relating to children and finance, when litigants in person appear before district judges, who have problems resolving the cases?
Rob Marris
My hon. Friend is entirely right and anticipates what I am going to say. There is, as he will know as a distinguished lawyer, an exceptional case fund, which was established to help people such as survivors of domestic violence to get free legal assistance. The Independent, which admittedly is a newspaper and not the Ministry of Justice, reported in 2015 that from April to December 2013 there were 617 applications to the exceptional case fund—that will be for all of England and Wales—and eight were successful. In the three-month period from April to June 2015, five out of 125 applications were successful. The people applying are some of the most disadvantaged in society and face some of the most grievous personal circumstances.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Legal aid has been eroded particularly, perhaps, for victims of domestic abuse, and many now have to present their cases in the family court. Regardless of recently announced Government proposals in relation to abuse of process, surely domestic abuse victims must have their own lawyers in family courts to avoid abuse by proxy.
Rob Marris
I will reply to the hon. Lady first. I agree entirely with her. I will give way to the right hon. and learned Gentleman, as the Minister, but I will just say that the Ministry of Justice anticipated between 5,000 and 7,000 applications annually. The actual figures are far lower than that. One reason—perhaps the Minister, when he intervenes, can promise to do something about this—is that, understandably, many solicitors are unwilling to make applications to the ECF because it is so bureaucratic, even though this Government say that they do not like bureaucracy; it takes between six and 10 hours just to make the application. The cuts have had far-reaching negative implications for children and vulnerable young people as well.
Sir Oliver Heald
I was just going to ask whether the hon. Gentleman agrees that domestic violence cases are within scope, and that a victim would have legal aid in the way that I outline. As for the exceptional cases fund, which the hon. Gentleman has challenged me to say something about, 1,200 cases a year is the current rate, and 53% are being granted; that is the latest.
Rob Marris
That is helpful, but it kind of makes my point for me. The right hon. and learned Gentleman’s own Ministry—before he was there, I have to say—anticipated between 5,000 and 6,000 such applications. A 53% success rate seems to me, on the face of it, to mean very stringent criteria, given how long a solicitor will spend preparing the application—and they will not get paid for that preparation, which suggests that the solicitor making the application on behalf of the vulnerable individual thinks that there is a very good chance of success. But what do they find? It is about half.
In time-honoured tradition, I will ask the Minister some questions, which I hope he will be able to answer. I did give him some notice of them, but only at noon today, so although he is a hard-working Minister, he may not have had the chance to get on top of them all. On small claims, does the Minister accept that there will not be a level playing field if the proposed changes are introduced, because they will remove funding currently available for injured people to instruct lawyers, leaving them having to act as litigants in person on personal injury small claims?
Does the Minister seriously contend that there is a fraud crisis in relation to workplace injury claims, which the proposed changes would cover, and if he does, which he may, what independent evidence, not from the insurance industry, does he have of such a crisis?
The impact assessment for the proposals says that there will be a cost to the NHS of at least £13 million a year and to the Treasury of at least £135 million a year, and an increase in insurance company profits of £200 million a year. Does the Minister accept that that means that the Treasury will lose out while the insurance industry gains? If he does not accept that, perhaps he could explain why.
Can the Minister say by what date the Department will publish its review of the impact of employment tribunal fees, and what data the Department has on how such fees have affected the use of alternative dispute resolution services? What steps will the Government take to try to ensure that all children and vulnerable young people can get legal aid? The Minister has already mentioned some changes in that regard. Following on from that, will he give a commitment to review the exceptional cases funding system to make it much more accessible, and if he will not, can he explain why not?
Several hon. Members rose—
Geraint Davies (in the Chair)
Order. I think that we have five Back-Bench speakers, as well as the Front Benchers, so I will impose an immediate time limit of six minutes on speeches.
Chris Philp (Croydon South) (Con)
It is a pleasure to serve under your chairmanship, Mr Davies, particularly given your previous association with Croydon.
I would like to talk specifically about the Government’s consultation on whiplash claims, and the reason for that is an experience that I had two or three years ago. After a very minor road traffic accident in which no one was injured, I was bombarded with phone calls to my personal mobile every week for about a year from a claims management company. It explicitly asked me to pretend to have an injury that did not exist in order to claim compensation.
I have no issue with the more general points that the hon. Member for Wolverhampton South West (Rob Marris) makes about access to justice and the court system. I am talking specifically about whiplash. It is as a result of practices such as the one that I have described that this country has more than two times more whiplash claims than the rest of Europe, and the total number of claims for soft tissue injuries— whiplash and neck and back—has been static, at about 800,000, for the last few years.
One reason for that is the perverse incentives in the system. As I mentioned in an intervention, under qualified one-way costs shifting, when a claim is made, even if the defendant—the insurance company—is successful in defending the claim, it must bear its own costs, which are quite often up to £10,000, so it is easier for the insurance company to stump up £3,000 in insurance and pay some costs to the prosecuting or claiming solicitors firms—some of those costs go to the claims management company—than to dispute the claim. That is why claims here have grown to proportions that are vastly higher than obtain in the rest of Europe and why, as my right hon. and learned Friend the Minister said, at a time when accidents have declined by 30%, claims have gone up by 50%.
In The Sunday Times a year or so ago, there was a shocking report about a company called Complete Claim Solutions—one of the most notorious CMCs, which makes 7 million outbound cold calls a year. Its trainers were covertly recorded by The Sunday Times encouraging or telling—instructing—its staff to get the public basically to lie and make fraudulent claims. I have myself been on the receiving end of those phone calls.
On the point made by the hon. Member for Wolverhampton South West about broken bones, I have looked at the consultation document, and it specifically refers to soft tissue claims. I fully accept that where a cyclist or motorist has broken a rib, wrist or leg, their claim is perfectly valid and verifiable and should be allowed to proceed. We are talking about soft tissue injuries, where there is no objective medical evidence other than the claimant’s own claim. Those claims add, I believe, about £40 to everyone’s motor insurance policy, but more worryingly in my view, they are morally corrosive because large numbers of the public are being incited to commit fraud. That is a bad thing for the fabric of our society.
Rob Marris
The Government’s press release announcing the consultation on 17 November said that measures include
“raising the limit for cases in the small claims court for all personal injury claims from £1,000 to £5,000”.
