Legal Aid, Sentencing and Punishment of Offenders Bill

Lord Collins of Highbury Excerpts

Monday 21st November 2011 Lords Chamber

[Lord Collins of Highbury]

My Lords, this Bill covers a wide range of issues. The only common thread is that they all come under the auspices of the Ministry of Justice. However, I detect a more disturbing theme after listening to the debate today, which is that those who are most vulnerable in our society end up paying the price for these changes. Because of the time constraints on us today I have little alternative but to focus on one specific area of the Bill, Part 2, on litigation and the funding of costs.

We often hear, and we have heard today, of the so-called “compensation culture”, fuelled by media stories about individuals receiving large compensation payments, constant adverts in the media offering the promise of a handsome settlement if they claim and businesses fearing litigation and being subject to expensive insurance premiums. However, as many of my noble friends have pointed out today, the noble Lord, Lord Young, noted that the problem is one of perception rather than reality.

In early 2010 Lord Justice Jackson recommended radical changes to the system to address this problem. Unfortunately, the view of many victim support groups is that he relied heavily on information from the liability insurance industry but took very little evidence into account from the claimants’ point of view.

The Government’s subsequent Green Paper, aimed at implementing the Jackson recommendations, reflected this one-sided approach by stating in its introduction:

“we are endeavouring to ensure … that unnecessary or frivolous claims are deterred; and that as a result costs overall become more proportionate”.

Many people suffering from diseases and injuries were naturally outraged at the suggestion that they make frivolous claims or that they should suffer because some people might do so. They feel that they are being denied access to justice because of the actions of others.

In publishing their policy plans following the consultation, the Government continued to ignore practically every submission on behalf of claimants. My fear is that the Government are using a sledgehammer to crack a nut, especially in the light of other developments since the Jackson report was published. I suspect this is why the impact assessment contains so little data in support of their arguments. Past figures are of little use when a fixed capped costs regime, including success fees, operates under the RTA fixed-cost portal. Road traffic claims are 80 per cent of all personal injury claims, so only a tiny proportion of personal injury cases will not be subject to fixed costs. The cases that will be affected are those that are of higher value and greater complexity. This one-size-fits-all approach imposes a form of collective punishment on those who are innocent victims and who are lumped in with trivial claims and dishonest claimants. Personal injury claimants are being used to discipline solicitors to force them to keep down their costs. To impose, as we have heard today, more stress and anxiety on people who suffer serious industrial diseases is simply heartless.

Who saves from these proposals? Clearly the insurance companies do, but whether such savings are passed on in reduced premiums is a moot point, as my noble friend Lord Monks pointed out. Who pays? While the cost of litigation will be reduced, what will the cost to justice and fairness be? One of the many quotations I received that moved me was from someone who through no fault of their own is now suffering from exposure to asbestos. They said:

“How can this be morally correct? To make in my case, the most heartbreaking time of my life and the family, much harder to bear. My case has not reached court yet ... Being diagnosed was a big shock. To then be expected to pay legal costs from any compensation that might be awarded adds yet more worry that is not needed”.

On the question of justice, I think two quotations are incredibly relevant:

“Compensation just means that money worries don't compound a very difficult and upsetting situation. It also acts as a deterrent to those who flout the laws on asbestos”.

“Guilty defendants should pay all the costs making companies now think about health and safety of its employees and the financial implications not only now but in the future”.

This last point is critical when you see that, despite our health and safety laws, many industries have an appalling record for accidents.

Finally, who are the losers? Despite the savings to the insurance industry, the changes will actually cost the taxpayer rather than save any money. In a paper shortly to be published by London Economics, Moritz Godel and Dr Gavan Conlon show that while the direct savings attributable to the Jackson proposals are substantial, estimates based on public data suggest that they will be outweighed by direct and indirect costs resulting in a sizeable net loss to the Exchequer of £70.2 million per year. The main sources of loss are tax and the recovery of payments from public bodies resulting from PI claims. So, on the behalf of the real people behind Britain's dreadful industrial disease and accident statistics, I plead for the Government to think again and put fairness and justice first.