The lion that didn't roar for access to justice

As you probably know, I am not a big fan of lawyers. But I do have to concede that sometimes lawyers are not the only people who make me angry. It probably isn’t too surprising that one of my targets today is the insurance industry. It’s probably slightly more surprising that the other is Which?, the consumer group that, arguably, made me who I am.

At the Labour Party’s conference in Liverpool this week, I was shocked to learn that Which? has thrown its weight behind the insurance industry in supporting the government’s proposed reforms to the civil costs regime as set out in the Legal Aid, Sentencing and Punishment of Offenders Bill (LASPO).  It seems to share the view that there is too much money swilling around the system and that this is the cause of rocketing insurance premiums.  It must be a novel experience sharing this particular wavelength.

That’s not to say there doesn’t need to be any reform, I’m just not sure I’d be quite so ready to fall into line with proposals put forward by a government that’s clearly very happy with it’s proximity to the insurance industry.  According to the Guardian, financial firms with insurance interests have given the Tories £5.4m in the last decade, £4.9m of that since David Cameron became leader in December 2005.  I’m not suggesting these donations are improper, just that both parties are clearly very comfortable with the arrangement.

Which? has a proud record of improving financial services for consumers, from endowment mis-selling, to unfair bank charges and summary boxes for credit card information, but on civil costs the organisation is in danger of putting the need of consumers for affordable car insurance ahead of those trying to get access to justice.  I find it particularly odd that Which? has been taken in by the insurers as there is so much hypocrisy, if not downright dishonesty, in their position.

Take referral fees.  No-one is actually standing up defending them, but it is insurers, among others, who receive them for passing on claims to solicitors.  They talk a lot about how this means claimants are passed on to the highest bidder like commodities, giving them no choice of lawyer.  They conveniently neglect to mention that consumers also lack choice when claiming legal assistance under their own insurance policy and are instead allocated to a firm by the insurer.

They also talk a great deal about insurance being a social good by spreading the cost and risk to make it affordable for everyone.  But they are quite happy to overlook the role success fees under no win, no fee arrangements play in doing exactly this for lawyers, enabling to take on riskier cases.   And by risky I don’t mean fraudulent or dishonest claims, I mean those that are difficult to prove under the law.  Success fees may need reform, but blatantly refuting their worth is disingenuous at best.

In a somewhat melodramatic flourish at a fringe meeting at the conference, which would have sounded like desperation had the panel not been tipped heavily in favour of the insurers, it was even suggested that unless the system was reformed someone would die.  This because people are deliberately staging accidents in order to make fraudulent claims.

There will, sadly, always be people prepared to try and pull a fast one and commit fraud to get money they aren’t entitled to.  But it’s a minority and the insurers’ fixation on it is disproportionate.  It’s a bit like saying because some people cause death by dangerous driving we should stop everyone driving.   In any case, there is already an effective filter for fraudulent claims:  it’s called a lawyer.

On the other hand, without no win, no fee, many genuine claims would never get to court.  The parents of Milly Dowler wrote movingly to the prime minister about how they feared that without no win, no fee arrangements they would never have been able to sue to the News of the World for hacking into the murdered teenager’s phone.  The UN has also warned that important public interest cases, like Trafigura’s dumping of illegal toxic waste in Africa, would not be brought without no win, no fee arrangements either.

I am also struggling to see how the ABI’s figures add up.  They say that whiplash claims cost £2 billion each year, far more than the NHS spends on treating it.  But Deloitte puts the total cost to the insurance industry for accidents and injuries at £821 million.  The Deloitte report also cites an increase in the number of injury claims from 128,000 to 226,000 between 2001 and 2009.  But the ABI says there are approximately 500,000 whiplash cases every year.  They also say the costs in uncontested injury claims were set to accommodate referral fees, when in fact the costs were agreed before referral fees were allowed.

If you’re confused by all this, so am I, despite repeated attempts to get my head around it.  That’s probably what the insurers, and the government, want to happen. And no, I haven’t suddenly decided to believe everything lawyers tell me about how this system works and the impact LASPO will have.

But I do know this:  if I was injured in an accident that wasn’t my fault, I wouldn’t trust the insurance company of the guilty party to offer me the proper compensation without a lawyer fighting my corner, after all, I don’t know what I’m entitled to.  And it also doesn’t seem right to me that if I was injured in an accident that wasn’t my fault I should have to pay my lawyer out of my damages, since these are compensation for my injury.  And I don’t want to be made to feel guilty for bringing a claim for an injury that wasn’t my fault.

The insurers aren’t going to change their tune, and it’s unlikely the government will either.  But I would urge Which? to reconsider their position if they don’t want to be labelled as the campaign group that helped this unholy alliance further erode access to justice.