It said nothing about soft tissue injuries.
Chris Philp
Well, certainly the consultation document refers on its front page to soft tissue injuries. I am sure that the Minister will consider how that might apply to broken bones, but the title of the consultation refers to soft tissue injuries only.
In my response to the Ministry of Justice consultation, I made a number of proposals, several of which I would like to elaborate on here. I believe that there should be a blanket ban on outbound cold calls in relation to soft tissue injuries. There should be a ban on pre-medical offers. Insurance companies should be required to conduct face-to-face medical examinations, and those examinations should produce independently verifiable evidence. That should be more than just someone saying, “My neck hurts.” The injury should be capable of verification by a third party, so in the case of a broken bone, that would clearly involve an X-ray.
I believe that there should be a ban on general damages for minor soft tissue injuries—not broken bones, but minor soft tissue injuries, where there is no evidence of the kind to which I have just referred. For those injuries, I fully support a threshold of £5,000.
There should also be a duty on claims management companies and solicitors to explain explicitly to prospective claimants that fabricating evidence is an unlawful act. They currently do the reverse; they actually encourage false claims. The Ministry should look again at qualified one-way costs shifting, because it creates a very perverse incentive for insurance companies to settle even when they could win a case in court.
On the point raised by the hon. Member for Wolverhampton South West about where the money ends up, I think that the saving could be more like a billion pounds a year, not £200 million. I would expect that to be passed on to ordinary members of the public and not pocketed by insurance companies. Aviva has committed to do that, but if, after a year, it turns out that the insurance companies have simply pocketed the extra money and not passed it on, I would expect the Competition and Markets Authority to be encouraged by the Government—or even required, if the Government have that power—to conduct an investigation to make sure that those savings are passed on to the hon. Gentleman’s constituents and mine. I do not expect these savings to end up in the back pockets of the insurance industry.
I would also like to see another practice ended. Again, this is a point for the insurance industry. A few years ago, there was a ban on referral fees, which is money that a claims management company would pay an insurance company to hand over the details of somebody who had been involved in a motor traffic accident. They are circumventing that ban through what they call alternative business structures. That is where the insurance company has some form of equity or profit share stake in a claims management company, the details still get passed on, and the insurance company effectively gets paid via the equity stake as a means of circumventing the referral fee ban. That is clearly an abuse and we should take steps to end it.
Finally, there are many examples of insurance companies procuring services such as car hire, legal services or vehicle repair services very cheaply, and they get recharged to the at-fault party’s insurance company at a significantly marked-up price. That is profiteering and, again, steps should be taken to prevent it happening.
In summary, I very strongly support the measures proposed in relation to soft tissue injuries. They will end a whole cottage industry that is morally corrosive because it is encouraging huge numbers of people to commit fraud, and costing our constituents £40 each per year, per car insurance policy. I welcome these proposals. I hope to see them brought on to the statute book at the earliest opportunity, and look forward to supporting them on the Floor of the House when that happens.
Justin Madders (Ellesmere Port and Neston) (Lab)
It is a pleasure to serve under your chairmanship, Mr Davies. First, I congratulate my hon. Friend the Member for Wolverhampton South West (Rob Marris) on calling this incredibly important debate. Although it is a broad debate, I will focus on an area that I have spoken about many times before and sadly find myself having to speak about again—one that, as a former employment lawyer, I know well: the devastating impact that the introduction of employment tribunal fees has had on access to justice.
I will not repeat the entire history of this issue—the Minister knows the landscape well—but I will summarise. In July 2013, for the first time a person had to pay a fee before they could proceed with an employment tribunal claim—two fees, in fact: one at the commencement of the claim and one before the final hearing. Following the introduction of fees, the number of single employment tribunal claims plummeted by 67%, from an average of 13,500 per quarter to just 4,400 per quarter. One of the oft-cited reasons for the introduction of fees was that it would deter vexatious and weak claims, yet the proportion of unsuccessful claims has remained stable. It is therefore clear that all that the fees system has done is deter people who have valid claims from upholding their rights. That conclusion is shared by the cross-party Select Committee on Justice and a range of specialist organisations that submitted evidence to it, including Citizens Advice, Maternity Action and the Bar Council.
The Justice Committee reported that many judges say that they now hear no money claims at all. The report says:
“Prior to the introduction of fees money claims were often brought by low paid workers in sectors such as care, security, hospitality or cleaning and the sums at stake were small in litigation terms but significant to the individual involved. There are few defences to such claims and they often succeeded.”
Have all those employers suddenly changed their behaviour and is everyone now getting paid correctly? No. What is far more likely is that those whose wages are being docked are simply saying, “Well, it will cost me more to go to a tribunal to recover this money than the amount I have lost, so I can’t afford to take that risk.” That, to quote the Prime Minister from just a few days ago, is an example of the
“everyday injustices that ordinary working class families feel are too often overlooked.”
Sir Oliver Heald
Is the hon. Gentleman not forgetting the other measure that was taken, which was to require claimants to go to ACAS? Is he not aware that the number of cases going to ACAS has gone up from 23,000 a year to 92,000 a year, and that the effect has been that about half of the cases have been resolved or dealt with in a way that meant they no longer need to go to the tribunal—so 45,000 cases are dealt with for free?
Justin Madders
The Minister presents those statistics but forgets to mention that the arbitration system with ACAS was actually introduced some time after employment tribunal fees were introduced, so it does not explain the initial drop-off. The Justice Committee said the claim that this has diverted more people to mediation was
“even on the most favourable construction, superficial.”
It is true that there has been an increase in the number of cases going to conciliation, but just 16% have been formally settled by ACAS, 19% proceeded to a tribunal case and 65% were neither settled nor proceeded to a tribunal. What has happened to all those cases?
Despite the overwhelming evidence, the Government refuse to acknowledge the problem, as we have just heard. Last month, I challenged the Under-Secretary of State for Women and Equalities over the outrageous fact that only 1% of women discriminated against at work brought a claim to tribunal. I asked whether she would make representations to the Ministry of Justice about the raft of evidence suggesting that tribunal fees deter genuine complaints. The reply I got was:
“There is no doubt that the number of tribunals has gone down, but in actual fact there is good news here”.—[Official Report, 8 December 2016; Vol. 618, c. 363.]
