Civil Liability Bill [HL]

Lord Bassam of Brighton Excerpts

Report stage (Hansard): House of Lords
Tuesday 12th June 2018 Lords Chamber

It is right that people who are injured get compensation, but they need to be able to do that with proper advice. We do not accept that reducing access to our courts should be done in this underhand way by this change in limits. This amendment will bring the issue into primary legislation, where it belongs. I beg to move.

[Lord Bassam of Brighton (Lab)]

My Lords, I rise to support my noble friend Lady Hayter and specifically to speak to Amendments 47 and 48. It is worth saying that we are trying to bring forward and implement part of the Jackson recommendations.

My noble friend Lady Hayter has covered most of the ground better than I could ever dream of doing in making her powerful and persuasive case from the Front Bench. If we could, we would have brought forward a different amendment and found a simpler way of inserting into the Bill a restriction to the Government’s ability to raise the small claims limit for personal injury to £1,500. This amendment, imperfect though it is, goes some way towards tackling that problem. It is our contention that, by raising the limit in the way they have, the Government intend to seriously disadvantage those with an entirely legitimate personal injury small claim and prevent them gaining access to justice and legal advice.

I have no doubt that most of us privileged enough to sit in this House, or in the other place, have little fear of taking on those in authority and power—some of us rather enjoy it. That is not the case if you are a nurse or a teacher, a farm or shop worker, or you work in a factory and have limited spare time, financial resources and ability to tackle issues of personal injury. This amendment seeks to protect those people. As has been said on numerous occasions, the Government are proposing to make changes to the small claims limit, not on the face of the Bill but by other, back-door means. This will impact on hundreds of thousands of people injured through no fault of their own. It will pitch the nurse, the teacher, the shop worker, the factory worker and the land worker against the insurer, on their own and in their own time. The insurers will be able to afford lawyers and wily negotiators, but the injured will be expected to take on these forces with no help whatever.

The Minister, who I am sure is a fair man, may say that the system that deals with this is simple, but it is not designed by those who have to confront it. We all know that there are many who cannot use portals and online means of tackling these issues because they do not have the training or expertise and feel uncomfortable in the online world. The Minister may say that insurers will not fight a case which they know they are going to lose but that does not stop them playing hardball because they choose to. Why would they not, faced with a claimant on their own? Insurers also have a duty to their clients. I trust that the Minister will not say—as he did before the Justice Committee—that claimants can get help from the CAB, because anyone who knows anything about the diminished state of free legal advice services in this country would be only too happy to take him to see how they are struggling and the queues, delays and frustration that are routine.

From this perch, I could recite case after case where insurers have fought injury claims to the bitter end for reasons that frankly perplex lawyers for the claimants. However, we have limited time so I will briefly quote just two of many cases provided to me by Thompsons. One claim involved a care assistant in her early 40s who injured her right elbow and upper arm when lifting a patient. She was using the correct technique but did not have the equipment required to complete the task properly. The employer denied liability throughout and fought the case for more than a year before it was eventually settled for a sum that would have fallen within the new proposed small claims limits. The other case, which would also fall within the new limits, involved a senior staff nurse who tripped over wires that had not been properly protected and covered. Her employers fought the claim right up to the point when the trial was due to begin. Our amendments seek to ensure that those who do not have a corporate lawyer behind them do not fall prey to another racket—the routine denial of claims by insurers, just because they can.

The amendment seeks to ensure that claimants always have advice on the value of their claim so that they do not undersettle. It also provides that, where insurers deny liability, the claimant has someone by their side to advise them and, if necessary, represent them in relation to the issue of liability. It does not propose that the costs recoverable by the lawyer for the claimant are open ended; they will be the same fixed costs that would be recoverable if this case were in the fast track.

As my noble friend Lady Hayter has outlined, the second amendment in this group is specifically aimed at ensuring that those injured can have access to medical advice in their case and recover the cost of medical reports that might be necessary. That is essential and will be a contribution towards ensuring that there is no significant undersettling, which is a major issue in these cases. These amendments are about fairness and equity in the legal process. They may not seem to the Minister to be vast in their extent, but they are numerous. Although they do not always involve large sums of money—which noble Lords may feel uncomfortable talking about—this House has a duty to try to ensure fairness and balance in the legal system. Even at this late stage, the Minister could make a commitment to retaining the limit in accordance with Lord Jackson’s recommendation.

--- Later in debate ---

[Lord Keen of Elie]

My Lords, I will not begin with a bang but I will address the points that have been raised.

I begin by pointing out, with great respect, that the noble Baroness, Lady Hayter, may not be entirely correct in some of the propositions she advanced. She said that the £1,000 limit had been with us since 1999. It has been with us since 1991. The small claims limit in respect of claims other than personal injury and housing claims is now £10,000 and operates effectively and efficiently at that level. That has to be borne in mind as well.

The noble Baroness spoke with her consumer hat on and referred to the small guy. Reference was made to the worker with limited ability to deal with his claim. The noble Lord, Lord Bassam, referred to workers being pitched out on their own with no help and alluded to a number of examples given by Thompsons solicitors—I shall come back to that in a moment—of where they were perplexed by the way in which claims were dealt with by insurers. The noble Lord, Lord Monks, said rather modestly that Thompsons solicitors were one of the largest firms of trade union solicitors in the country. They must be the largest by quite a long way. They are well established and have been for many years. Why do we refer to them as trade union solicitors in this context? It is because one of the great benefits of union membership for workers is the availability to them of legal advice and assistance when they require it in respect of a claim, particularly one arising in the course of their employment—which is why legal aid is not available in those circumstances. So, far from the little guy, the worker, being pitched out on their own without any help, they almost invariably have the assistance of probably the largest and most established firm of trade union and personal injury solicitors in the country.

