Legal Aid, Sentencing and Punishment of Offenders Bill

Memorandum submitted by the Association of Personal Injury Lawyers (APIL) (LA 64)

Introduction to APIL

1. The Association of Personal Injury Lawyers (APIL) is a not-for-profit membership organisation, established more than 20 years ago to fight for the rights of people injured needlessly, through no fault of their own. We all have a responsibility to ensure we do not injure other people, and this is even more important in circumstances where the individual is directly in the care of another, such as in the workplace, in our hospitals and schools. Where those responsibilities are neglected, however, and injury occurs as a result, the injured person has a right to proper redress, paid for by the wrongdoer, who must be held to account.

Executive Summary

2. Removing legal aid for clinical negligence will restrict access to justice for the most vulnerable.

3. Ending recoverability of the success fee and the ATE insurance premium from the wrongdoer will mean the wrongdoer will be rewarded, and the injured person will be penalised. It will make justified claims below a certain figure uneconomic to run, restricting access to justice.

4. Some injured people with complex cases will not be able to find a solicitor who can risk taking them on. Industrial disease cases, for example, involve complexities such as the need to establish which employer was involved, whether more than one employer was involved, and when the claimant became aware of the disease.

5. Victims of clinical negligence will be hit particularly hard as not only will they be unable to gain access to legal aid, they will also face the prospect of having money taken out of their damages.

6. These reforms will disadvantage people who have been injured as a result of someone else’s negligence, and will only save money for the insurance industry. This is neither fair nor just.

7. Conditional fee agreements have provided access to justice to people like critically injured Client A, whose case is outlined at the end of this evidence.

The need for legal aid for clinical negligence

8. Access to justice is one of the key principles of a modern democratic society, and legal aid provides access to justice for the most vulnerable people.

9. Legal aid should be retained for all clinical negligence cases. Removing legal aid for clinical negligence cases will remove access to justice for the most vulnerable people who have been injured through no fault of their own who, in most cases, are seeking medical treatment to make them better. These vulnerable people, who will no longer be entitled to legal aid, will then suffer as a result of the proposed changes to ‘no win no fee’, which will often result in money being taken out of their damages to pay towards their legal fees. Worse still, in complex cases it may be difficult to find a lawyer prepared to run the case at risk.

10. The cost to the Government of funding clinical negligence cases, out of a legal aid budget of £2.2 billion, is £17 million [1] . Removing clinical negligence cases from scope would save less than one per cent of the legal aid budget.

11. The National Patient Safety Agency was notified of more than one million adverse incidents between April 2010 and March 2011 [2] . During the same period, however, only 8,655 clinical negligence claims were brought against the NHS [3] . This means that less than one per cent of potential claims were brought against the NHS.

The importance of conditional fee agreements (CFAs): research findings

12. APIL commissioned joint research with the Access to Justice Action Group (AJAG), and this research showed that the overall majority of CFA users are people of average means. The research, conducted by ICD, reveals that more than half of CFA users earn less than the national average wage (approximately £25,000 per annum). Out of those questioned, more than half received less than £5,000 in compensation. While this is not a huge amount of money to a large insurance company, this is a substantial amount of money to most people.

13. The research also revealed that of approximately three million people in England and Wales who have used CFAs in the last five years, three-quarters have only done so once. This demonstrates that the users of CFAs are only one-time users, and will have no previous knowledge or understanding of the system. They therefore need as much support as the system can give them.

The effect on injured people: research findings

14. APIL has recently researched its own members about the impact of part two of the Bill. This research gives an indication of some of the costs which will have to be borne by the injured person.

15. Part two of the Bill prevents the success fee from being recovered from the losing defendant, the person who caused the injury. Under the current system, the claimant’s solicitor recovers the success fee from the losing defendant, and this fee is reserved to help compensate for cases which are ultimately lost (and for which no fee is payable), and discourages solicitors from ‘cherry picking’ only the most straightforward winnable cases. The Bill puts an end to recoverability and forces the solicitor to take the success fee (which will be capped at a suggested 25 per cent of the damages awarded for pain and suffering) out of the damages awarded to the injured person.

16. Not only will the injured person lose out by having money taken from his damages, but a capped success fee may prevent the solicitor from taking on a case in the first place, so that an injured person with a riskier, or more complex (yet meritorious) claim will be denied access to justice. In industrial disease or clinical negligence cases, for example, it can be very difficult for the solicitor to know at the outset if the claim is likely to succeed. As a result of these proposals, the solicitor may find it more difficult to commit to the initial investigations and reports needed to establish the chances of success.

17. The Bill also prevents the after the event (ATE) insurance premium from being recovered from the losing defendant, so the costs will have to be met by the injured person. If the claim is as a result of clinical negligence, the claimant will have to pay about £5,000 for an ATE insurance policy. In terms of other types of cases, a claimant will have to pay £400 for a road traffic accident (RTA) case, and £1,000 for a public liability (PL) case. £5,000 could be almost half a year’s wages to somebody earning minimum wage, and this could be a barrier for someone who needs to make a claim, and who may be unable to work again.

18. This research also revealed that it would be harder to find a solicitor to take on a personal injury case if this Bill were to be passed. Under the new proposals, those APIL members who responded said they would only be able to take on an employer liability case if it had a 65 per cent chance of success, a road traffic accident case if it had a 60 per cent chance of success, and a public liability case or a clinical negligence case if it had a 70 per cent chance of success. Solicitors will be unable to take on meritorious cases which have a lower chance of success, denying access to justice for the injured person.