I fail to see what that good news is.
Perhaps the Government’s own internal review will tell us what has happened to the many complaints that have disappeared through ACAS, if they ever decide to release it. It was commissioned in July 2015; the review was completed within a few months, and it has been gathering dust for over a year now.
Sir Oliver Heald
On a point of order, Mr Davies. The hon. Gentleman is putting forward as an assertion of fact something that is completely incorrect. Is that in order?
Geraint Davies (in the Chair)
It is in order, because it is a matter of debate. Back to you, Justin Madders.
Justin Madders
I am only referring to what the previous Minister for Justice said in evidence to the Select Committee about the report being completed, but if I am wrong about that, that is fine. What we are more interested in is the Government actually releasing it. I hope that when the Minister responds he will confirm a final date for when we will see the Government’s own internal review.
Mr Davies, your rights are only as good as your ability to exercise them. Be in no doubt that every year now, thousands of people are unable to do this. Employment rights are not just about dignity and respect in the workplace. They bring important social and economic benefits to this country. They ensure that more people can participate in the labour market without facing unfair discrimination. They give vulnerable workers more job security and stability of income. They help to encourage a committed and engaged workforce and the retention of skilled workers. They allow people to plan their life, plan for a future, knowing that if they do a good job, if their employer runs its business well, they are likely to stay in work.
What we have instead is a hire-and-fire culture where workers are seen as disposable commodities—figures on a spreadsheet—rather than real people with real lives who matter. For most people in the UK, the concept of secure employment no longer exists. Even for those who are lucky enough to avoid the pervasive traps of zero-hours contracts, agency work, bogus self-employment and the gig economy, workplace protections are now so watered down they are virtually worthless. During the referendum campaign, we saw that telling someone on a zero-hours contract or in agency work that there is a risk to their job from Brexit was futile. Until we begin to address these issues and reinstate the concept of secure employment, we will stand no chance of rebuilding our fractured society.
At the moment, we have a system where justice exists only for those who can afford it. A banker on a six-figure salary who is unfairly dismissed can still take their employer to a tribunal, while a factory worker on the minimum wage is much less likely to have the option and ability to uphold their rights. This situation is an embarrassment; it is an injustice and it must come to an end.
I will conclude with another quote from the Prime Minister, who said only three days ago:
“when you try to raise your concerns but they fall on deaf ears; when you feel locked out of the political and social discourse and feel no one is on your side, resentments grow”.
She also said that
“it is the job of government…to correct the injustice and unfairness that divides us wherever it is found.”
I say that it is time that those words were put into action.
Craig Tracey (North Warwickshire) (Con)
It is a pleasure to serve under your chairmanship, Mr Davies. I will speak about reforming the soft tissue claims process. I have a special interest in the subject: I am chairman of the all-party group on insurance and financial services, and I spent 25 years as an insurance broker, 20 of those running my own business, so it is fair to say I have seen the evolution of these claims. When I first started in the industry, whiplash or soft tissue injury claims were non-existent, but over time they have grown to be a significant industry which, as we have heard, costs motorists anywhere between £40 and £90 extra on their policy. Critically, it is an industry where in many instances the claimant is not the main beneficiary.
Although the amounts of compensation paid out in soft tissue claims are relatively small, the associated claims handling costs, including the costs of investigation, processing, lawyers’ fees and medical reports, are disproportionately large. For example, a claimant claiming about £1,000 may ultimately cost the insurer two or three times that amount. As such claims are pretty common—there are about 800,000 a year—the effect on motor insurance premiums is significant.
I will focus on two key areas of the reform proposals, the first of which is general damages. It is clear that the reforms in the Legal Aid, Sentencing and Punishment of Offenders Act 2012 have not had the desired effect of tackling the compensation culture. They went some way to tackling issues such as referral fees, but frequency of claims has not been tackled as claimants can still enter into a no win, no fee agreement and a substantial portion of their claim is taken by the lawyer or claims management company to cover legal fees, so claimants sometimes get only half of the amount awarded to them. Is it access to justice when somebody else benefits more than the person who was injured in the first place?
To highlight the scale, although it is fair to say that the number of claims described as whiplash registered with the DWP’s compensation recovery unit has decreased, as mentioned by the hon. Member for Wolverhampton South West (Rob Marris), that is coupled with a corresponding dramatic increase in the number of soft tissue injury claims for neck and back injuries. In 2015-16, the number of road traffic accident soft tissue injury claims rose by 5.8% from the pre-LASPO level of 2012-13. However, in the period before LASPO was introduced, there was a particularly high volume of claims as claimant lawyers rushed to submit claims to avoid the reforms. This can be seen when looking at the total number of soft tissue injury claims in 2013-14, with the total number of claims in 2015-16 decreasing by only 0.3% over the previous two years, and in fact increasing by 1.2% from the previous year.
The claims portal, which is used to process low value personal injury claims in road traffic accidents, demonstrates even more clearly the rising number of claims following the LASPO reforms. On the portal, although the number of claims notified decreased by 3% from the pre-LASPO high in 2012-13 to 2015-16, the number of claims notified actually increased by 11% in the two-year period of 2013-14 and 2015-16. It highlights how the number of people claiming whiplash injuries in 2011-12 was 543,899 and the number of people who had neck, back and soft tissue injuries in the same period was 285,000. The number of people claiming neck, back and soft tissue injuries increased to 441,000 in the period 2015-16, so we can see it has been displaced.
My second point relates to the small claims track. The threshold needs to increase for whiplash, as the current limit has not been increased for 25 years. Figures from the ABI show that in 1991 50% of claims would have been valued within the SCT limit. That dropped to 9% in 2012, which highlights that an increase is well overdue as 91% of pain, suffering and loss of amenity claims now fall outside its remit, which cannot be in the best interests of the consumer.
From my discussions with the insurance industry, it is clear to me that it supports the principle that full compensation should be given for more serious injuries, and it is committed to simplifying and streamlining the process so that savings will be passed on to the consumer and the policyholder. Critically, there will be access to justice for everyone. Claimants with more minor injuries will still get their vehicle repaired, there will still be access to loss of earnings compensation and, rightly, there will be a focus on rehabilitation. Having dealt with such injuries for many years, that is what most people want. They want to be back in the position they were in before the claim. It is right to ask why there should be a link to a cash settlement on top of this when many of the minor injuries that we are talking about are similar to those sustained on sports pitches around the country day in, day out, where no one would give a second thought to making a claim against an opponent.
