Justice: Civil Litigation Reform

Debate between Lord De Mauley and Lord Thomas of Gresford

Tuesday 29th March 2011 Lords Chamber

[Lord Thomas of Gresford]

My Lords, centuries of English law produced a position whereby, in civil and criminal cases, it was a principle that the lawyer should not have a personal interest in the outcome of the case. In other words, he would be paid whether he won or lost. That was mitigated to ensure that there was proper access to justice by the introduction of the legal aid scheme. It was on that principle that during the previous Government’s period we on these Benches opposed the introduction of no-win no-fee schemes.

It is interesting to look at this Statement to see what are now said to be the problems resulting from the change from the basic principle that we had had for so long. The Statement refers to,

“the perverse situation where fear of excess costs forces defendants to settle, even when they know they are in the right”.

The proposals are also said to,

“begin to restore proportion and confidence in our system of justice”.

What has happened in the mean time, over the past 10 or 12 years, is that advertising has been allowed to proliferate and non-lawyers have collected and farmed claims. By advertising, they have drawn to themselves hundreds and thousands of claims and have then farmed them out to various firms of lawyers. All these ills have done nothing to improve the lot of the claimant who has been injured or who has a grievance that he wishes to be resolved.

It is because I have such a basic objection to no-win no-fee that I cannot completely endorse these proposals, but they are undoubtedly an improvement on what has gone before and they redress some of the problems that have arisen. Success fees and insurance premiums are recoverable; that is to say that I as a claimant can insure myself against losing the case and then charge the insurance premium, which I know can be tens of thousands of pounds, to the defendant, provided that I am successful. I can do that not if the case goes to court but if the case is settled at some stage, so the cost of litigation has been a huge problem that has faced defendants and insurance companies.

Another problem that arises because of that is that a plaintiff has very little interest in the amount of costs in the case. He is insured against paying the defendant’s costs, he will recover if he wins and if he loses, and he has none of his own costs to pay. It has been very damaging to permit no-win no-fee cases to go in the way that they have. The proposal to ensure that claimants have an interest in the result and are restrained from allowing their lawyers to run up massive bills of cost, as proposed, is something that I, unlike the noble Lord, Lord Bach, think is a way forward.

The second part of the Statement dealing with the consultation paper on the improvement and efficient delivery of civil justice is also to be welcomed. The proposals to give greater jurisdiction to small value cases, for small claims cases to be heard through the simple small claims process and to increase the threshold for going to the High Court are all to be welcomed.

[Lord De Mauley]

I draw my noble friend’s attention to the fact that Statements are supposed to be the occasion for brief comments and questions.

[Lord Thomas of Gresford]

I accept that rebuke and will leave it at that.