Dispelling the myth of 10 years of a compensation culture
In a decade since the extension of no-win no-fee rules to civil court cases, Richard Norman, partner and head of personal injury at leading south Wales law firm, Leo Abse & Cohen, looks at the perception that the notorious conditional fee agreement now has and the burgeoning compensation culture now facing the UK.
"When the change in law was first introduced in 1998 it was designed to give better access to justice for all people, whatever their circumstances. In ten years it has had quite an impact, and in many ways has achieved what it set out to. However, along the way, public perception has been adversely affected and the profession tainted by the publicity surrounding certain types of claim, particularly those of a spurious nature. Many people now assume that substantial payouts are given for trivial accidents, that most Claimants are "on the make" and believe that we are now living in the midst of what's frequently termed as a 'compensation culture'.
"Amongst all of this, the legal profession has come under some serious scrutiny and it's integrity questioned. The Access to Justice Act which came into force in April 2000 dramatically increased the attractiveness of no-win no-fee agreements as judges could order the losing side shoulder the extra costs associated with conditional fee cases. These are the fees charged by the Claimant's lawyers to compensate for the possibility of losing and therefore, ending up with nothing. Working for nothing is not a prospect that attracts, hence the additional success element. Legal aid for personal injury cases (with the exception of Clinical Negligence cases) was abolished, making a conditional fee agreement many people's only hope of justice.
"Hand in hand with this came the advent of claim management companies acting as middle men, marketing their services in ways that solicitors were in fact prevented from doing by their Professional Codes of Conduct. They have advertised relentlessly and aggressively all adding to the perception that we're living in a claims society, with the knock-on effect of tarnishing the reputation of personal injury lawyers, perceived to be willing partners and hungry for a piece of the action.
"The reality is that in the vast majority of instances, nothing could be further from the truth. Crucially the Government delayed in introducing a Regulatory Body and Code of Conduct to regulate the activities of Claims Management Companies, allowing them to build up a head of steam it has been difficult to stop. It took until 2007 for action to be taken and in the meantime the personal injury market and its reputation took a pounding. Swifter action from the Government could have prevented much of what we have seen.
"So it is no surprise that in many people's minds it is not "no-win no-fee" but "all-win all-fee" for lawyers, but what people don't understand is that for every case that's won, there is a case that's lost. Solicitors are up often up there with other maligned professions in getting a bad rap for making money but as professional people we have to accept that the reality is we are a modern day business giving access to law and we don't win them all.
"It's true that the increase in the number of six figure cases does nothing to help this perception. What people don't think about is that these cases are usually awarded to people who have been permanently damaged for life and the sum is designed to cover life expectancy for these people that will never work but need a lifetime of care provision. The controversial claims often make the front pages, but rarely do you hear talk about how compensation can actually help people to re-build their lives to cater for new needs as the result of a horrific accident.
"It's also important to remember that while the average personal injury payout may have risen the number of cases hasn't. Statistics from the Compensation Recovery Unit show that accident cases have remained fairly stable in the last few years and, if anything, the introduction of no-win no-fee has coincided with number of cases levelling off.
"At Leo Abse & Cohen we deal with hundreds of cases every year and have been doing so for over 50 years. On those occasions where clients are unsuccessful, we understand that that's the nature of the game, but we don't take cases for the sake of it. We have a responsibility to act as a filter and look at each case on a case by case basis, not every case is going to make court, each case is taken on its merit not just what the outcome might offer. If anything we have more of an interest in ensuring there are no costly delays.
"This year the firm is taking a big step and has taken the decision to move into TV advertising. It's something we have thought long and hard about, but in a faceless market of claims firms fighting to get the best compensation whatever the case, we know that people want to deal with a local and knowledgeable name.
"All people have a right for access to justice, for every action there's a reaction and some of these cases are sensitive, people want to talk to people that understand that, have the experience and can provide the legal advice. Our bi-lingual concepts concentrate on looking at our Welsh heritage as well as common claims facing most people and how they can be best dealt with. At the end of the day, we're trying to inject some credibility back into the industry, into the way that solicitors do business in an increasingly competitive market."