Legal Aid, Sentencing and Punishment of Offenders Bill

Jack Straw Excerpts

Wednesday 2nd November 2011 Commons Chamber

[Mr Djanogly]

I will not—[Hon. Members: “Go on!”] I am afraid that I do not have time to give way.

It is these high legal costs which led to Sir Rupert Jackson’s review. Specifically in relation to defamation and privacy, it is these high legal costs which led to the right hon. Member for Blackburn (Mr Straw), when he was Justice Secretary, seeking to introduce similar changes to those we are now proposing to reduce excessive legal costs, but he mistakenly limited them only to defamation and privacy cases. In effect, that is the exact opposite of what the hon. Member for Rhondda (Chris Bryant) proposes in his amendment. The sands seem to have been shifting dramatically in the Labour camp on this issue.

New clause 39, tabled by the right hon. Member for Blackburn, would reduce the amount of fixed recoverable fees on the pre-action protocol for low-value road traffic accidents in the light of the impact of the ban on referral fees. The Department is now reviewing the situation, but to achieve this outcome does not require primary legislation. Instead, a reduction can be implemented through changes to the Civil Procedure Rules. I can give the commitment that we are looking at this. Indeed, my officials plan to consult on appropriate changes to the level of recoverable costs, and any changes will be placed before the Committee for approval. I can also tell him that I do not intend to go to all the trouble of stopping referral fees being paid to claims management companies, only to see those same fees staying with the lawyers rather than going back to consumers in lower insurance premiums or prices in the shops.

[Mr Jack Straw (Blackburn) (Lab)]

I am grateful to the Minister for those undertakings.

[Mr Djanogly]

I shall take each amendment in turn. Amendment 21 would remove clause 41, the effect of which is to amend the Courts and Legal Services Act 1990 so that success fees under a conditional fee agreement will no longer be recoverable from a losing party in any civil proceedings. Amendment 22 would remove clause 43. I should make it clear that we have listened carefully to specific concerns about the abolition of recoverability of after-the-event insurance premiums in clinical negligence claims and the impact it would have on funding expert reports. Such reports, which can be expensive, are often necessary in establishing whether there is a case for commencing proceedings, which raises particular issues if recoverability of ATE insurance is abolished. In responding to these concerns, clause 43 provides, by way of exception, for the recoverability of premiums in respect of ATE insurance taken out to cover the cost of expert reports in clinical negligence cases.

Amendment 72 would remove clause 44, which abolishes the recoverability of the costs incurred by membership organisations, such as trade unions, of insuring themselves against the risk of paying costs to another party in the event of losing a claim. I strongly believe that the abolition of recoverability should apply equally to the arrangements for membership organisations in order to maintain a level playing field. Amendments 150 and 151 seek to allow the recoverability of success fees and ATE insurance premiums from a losing party in certain claims for damages against a person who carries on business in more than one country or who owns one or more businesses carried on in more than one country or in different countries.