Legal Aid, Sentencing and Punishment of Offenders Bill

Lord Phillips of Sudbury Excerpts

Monday 30th January 2012 Lords Chamber

[Lord Phillips of Sudbury]

I support my noble friend. My name is on most of the amendments in his name, although not Amendment 137D. I commend him on the clarity with which he spoke to what is an extremely complex set of issues. I wonder whether putting 30 technical amendments in a single group is really an efficacious way of legislating. I am bound to say that the background to these intensely complex practical and theoretical issues does not seem to have been adequately prepared. I endeavoured on day five of Committee to move an amendment calling for a review of clinical negligence cases, which are in a special class of sophistication of their own, and I hope to move it again on Report. I hope that the Minister will not mind my saying that I believe that there has been insufficient preparation for our debates on those matters.

I add only a couple of facts to the underlay to the group spoken to by my noble friend Lord Thomas of Gresford. The position in respect of claims and litigation generally is a mess, let us make no bones about it. It is in a fiendish mess. I speak as one who has always been deeply concerned about the whole concept of conditional fees, which seem to me to be in permanent danger of undermining the professionalism of lawyers, because they have a deep conflict of interest when acting on a conditional fee basis vis-à-vis both their clients and their professional obligations. That is where we are, and perhaps one day we will consider how other countries deal with the problem of how to fund bringing cases to law. Perhaps Germany would be a good example, where the whole field of costs insurance is infinitely further developed than it is here and seems to provide their citizens with a rough equality of access to justice that we no longer have with the progressive dismantling of the legal aid scheme.

To undermine the points made by my noble friend Lord Thomas, one fact struck me forcefully. According to a general insurer from whom the Ministry of Justice has obtained statistics in preparation for the Bill, costs as a proportion of the damages have risen from one half in 1999—whatever the client got by way of damages, the costs were roughly one half—to being roughly equivalent by 2004 and costs now exceed damages by 50 per cent. In the space of just over 10 years, that huge swing in the division of spoils between the lawyers and the insurers on the one hand and a client on the other has taken place. That must give rise to intense concern on the part of anyone and everyone. As I said, I think that the amendments in the group in the name of my noble friend Lord Thomas to which my name is attached improve things a bit, but we should not deceive ourselves that we will end up with fair access to justice.

[Baroness Turner of Camden]

I am not a lawyer, and this is a very complicated set of amendments in a single group. My concern arises because for many years I was a trade union official with responsibility for the legal cases service that we provide to our members. My concern, and that of the TUC, is that the Bill changes the balance away from people who are poor who have had an accident at work and want to seek compensation for their injuries. It has destroyed the balance, as they see it, between the wrongdoer and the injury victim, denying claimants access to the courts and with the money taken from them simply serving as a windfall for negligence defendants and sometimes for their insurers. Even if representation can be obtained, many on a low or middle income may not claim because they are unable to fund disbursements upfront or because of a general feeling regarding the costs, or the risk of the costs, involved. Trade unions collectively assist up to 150,000 personal injury claimants a year. There is a concern that their ability to look after their members will be impacted by the Bill, and in particular by Clauses 43 and 45, which we are currently discussing with this group of amendments.

As has already been explained, back in 1999 mechanisms were put in place to ensure that all reasonable legal costs could be claimed by a successful claimant from the negligent party to protect access to justice, particularly for those on a low or modest income, and to protect claimants’ entitlement to their compensation in full. Such costs include success fees and “after the event”, or ATE, legal insurance. In our opinion, Clauses 43 and 45 would probably reverse that position, destroying injured claimants’ rights.

Clause 43 stops recoverable success fees. Currently, claimants can find lawyers to take on their cases on a no-win no-fee basis using a conditional fee arrangement because the lawyer is paid a success fee. This is an additional cost paid in successful cases to cover the risk of running a whole basket of claims, some of which will be lost. It is the recoverability of this success fee from the insurer that the clause will ban. Instead, the claimant might have to pay up to 25 per cent of their damages to their lawyer as a success fee—if they can find a lawyer to take the case. As Jackson knows—we have been talking about the Jackson report because it is on his recommendations that a lot of this legislation is based—this will harm claimants, and he proposed an increase in damages for the injury alone of 10 per cent to compensate. However, this will not work. Those pursuing employer liability claims will lose out, and this uplift may prove largely unnecessary if the Bill relates only to RTA claims. We are concerned not about that but about accidents at work in this particular briefing.

So far as concerns accidents at work and industrial injury, there is a further concern that if this legislation takes effect there will be a reduction in the number of compensation cases that can be pursued, and that that in turn will have an effect on safety at work, health and safety legislation and so on. That is another impact that this legislation will have on compensation for injuries that workers may sustain in their employment.

Clause 45, at the stroke of a pen, stops a claimant recovering the cost of ATE insurance to cover the risk of paying a defendant’s costs or disbursement. Without ATE, many claimants will not be able to take the risk other than in very straightforward cases.

For those reasons, those of us who are concerned with trade union cases and with work injuries and so on are worried about the impact that this legislation, if not amended, will have on the possibility of people injured at work being able successfully to pursue compensation cases. The Government sometimes seem determined to prevent individuals who feel that they need compensation pursuing their cases. I sometimes think that they have been taken in by all the publicity in recent years about our becoming a compensation culture. I do not think that that is true at all. It is obviously true that many people feel that, if they are injured at work or through somebody else’s negligence, they have a right to claim compensation for their injury and they therefore looks for means to secure that compensation. Sometimes they go to a union if they belong to one, or they may go to other organisations that provide advice and support to individuals. Those individuals will not feel able to do so if there is a risk that they will not get their case taken, or will be landed with fees that they have to pay themselves because they will not get full recovery, having had to pay the compensation success fee to the lawyer involved.

That is terribly unfair, and I hope that during the passage of this Bill we will be able to table amendments that will deal with some of those concerns. Some of the amendments in this group will deal with the concerns that I have voiced this afternoon. They were expressed previously when we had Second Reading and I do not want to repeat everything that was said then, but I want to emphasise that I am talking about people who have very little money. When they are injured at work, often the compensation is no more than £3,000, which may not appear to be a very large sum of money, but to somebody working as a cleaner, it is an enormous sum. Certainly, it is not a trivial amount. People with small claims, who feel that they have been injured and are entitled to compensation for their injuries, may have doubts about whether they can proceed, and they will not find people willing to take up their case. That would be a great pity; it would block people’s access to justice. I thought that in any reform, we should be concerned with improving access to justice. The Bill, especially in these clauses, does not do that. I hope that we can amend them during our discussions.