The UK is still one of the safest places to drive in the EU and vehicles are safer, so it is important that we go ahead with the proposals made in the former Chancellor’s autumn statement.
Anne McLaughlin (Glasgow North East) (SNP)
I congratulate the hon. Member for Wolverhampton South West (Rob Marris) on securing this debate and giving us the opportunity to take stock of the human impact of the reforms to access to justice. Every time I think about the way in which this Government have ensured that ordinary people are denied even the opportunity to try to get justice, I cannot help but think of the words my parents used to dread: it’s not fair—and it really isn’t, Mr Davies.
One of the four objectives of the reforms was apparently to
“discourage unnecessary and adversarial litigation at the public expense”.
I cannot disagree with that sentiment, but I have been working with a constituent who some people would argue falls into that category. Indeed, some have written him off as vexatious. There is a Scots word we use when someone has not had access to justice and is like a dog with a bone: the word is “thrawn”, and my constituent has had to be. He is a whistleblower: someone who tried to do the right thing—and trust me, he was doing the right thing. He is someone who believes in justice.
Anne McLaughlin
If the right hon. and learned Gentleman does not mind, I will struggle to get to the end of my speech without fainting. I am not well today. Unless he wants a medical emergency, I will carry on and try to get to the end—do not worry, I am not actually going to faint.
As I was saying, my constituent is a whistleblower trying to do the right thing. In trying to help others find their voice and hold power to account, he appears to have become a victim of it. He told me of repeated bullying in the workplace as a result of the whistleblowing, which continued when he was on statutory sick leave, undermining his already deteriorating mental health. Access to an employment tribunal, secured by legal aid, has been a lifeline, but it has taken long, thrawn years to get to a position where the might of an institution can be questioned. He will have his day in court, but had he lived in England or Wales he simply would not be able to afford it. That is not me saying, “Scotland good, England and Wales bad”; what I am saying is that it is not fair.
It is not fair on the people who in 2015 found themselves unable to access justice. Statistics provided by the TUC and Unison comparing cases brought in the first three months of 2013 with cases brought in the first three months of 2015 showed the following reductions—I think some have been mentioned already—in the number of cases for the most common types of claims: working time directive, down 78%; unauthorised deductions from wages, down 56%; unfair dismissal, down 72%; equal pay, down 58%; breach of contract, down 75%; and sex discrimination, down 68%.
Maternity Action said that since the fees were introduced there has been a 40% drop in claims for pregnancy-related detriment or dismissal. Is the Minister proud of that record? Does he truly believe that all those additional people in previous years were bringing vexatious—or frivolous, as the hon. Member for Wolverhampton South West said—claims?
Another area of law removed from legal aid was housing. My constituent, Maisie, is an elderly woman with a range of health issues that have negatively impacted on her ability to care for herself and sustain her tenancy. After a small house fire, her son moved in to support her. John balanced his own parenting responsibilities to his son from a past marriage with his commitment to his studies and his mother. They lived in cramped and totally unsuitable conditions and found themselves more or less ignored by their housing association, which refused to put in the disability adaptations they so badly needed because they had asked three years previously to be moved. For the housing association, it was simply not worth the money because they were going to move, anyway.
Offers of accommodation were not forthcoming and this 80-year-old woman and her carer son were trapped. They have now been rehoused in far superior accommodation and are very happy, but the housing association did what they could have done three years previously for two reasons. First, my team and the Legal Services Agency, a wonderful Glasgow charitable law centre, quoted the relevant provisions of the Human Rights Act to remind it of its responsibilities; and, secondly, there was a threat of legal action. That was possible because my constituents could claim legal aid, as they lived in Scotland. As it happens, the housing association saw sense and things did not get that far, but if a similar thing were to happen to a constituent of the hon. Member for Wolverhampton South West, the threat of legal action would be taken with a pinch of salt. That is not right. I thank the Legal Services Agency and my team, because now the 80-year-old woman in question can live out her days with her son in comfort and dignity.
On Sunday, the Prime Minister promised to introduce wide-ranging reforms to correct what she called the “burning injustices” in modern society. She proposed a “shared society”; she also proposed to lead a “one-nation” Government, working for all and not the “privileged few”. She said that the Government’s role is to
“encourage and nurture these relationships and institutions where it can, and to correct the injustice and unfairness that divides us wherever it is found.”
How on earth can she square that with taking away the means to correct those burning injustices from all but those who can afford to pay high legal fees? There are many people relying on us in Parliament and willing us to make the right decisions. I want to be able to tell them confidently that when something is unfair, it will be condemned by us in this place and changed. The situation I have outlined needs to be changed.
Yvonne Fovargue (Makerfield) (Lab)
It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate my hon. Friend the Member for Wolverhampton South West (Rob Marris) on obtaining the debate. I was going to go quite thoroughly into the subject of employment tribunals, but I feel that there is no need to do that. As an employment lawyer, my hon. Friend dealt with it comprehensively. However, I want to say that I managed a citizens advice bureau where we saw many people who were very reluctant to take action against their employers; any barriers put in the way will deter people from getting what is rightfully theirs. In fact, Citizens Advice recently revealed that 82% of people say the fee increase will deter them from taking a case against their employer.
The statistics bear that out. Why would someone pay £390 for a £200 wage claim when they know that only 49% of claims are paid in full? It is appalling to put another barrier in the way and impose such fees, which appear horrendous. There has been a decrease in claims. I warned when the change was first debated that a decrease would not mean success, but merely that the individuals concerned had given up, and had not gained what they were entitled to. I would be interested to know why people have not pursued ACAS claims. According to evidence from Citizens Advice, 90% of people would consider a reduced fee limit of £50 reasonable and thought that they could perhaps afford that when making a claim. I wonder whether the Minister has looked at the question of reducing the fee.
My hon. Friend the Member for Wolverhampton South West and other hon. Members dealt extremely well with the issue of whiplash. However, I am concerned about the raising of the small claim limits—and that, not whiplash, is what the consultation specifies. Why were workplace injuries included in that? What evidence is there of fraudulent claims against employers? In my experience, it is difficult to encourage people to make a claim even when the employer has been negligent, because they are extremely worried about the possible consequences. When that is coupled with the fact that if someone is unfairly sacked, there is a tribunal fee, I feel that people are beginning to lose faith in the justice system.