19. Taking into account the costs which will no longer be recovered from the losing defendant, the research suggests that the injured person would lose, on average, about £2,000 from his damages, £2,000 which has been determined as what is needed by injured people.

20. The Government has said previously that general damages will be raised by 10 per cent to cover the loss of the success fee from the damages. The Government is yet to reveal, however, how such an increase can be put into practice. It is unknown how an increase in damages can be proven if the amount is settled between parties outside of court.

Why should the injured person pay?

21. As a result of this Bill, part of the legal fee would be paid out of the damages awarded to the injured person. This is neither fair nor just. Nobody asks to be injured. An injury can change a life forever and will certainly result in pain and inconvenience. Why should the injured person have to pay the costs which will be incurred as a result of someone else’s negligence?

22. An injured person isn’t bringing a defamation claim for something that has been said in the newspapers, he is bringing a personal injury claim because he doesn’t have a choice.

23. Damages, which are carefully calculated to reflect the victim’s pain, suffering and practical needs, were never designed to include a fee for the injured person’s lawyer, and nor should they. The negligent party, who caused the injury, should cover all the costs incurred by the injured person, rather than the injured person having to rely on the state for support and financial assistance.

Damages will be even lower for injured people

24. By not allowing the success fee or the ATE insurance premium to be recoverable from the losing defendant, the injured person will lose money out of his damages, which are already deemed by many to be too low.

25. The Law Commission, in 1999, made recommendations that damages for pain, suffering and loss of amenity (general damages) should be increased. This recommendation followed a consumer survey and a study by Professor Hazel Genn in 1994.

26. The Law Commission recommendations included that general damages which amounted to more than £3,000 should be increased by at least 50 per cent but no more than 100 per cent. For damages between £2,001 and £3,000, there should be a series of tapered increases.

27. If the recommendations were not implemented within three years, the Law Commission wanted legislation to be introduced to implement the increase. Twelve years on, the recommendations have never been fully implemented.

28. The proposed 10 per cent increase, which was included in the response by the Government to its proposals for reform of civil litigation funding and costs consultation, but not included in this Bill, would therefore not increase damages to the level deemed suitable by the Law Commission.

Regulating referral fees

29. While referral fees are not dealt with in this Bill, APIL is aware that some sympathy has been expressed within Government to have referral fees banned. Should an amendment be tabled, the following views should be taken into account.

30. Most solicitors have reservations about referral fees, including those who pay them. There are, however, serious concerns about banning them, even if that could be achieved at this stage, when they are so well established and when there are issues such as the difficulty of actually defining a referral arrangement.  APIL’s concern in relation to referral fees has always been the protection of the injured person: this protection cannot be achieved by driving referral fees back underground, where we know from previous experience that arrangements would be subject to no transparency or control at all.

31. A knee jerk reaction is not what is required here.

32. APIL notes that the Legal Services Board’s review found little evidence that referral fees cause any harm to consumers’ rights and we support the LSB’s drive for proper transparency in relation to referral fees, along with robust and joined-up regulation. This would create a level playing field with the regulation of lawyers. Strong regulation could look at the reasonableness of fees.

33. This should start with the imposition of a tight rein on the business models of claims management companies, insurance companies and other introducers. To expect solicitors to police the activities of introducers, as is currently the case, is simply impractical. We would like to see the need for written authority to be given every time an individual’s details are passed on.

The importance of CFAs – Client A’s story

34. Client A is now 22 years old. He was nine when his mother was told that he would spend the rest of his life ‘like Christopher Reeve’ following a botched blood transfusion in hospital.

35. Client A was born with scoliosis (curvature of the spine) and a diaphragmatic hernia, which was repaired at birth. After a successful operation to help straighten his spine, he was given a blood transfusion appropriate for an adult rather than a child. He was left paralysed below the upper part of his chest, with very limited movement in his arms and no movement in his hands.

36. After years of struggling to bring a legal claim, and with the case looking hopeless, legal aid was eventually withdrawn. It seemed Client A had little hope of a meaningful future, until Client A’s mum found a solicitor who was prepared to take his case on and was successful in obtaining the substantial award Client A needed to start putting his shattered life back on track. The case was funded through a ‘no win no fee’ agreement.

37. "Client A’s case was incredibly complex and difficult, not least because liability had not been admitted by the hospital at any point following the blood transfusion," said Client A’s solicitor. "Under the terms of this new Bill, I could never have acted for Client A. The risks were simply too high to justify a limited success fee, so Client A and his family would have had to rely on the state for help, while the negligent party remained unaccountable for the negligence which caused his injuries."

38. "Money isn’t everything," said Client A’s mum. "But it’s bought my son the things he needs, like proper housing, a decent wheelchair and other special equipment which helps him to cope. It’s helped to give him confidence in what he can do. He’s able to go to college and it looks like he’s headed for a career in computers. He’s also now able to pay for a team of professional carers who look after him 24 hours a day, seven days a week.

39. "Without this money, I would never have had a life of my own, and neither would my other children. This sort of thing doesn’t just affect one person – it affects the whole family. And the kind of life my son was facing would have been so intolerable for him, he has told me he would have killed himself."

September 2011