I do not decry that—it is an immediate and obvious benefit—but the disbenefit of increasing the small claims limit is that the extent to which the union will recover its legal costs will be more limited, and that will have an impact on trade unions. I understand that and one has to take it into account in the overall scheme of these provisions.

[Lord Bassam of Brighton]

The noble and learned Lord will probably accept that somewhere in the region of 6 million people are members of trade unions. That leaves a rather larger workforce who are not represented by trade unions. Those employees are in a more vulnerable position than that faced by those who are represented by a union. My guess is—perhaps the noble and learned Lord can help me here—that the majority of people will not be able to access the support they would get if they were a trade union member. So most people who come up against this limit will be affected by that.

[Lord Keen of Elie]

I note what the noble Lord says about national trade union membership, and no doubt the unions will try harder to recruit more widely. One of the obvious benefits they can hold out is the provision of legal advice and assistance for those who become members. I accept that there is a balance to be struck.

Amendments 47 and 48 seek to restrict the increase in the small claims track limit for whiplash injury claims to a maximum of £1,500, as opposed to the proposal that there should be an increase to £5,000. They also seek to restrict the ability of the Civil Procedure Rule Committee to make further amendments to the upper limit. As we have indicated before, motor insurance premium costs are increasing as insurers pass on the cost of dealing with the continuing high number and cost of whiplash claims. I referred earlier to the 2017 election manifesto provision that the Government were committed to cracking down on these claims and ensuring that the money saved was returned to consumers through lower premiums. These amendments would maintain the burden on ordinary motorists by restricting the flexibility of the Government to reduce the costs of civil litigation through changes to the Civil Procedure Rules.

Whiplash claims are generally straightforward and do not routinely require legal advice. The small claims track is suitable for such claims. It is designed to be accessible to litigants in person, and the Government are working closely with stakeholders to develop a comprehensive package of guidance and support for users.

The Government have chosen to increase the small claims limit for road traffic accident personal injury claims to £5,000 for good reason. This limit, as I said, has been set at £1,000 since 1991 and, as compensation levels have risen, the small claims track no longer covers the same breadth of claims as it once did. Following consultation, the Government believe that increasing the limit for RTA personal injury claims to £5,000 is a careful and proportionate increase, particularly having regard to the fact that the limit for other claims, with the exceptions I mentioned earlier, is now £10,000. A level of £5,000 will facilitate early and expedited settlement under the proposed tariff structure and will encourage insurers to challenge unmeritorious claims, many of which are not now challenged because of the potential legal costs.

A decision to tie such limits—currently, for good reasons, enshrined in secondary legislation—to a restrictive primary legislative process would be inflexible. The Civil Procedure Rule Committee, under the leadership of the Master of the Rolls, sets out the rules of procedure to ensure that the civil justice system is fair, open and effective. It is the body that sets the financial upper limits for the current three tracks of the civil justice system following consultation. That system has operated effectively for some time. It is flexible and it is appropriate that procedural changes should be made in this way to the civil justice system.

However, we listened to points made earlier about the position of those who are considered to be vulnerable road users. Noble Lords will be aware that they are already excluded from the provisions of Clause 1, and it is proposed that they may be exempted also from the £5,000 limit on the small claims track. We are giving further consideration to that at the present time.

Amendment 48 seeks assurances as to the recoverability of the cost of a medical report in respect of whiplash injury claims, notwithstanding the increase in the small claims track limit. That has been addressed already. The amendment also seeks to change the nature of the small claims track itself by permitting a claimant to recover their legal expenses. We consider that, given the nature of the small claims track for personal injury claims, it would be wholly inappropriate to introduce the recovery of legal expenses. The small claims track was designed to be a low-cost process accessible to litigants in person. The rules have been purposefully and carefully drafted to ensure that both parties share the financial burden of litigation and pay their own legal costs—or, in the case of a union member, have them met by the union. That is a key advantage of the process.

A number of noble Lords have questioned why insurers do not do more to challenge potentially inflated or fraudulent claims, particularly whiplash claims. Part of that answer lies in the cost of defending a claim in the fast track. Increasing the small claims limit so that more of these straightforward whiplash claims—where the insurance industry tells us that liability is admitted in around 90% of cases—are heard in a small claims court will encourage insurers to challenge unmeritorious claims. By contrast, challenging a claim in the fast track is an expensive process that insurers not unnaturally seek to avoid. So there are very clear cost advantages overall in increasing the limits for the small claims track. Where a case is considered to be of a degree of complexity such that it would not lend itself to the small claims track, clearly the court can direct that it should go on to the fast track.

Therefore, in respect of Amendment 48 in particular, the idea of having different cost rules in the small claims court based on the type of claim would create confusion, would undermine the whole purpose of the small claims track and would potentially be unfair to all users of the court system. In these circumstances I invite the noble Baroness, Lady Hayter, and the noble Lord, Lord Bassam, not to press their amendments.