I want to mention the advice deserts, particularly in housing law, which my hon. Friend the Member for Wolverhampton South West also covered. Many small providers—including not-for-profit providers—are giving up their contracts as unviable. That has recently happened in one case in my area. Where are people to go about housing issues, such as severe disrepair, that they cannot get dealt with and that are giving them health problems? People can only have a housing claim if their case is at the severe end. How are people to get justice and avoid further illness, which will put more strain on our already overstretched health system, if they cannot get advice at a place they want to go to and can afford to travel to?
There is a risk that the civil legal aid system is becoming unsustainable. Will the Minister commission an independent review into the system’s sustainability? It is at risk of falling over. Even with sufficient providers, the Legal Aid, Sentencing and Punishment of Offenders Act 2012 reduced the possibility of obtaining early advice on housing and family law. Having been the manager of a citizens advice bureau, I cannot stress enough that early advice relieves the pressure on families, who will probably go to other services if they do not get it, which means they will put pressure on local authorities, housing associations and medical professionals. That is why it saves money. In the case of welfare benefits, £8.80 is saved for every case of early advice; in the case of housing advice, more than £5 is saved. Leaving everything to the last minute is simply the wrong way to deal with people’s problems, not only for them and their families, but for the state.
We must ensure that ordinary people are given an even chance in the justice system. Where is the equality of arms that solicitors always talk about? We need to ensure that people can receive the compensation they are entitled to, and timely advice—the right advice as to whether their claim is viable. I have often found that telling someone at an early stage that they did not have a case prevented them from going as a litigant in person. If they cannot get such early advice, they will be clogging up the court system. Many of the most recent reforms have had the opposite effect and deterred people from getting what they are entitled to. I agree with the hon. Member for Croydon South (Chris Philp) that we need to stop the cold calling. If the proposed changes to the small claims limit are included with the range of proposals, in addition to what has already happened to take access to justice away from ordinary people, I do not believe that people will any longer have faith that ours is a fair and just society.
Geraint Davies (in the Chair)
We are making good time. I invite Stuart McDonald to speak from the Front Bench on behalf of the SNP.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate the hon. Member for Wolverhampton South West (Rob Marris) on securing an important and timely debate. We have enjoyed some thoughtful, passionate and wide-ranging speeches, not least of which was his own tour de force.
As hon. Members have stated, access to justice is fundamental to our society, a key principle of the rule of law and an important component of the right to a fair hearing under article 6 of the wonderful European convention on human rights. It is almost exactly a year ago that we had a debate here, introduced by the hon. Member for Aberavon (Stephen Kinnock), on the same subject. Many of the points raised then still apply every bit as much now, because I do not think there is much doubt that under the present Government and their coalition predecessor, access to justice has become significantly more difficult.
Much of that debate focused, as did the remarks of my hon. Friend the Member for Glasgow North East (Anne McLaughlin) today, on legal aid restrictions imposed under the Legal Aid, Sentencing and Punishment of Offenders Act 2012 and the subsequent cuts to the legal aid budget. I continue to find the thinking behind some of those cuts hard to comprehend. They are indeed counterproductive. The drastic fall in the number of legal aid-funded cases has once again been highlighted today, including even for victims of domestic violence, who in theory should not be excluded. Amnesty International’s recent report, “Cuts that Hurt”, highlighted the particularly poor situation of children and vulnerable people in fields such as social welfare law, immigration law and family law.
As we have heard, the Justice Committee, the National Audit Office and the Public Accounts Committee have all been critical of some of the reforms. One of the most powerful points made by the Justice Committee was:
“The Ministry’s efforts to target legal aid at those who most need it have suffered from the weakness that they have often been aimed at the point after a crisis has already developed, such as in housing repossession cases, rather than being preventive.”
I suspect the Chamber is largely filled with lawyers at the moment, and I am sure that most of us get the point. Surely a better way to reduce legal aid spending is to invest in avoiding expensive crises in the first place.
Ministers argue that it is better to encourage mediation than to provide legal aid for adversarial proceedings. I am all for encouraging mediation. However, legal aid spending should fall as a result of successful voluntary mediation, and it cannot be said that mediation is successful or voluntary if someone is forced into an agreement because they cannot afford to go to court, and perhaps do not even have a proper understanding of their legal rights at that stage.
The other key Government contention in such debates is that the legal aid system in England and Wales has been one of the most expensive in the world. Of course I accept that all Governments have to look carefully at ways to ensure that the budget remains affordable. However, in making that claim, the Government are to an extent comparing apples and oranges. As hon. Members are fully aware, continental legal systems are inquisitorial systems in which less input from legal representatives is generally required but significantly more resources are spent on prosecution services and the courts. Taking all those factors into account, although we can say that England and Wales has one of the more expensive legal aid bills in Europe, the court system overall comes about a third of the way down the European league table.
Equally, there are other ways to keep the legal aid budget under control without having to slice and dice the scope and slash availability. I point to Scotland as an example, because as I understand it, legal aid spending per capita there is less than in England and Wales, but at the same time, the coverage and scope of the legal aid system is more generous. There are numerous reasons for that. For example, England and Wales have far more very expensive fraud trials, and so on. However, a key point is that the focus in Scotland has been on simplifying procedures so that the cost of court proceedings is much less than it was, so there are different ways to go about doing things.
Hon. Members have all rightly pointed out that access to justice goes beyond questions of legal aid. On fees, we shared opposition to criminal court fees and their predictable consequences and we welcome their withdrawal. We also welcome cancellation of the ludicrous 500% increase in fees for the asylum and immigration tribunal, although who knows how many people have had to leave the country as a result in the meantime? Employment tribunal fees have had a drastic effect on access to justice, as other hon. Members have pointed out, and they too should be withdrawn. I am pleased that the Scottish Government propose to do just that when the powers are devolved.
However, the fact that the Government have to make and consider those U-turns suggests that they need a much more fundamental rethink of their approach. Other speeches have covered the changes to personal injury rules and the small claims limit—I should have predicted that and looked into the issue in more detail. The hon. Member for Wolverhampton South West kindly pointed out the different system that exists in Scotland.
