This article first appeared in Modern Insurance Magazine, Issue 37
No-one can have been surprised that the Ministry of Justice should have given Part 2 of its LASPO reforms a clean bill of health. The conclusions follow the government’s myopic view of the claims system, focusing on costs above fairness and justice, as seen only through the prism of the insurance industry.
Like its successor the Civil Liability Act, LASPO reduced justice for claimants and contributed to the incremental shift in favour of the defendant. It cannot be claimed as a success for its own narrow objectives of reducing costs and fraud when further dramatic change is deemed necessary within years.
Even the supposed success of reducing costs is plain wrong. The fall in premiums after LASPO didn’t last and have steadily risen again, sometimes hitting pre-LASPO levels, with a myriad of creative excuses for the increases. Insurers have once again successfully duped the Government that costs are still too high, despite falling claims and costs. This should have confined the current reforms at an embryonic stage to the deleted items folder.
LASPO was too wedded to the ‘one size fits all’ concept, with a detrimental impact on the rights of vulnerable people such as children and protected parties. Many judges do not allow deductions for ATE and success fees, which renders some crucial work simply uneconomical, with whole areas fast becoming a legal desert.
Fundamental Dishonesty and QOCS are fine if used as intended, but there is a clear imbalance in the absence of a similar sanction for defendants, with some using fundamental dishonesty as a weapon. QOCS have generally worked well, although making the process uncertain and more complex, not less so. Referral fee payments have been either rephrased or by-passed by Alternative Business Structures.
Some of the review would be laughable if the future was not so grim. Applauding LASPO for creating a “period of stability” and warning that Government should be “exercising caution to avoid creating unintended consequences” is almost beyond parody. MoJ have embarked on a path that will largely remove claimant lawyers and likely irreparably damage the prospects of accessing justice. The future Civil Liability Act review will undoubtedly be as divorced from reality. By then it will too late and the damage will be done.