I share hon. Members’ general scepticism and concern about what exactly the proposed changes will achieve. I say that, having had to confess to colleagues who have worked for Thompsons, that I previously trained with an insurance-financed defenders firm—I do apologise. None of that is to say that the problem does not need to be addressed. The hon. Member for Croydon South (Chris Philp) highlighted the issue of horrendous cold-calling. I had a similar issue when I managed to reverse into my garage wall—quite how I was supposed to sue the garage wall I am not sure. All I would say to him is that some of what the Government propose to solve the problem would surely mean throwing the baby out with the bathwater. There must be other ways of tackling that without having to go as far as the Government suggest.
Sir Oliver Heald
In Scotland there are significantly fewer personal injury claims, and there has never been the problem of the industrialisation of such claims as has happened in England and Wales. Scotland has therefore not had the same sort of problem of a claims culture that we are trying to address.
Stuart C. McDonald
That is an interesting point. I suppose we have to examine why that is the case, because we have not managed to get rid of that in Scotland by excluding all sorts of cases from courts, so it would be interesting to look into that further.
There are a lot of access to justice issues that we could speak about, but before finishing, I will focus on something that has not been spoken about yet: the particular barriers to justice that the Government are putting in place for those who are seeking asylum or who are migrants. Last year Opposition MPs highlighted that the Immigration Bill, which was then making its way through the House, would make people have to leave their families and jobs in order to conduct appeals against Home Office decisions from abroad, would cut back on appeal rights against refusal of asylum support, leaving vulnerable, destitute people without any legal recourse, and would introduce procedures allowing families with children to be summarily evicted without so much as a court order, never mind a court hearing.
I know that MPs here today have disparate views on immigration and the rights that migrants should have, but I cannot understand how anyone can say that migrants should be deprived of proper access to a court in order to vindicate the rights that they do enjoy. Denying access to justice should not be a means of trying to control immigration. Various other significant concerns arise right across the sphere of immigration and asylum law, and I will mention three or four before concluding.
Geraint Davies (in the Chair)
Just so you are aware, Mr McDonald, I have allowed up to 10 minutes for Front Benchers, so you have a reasonable amount of time left.
Stuart C. McDonald
Thank you, Mr Davies. The first concern is about the massive restrictions on appeal rights, previously introduced by the coalition Government and now replaced by an administrative review scheme that the chief inspector of borders and immigration said was operating very poorly. The second concern is about the difficulties in accessing legal aid-funded solicitors. As an important example, that includes unaccompanied asylum-seeking children who are transferred under the national transfer scheme, who may find themselves moved to a part of the country where there is simply no face-to-face advice available. A third challenge is the lack of legal aid—in contrast to Scotland—for too many immigration and asylum issues, including for too many children, detainees, mentally ill and other vulnerable persons. All that is exacerbated by a difficult fee remission scheme. Finally, I highlight the slow speed of justice, with huge waiting times for a hearing at the asylum and immigration tribunal.
The scale of the problems caused by all these cuts and changes is hard to be precise about, even if the anecdotal evidence is very worrying. The Government have so far refused to measure the number of people appearing as party litigants at the asylum and immigration tribunal. That prevents us from properly assessing what is going on as a result of Government policy. The Lord Chancellor and Secretary of State for Justice is receiving representations from the Joint Council for the Welfare of Immigrants on this matter, and I hope that she will listen.
In conclusion, the Government can talk about sustainably funding the justice system, but if funding decisions are preventing access to justice, then justice itself is not being sustained.
Richard Burgon (Leeds East) (Lab)
It is a pleasure to serve under your chairmanship, Mr Davies. I thank my hon. Friend the Member for Wolverhampton South West (Rob Marris) for securing the debate and for his typically persuasive speech. Such speeches are what earned him his reputation as a fantastic lawyer and then a fantastic MP. I certainly agree with his description of access to justice as a pillar of the welfare state—how right he is.
I pay tribute to all hon. Members who have spoken today from all parties, not only for their contributions, but for the work they do in their constituencies. Each and every Member of Parliament in Westminster Hall today—and of course, in the main Chamber earlier—has experience of attending advice surgeries, to which constituents come who are unable to get the legal representation they so desperately need. That is often why they end up at our advice surgeries. Sadly, much of that is because of the Conservative Government’s cuts to legal aid since 2010.
My hon. Friend gave a comprehensive analysis of the problems with the Government’s proposals for the small claims limit. I will not retread the ground that he covered, but to pick up on a point made by my hon. Friend the Member for Makerfield (Yvonne Fovargue), this is not just about so-called soft tissue claims. I recommend that all Members on both sides of the House, including the hon. Member for Croydon South (Chris Philp), read the full title of the consultation, which is: “Reforming the Soft Tissue Injury (‘whiplash’) Claims Process: A consultation on arrangements concerning personal injury claims in England and Wales”. It is not just about whiplash claims and includes injuries in the workplace, as other hon. Members have said.
I am concerned that the proposals will affect the lower-paid most adversely. In assessing claims, their value includes the lost wages arising from any injury, so those who are paid higher wages might more easily surpass the £5,000 limit, leaving the lower-paid less likely to be able to cover their costs. To borrow a phrase used by the hon. Member for Croydon South, I consider that to be morally corrosive.
It is almost a year to the day since the publication of the annual report to Parliament from the Lord Chief Justice, Lord Thomas, in which he said:
“Our system of justice has become unaffordable to most.”
That is as clear and authoritative a judgment on the state of access to justice as could be hoped for. The reasons for that assessment are clear: employment tribunal fees, LASPO—the Legal Aid, Sentencing and Punishment of Offenders Act 2012—and “Transforming Legal Aid”.
It was the coalition Government who introduced employment tribunal fees. As I have said before, I will never forget the first time I lodged an employment tribunal case after they introduced those fees, when I was an employment tribunal lawyer at Thompsons. The message flashed up on the employment tribunals service website: “Customer, please enter your credit card details”. It says a lot about the Government’s view of workers seeking justice that citizens attempting to assert their workplace rights are viewed as consumers or customers. Employment tribunal fees have resulted in a 70% reduction in the number of cases.
Richard Arkless (Dumfries and Galloway) (SNP)
The hon. Gentleman makes a passionate and persuasive argument. Does he agree that if the purpose of hiking employment tribunal fees was to get rid of vexatious claims in the system, it has failed entirely? The win-loss ratio is exactly the same as it was before the fees were hiked. That is the evidence that the Justice Committee heard, and it makes the policy redundant.
Richard Burgon
The hon. Gentleman is correct. I put it to hon. Members that the real purpose of introducing employment tribunal fees was not to reduce vexatious claims, but to reduce claims full stop. Employment tribunals received about 60,000 cases in the year before fees were introduced, but that fell to below 20,000 the year after. As my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) indicated, that is not because of a reduction in illegal or unfair treatment by employers in that time—if only!
In June 2016, the Justice Committee released its report on court and tribunal fees, which complained that it was
“unacceptable that the Government has not reported the results of its review one year after it began and six months after the Government said it would be completed.”
Unbelievably, seven months later, the Government continue to sit on a review of the fees. We can only suppose what the reason for that is, but perhaps the Minister will enlighten us.
LASPO, which was enacted by the coalition Government, removed most social welfare law cases from eligibility for legal aid assistance. Those seeking assistance for debt advice, housing—apart from in homelessness cases—and welfare benefits advice were left with few places to turn, as my hon. Friend the Member for Makerfield knows from her experience running a citizens advice bureau. The barrier that has been put up in such cases has hurt some of the most vulnerable people in our society. The lack of benefits advice is of particular concern because many appeals against the Department for Work and Pensions succeed. Between December 2014 and June 2015, 53% of those who appealed “fit to work” decisions had them reversed. Removing advice on such cases risks people missing out on benefits to which they are eligible.
Last year, the Law Society launched its campaign to end legal aid deserts—areas of the country in which legal aid advice for housing cases is disappearing. In a Westminster Hall debate on 30 November 2016, the Minister denied that such legal aid deserts exist. I wonder whether he has told the Law Society that its research is wrong. In July last year, Young Legal Aid Lawyers, the Legal Action Group and the Legal Aid Practitioners Group wrote to the Prime Minister, highlighting the huge drop in civil legal aid cases since LASPO. In 2012-13, before LASPO, 724,243 civil law cases were publicly funded, but in 2015-16 there were just 258,460. They described that, correctly in my view, as
“a picture of justice denied”.
Last week, the Justice Secretary’s own actions confirmed the need for a review. LASPO removed most private family law matters from the scope of legal aid, which naturally led to an increase in people representing themselves, as has been described. The increased number of litigants in person led in turn to violent and abusive people cross-examining their victims—usually their former partners—in court. Recently, the senior family court judge, Sir James Munby, said:
“I have been raising since 2014 the pressing need to reform the way in which vulnerable people give evidence in family proceedings. I have made clear my view that the family justice system lags woefully behind the criminal justice system.”
Well, last week that reform was promised: apparently the Justice Secretary will review the situation. That is as good as an admission that the legal aid reforms to the family courts have caused the problem that now needs a solution. Although the Government’s initiative would be a step in the right direction and provide some measure of comfort to victims of domestic violence, it is no substitute for both parties in family proceedings having representation.
When the coalition Government passed LASPO, they committed to reviewing its effects in three to five years, and we are now well within that timetable. The review ought to have begun a long time ago—the words of the Lord Chief Justice last January, which I quoted earlier, make that clear. However, that is not the only barrier to access to justice that has been erected and maintained by the Government.
Yvonne Fovargue
Does my hon. Friend agree that the review needs to take place urgently, because the impact assessment of LASPO said that it would disproportionately affect women and the disabled, but that that was a price worth paying?
Richard Burgon
I agree that this is a matter of the utmost urgency; I also agree that such a detrimental impact on some of the most vulnerable people and minorities in our society is never a price worth paying.
In 2013, the then Justice Secretary, the right hon. Member for Epsom and Ewell (Chris Grayling), introduced other reforms. In summary, they involved restrictions on the availability of judicial review; restrictions on the ability of foreign nationals to receive publicly funded legal assistance; removing publicly funded legal assistance for nearly every area of prison law; further cuts to immigration law and family law; and cuts to fees for litigation in criminal cases. However, plans to tender criminal defence representation to competition were abandoned.
The right hon. Member for Surrey Heath (Michael Gove) then became Justice Secretary and, thankfully, reversed some of his immediate predecessor’s worst policy blunders. He also postponed a planned further cut of 8.75% to the fees of criminal solicitors until April 2017, which is now just around the corner. I am sure it would be welcomed, both in the House and outside, if the Minister confirmed today that that 8.75% cut will not happen.
When the right hon. Member for Epsom and Ewell was in post as Justice Secretary, he wrongly asserted that the legal aid bill was spiralling. He claimed that the public had lost confidence in the legal aid system and he dismissed many who rely on judicial review to hold the state to account as “left-wing campaigners” using the courts as a “promotional tool”. He provided no objective evidence or serious substance for those claims. He, too, holds responsibility for the crisis in access to justice that we face.
When my right hon. Friend the Member for Islington North (Jeremy Corbyn) became Leader of the Opposition in 2015, he promoted and set up an independent review, the Bach review, into access to justice. He has long understood the place of legal aid and access to justice in a civilised society, as we all do in the Opposition. The Bach review is considering how the justice system should operate in the 21st century: it should harness new technology without compromising fairness or due process. The Government need to act now to reverse their most botched reforms, so that access to justice is no longer “unaffordable to most”.
Geraint Davies (in the Chair)
You have 10 minutes, Minister, if you are to allow a minute for Mr Marris at the end.
The Minister for Courts and Justice (Sir Oliver Heald)
I congratulate the hon. Member for Wolverhampton South West (Rob Marris) on securing this debate, and I thank Members who have contributed to it. Some important points were made. However, regarding the hon. Gentleman’s criticism that the impact assessment on the whiplash changes does not show a saving, I must say that it makes it very clear that the saving is £1 billion, which, of course, accounts for the £40 cut in premiums for every motorist in the land that I mentioned. Are we to sacrifice that simply to uphold a threshold that has been in place for so many years, since 1991, and in the interests of solicitors?
The hon. Gentleman very fairly made the point that he was from Thompsons Solicitors. I think that the Labour party spokesman, the hon. Member for Leeds East (Richard Burgon), is also from Thompsons. There was one other who did not reveal himself, but I suspect that it is the hon. Member for Ellesmere Port and Neston (Justin Madders). They are the three musketeers of the Thompsons world. Anyway, it is a very fine firm, and I have to confess that I have been instructed by it on one occasion in the past, and it prepared the brief very well.
My hon. Friend the Member for Croydon South (Chris Philp) made a very important speech, explaining the industrial nature of the problem we face with these whiplash claims and the dubious practices that go with it. For those from Scotland, such as the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald), the Scottish National party spokesman, it will be hard to understand this claims culture; Scotland does not have it. It is hard for people to understand it if it has not developed in their part of the UK. It has got to the point at which it is a massive problem. I will cover the point made about employment fees in a moment.
My hon. Friend the Member for North Warwickshire (Craig Tracey) made a very knowledgeable speech. He pointed out that we have to consider not just the pure whiplash claims, but those that are whiplash-related—those described as a back or neck injury, but that are, in effect, whiplash cases. That, of course, explains the figures that I outlined earlier.
It has been a good debate, and I wanted to make the point at the start that the Government are committed to ensuring that the justice system works for everyone. I will describe some of the actions that we are taking. The SNP spokesman made the good point that this is not just about legal aid; it is also about simplifying procedures and changing the way that the legal system works. Of course, that is what we are doing. The Lord Chancellor, the Lord Chief Justice and the Senior President of Tribunals jointly announced plans that are about renewing and transforming our justice system. Of course, we are putting in a massive investment of £1 billion to reform and digitise our courts, to make sure that this vital public service reflects modern needs and expectations.
The reforms will deliver swifter justice and, I hope, a less stressful experience for those involved. We will get cases out of court that do not need to be there, whether by using online procedures or through more alternative dispute resolution. We will apply the full force of judge and courtroom only in those cases that require it, and will strip away unnecessary hearings, redundant paper forms and all the duplication in the system, because we have the best legal system in the world but it also needs to be the most modern. That is what we aim to achieve. The guiding principle is to have a system that is proportionate and accessible, and is there for the vulnerable, victims of crime, members of the public, legal professionals, witnesses and litigants. We want a system that is a statement of our values as a country and leads the world.
Our legal aid system is important. The coalition Government faced unprecedented financial challenges; it is all very well people talking as though there were no pressures, but there were huge financial pressures at the time, and the Government had to reform. They concentrated legal aid on the most important areas—on cases where an individual’s liberty or home is at stake; where children might be taken into care; or where there is domestic violence. Although the reforms were substantial, it is right to follow through on our intention, which we set out at the beginning, which is that there should be a proper review. We have said that it will take place by April 2018 at the latest. We are well within the period during which we could start the review, and we will announce our intentions on it in the coming period.
I want to emphasise that we have made sure that litigants in person get help and support. Since 2015, we have provided £3.5 million to the litigants in person support strategy, through which we are working closely with the advice sector, voluntary partners and the pro bono sector; they are enhancing the local signposting of local and national legal support services and co-ordinating their work. We have seen a fast-expanding number of personal support units. The citizens advice bureaux do a fantastic job, and I pay tribute to the hon. Member for Makerfield (Yvonne Fovargue) for mentioning them. We also have many pro bono providers and local law clinics. This strategy has momentum, and it is wrong for the hon. Member for Wolverhampton South West to say that the result of having litigants in person is longer cases. That is not what the evidence shows; in fact, the average length of a civil case is becoming shorter, year by year.
I want to make family court processes safer for victims of domestic abuse, and our recent announcement contributes to that. It is right to have a system in which the victims of domestic abuse do not face cross-examination by their abusers. That sort of cross-examination is illegal in criminal courts, and we would like to see it outlawed in family courts. I have mentioned alternative dispute resolution.
Both the hon. Members for Ellesmere Port and Neston, and for Wolverhampton South West, mentioned employment tribunal fees. The Government are reviewing the impact of the introduction of fees in those tribunals. There is not a report gathering dust on my desk or anything like that; we are completing the work. I explained all this when I appeared before the Justice Committee recently. The work that we are completing is about the categories in the discrimination field; we are looking at the implications for each of those groups. We are getting to the point at which we will soon be able to produce a report; it will not take much longer. I said that I would produce it as soon as possible in the new year and I meant it.
Since it has been mandatory to go to ACAS, it has been resolving far more cases. The effect is that there are now 92,000 cases going to ACAS, whereas previously there were only 23,000. There used to be about 17,000 cases that did not then go on to the tribunal; now, it is something like 45,000 cases, so ACAS is having a big effect in this area. I understand the frustrations of those who say that the review has taken too long, but it will be comprehensive and it is not far away.
We face whiplash cases on an industrial scale. The number and cost of those cases, and their adverse impact on the price of motor insurance, is a concern for Government. There have been huge improvements in car safety, so how can it be that 770,000 road traffic accident claims were made in 2015-16, compared with only 460,000 in 2005-06, with around 90% of the claims in 2015-16 being whiplash-related? That figure is too high and the Government must take action to tackle this issue and protect consumers.
The previous Prime Minister held a Downing Street summit on this issue and we have recently made changes, such as introducing the new MedCo system, which improves the medical expert side of things. There was also a recent consultation on raising the small claims limit for personal injury claims to £5,000, and on damages for road traffic cases involving whiplash—soft tissue injury. If we can save £40 per head on motor insurance policies, clearly those are issues that we should be consulting on and considering very seriously. Also, it is worth bearing in mind that the £1,000 limit for these cases was set in 1991, more than 25 years ago. Since then, the small claims limit for everything else has gone up to £10,000, so the review is very much needed.
Finally, to provide reassurance to Members, people can still employ a lawyer to help them with a case that is in front of the small claims court, and they can try to reach an agreement with their lawyer about how their case is funded. Of course, the point is that they cannot recover costs, but there is no ban on taking legal advice, though clearly people would need to look at the economics of that. The other point to make is that if someone has a complex case that should perhaps be dealt with by the county court in its full setting, that is possible; they can make an application to that court, which can transfer—
Geraint Davies (in the Chair)
Order.
Motion lapsed (Standing Order No. 10(6)).