A crisis in the civil justice system which could be of the Coalition's making

Are we creating a legal system that serves the interests of the rich?

The Scales of Justice above the Old Bailey (Rex Features)

One has to feel a little sorry for the civil justice system – ignored in the media in favour of its criminal counterpart and traduced by the public for pushing up their car insurance premiums.

Ignored and traduced, that is, until someone needs it. When the negligent behaviour of their employer leads to a life-changing injury, or the surgeon who was supposed to make them better leaves them disabled for life, or the substandard plumber leaves them with leaking pipes and a home in ruins.

Nobody expects to be put in any of these situations, but when they are they are generally thankful for the independence of our judiciary and the quality of our lawyers and proud to live in a country with one of the finest legal systems in the world.

One rule for the rich

Yet government reforms risk creating a system in which civil justice is open only to the wealthiest, while also seeking to implement changes which undermine fundamental and longstanding principles of our justice system.

Shortly after the coalition came into power, the Ministry of Justice made clear its intention to implement reforms proposed to the funding of civil claims by Lord Justice Jackson, a senior judge in the Court of Appeal. The reforms were intended to counter the perceived problem of high legal costs in civil cases, and in particular personal injury claims, which were (according to insurance companies) driving up insurance premiums.

At this stage it’s necessary, I’m afraid, to get a little technical. Most accident claims are funded under a conditional fee (commonly referred to as a no-win, no-fee) agreement, a system introduced to replace legal aid for such cases in the late 1990s. Under such agreements the claimant’s lawyers do not get paid if the claimant is unsuccessful. But if the claimant is successful the claimant’s lawyers can recover a “success fee” in addition to their costs, payable by the other side (usually an insurance firm), as a “reward” for the risks of taking the case under such a funding arrangement.

The system has the effect of making it relatively risk-free for an injured person to bring a claim, but also of pushing up costs in successful cases, often so that they are significantly higher than any compensation awarded.

The government’s reforms– implemented in the Legal Aid, Sentencing and Punishment of Offenders Act 2012 – make two key changes. First, successful claimants will no longer be able to recover success fees from the losing defendant. And secondly, the claimant’s costs which are payable by the defendant will have to be “proportionate” to the compensation paid.

On top of these reforms, the government also plans to extend a system of fixed costs which will apply to the vast majority of personal injury cases. Yet the level of those costs, just announced for consultation, are so low as to make all but the simplest cases almost completely unprofitable.

And therein lies the point that the government simply do not seem to have been able to grasp. Costs in most cases are high not because lawyers invent work for themselves to do, but because they are genuinely complex. Cases often take years to come to court, particularly where the injuries suffered are severe, and a large volume of necessary work is undertaken.

The reason costs often exceed compensation payouts is not primarily because costs are too high but because compensation rates in England and Wales are woefully too low, particularly for more serious injuries.

Crisis

If implemented in full, the government’s proposed changes will lead to an access to justice crisis. Solicitors firms will go out of business, and those that remain will take on only the simplest cases that they know will succeed. Those with more complex cases, often with very serious and debilitating injuries, and without the resources to privately fund their claim will be left without recourse to the civil justice system.

And if one bad bill wasn’t enough, the government is currently in the process of shepherding through Parliament a bill that will strike at the heart of some of the most fundamental principles of civil justice.

The Justice and Security Bill introduces the concept of closed material procedures into civil trials: hearings which are not only closed to the public but also to the claimant, with the judge hearing the defendant’s evidence in private. The claimant and her lawyers can’t challenge the evidence, and if the judge finds in the defendant’s favour based on the secret evidence, the claimant will never know why their claim was unsuccessful.

The Bill is intended to allow evidence to be put before the courts that has the potential, if made public, to threaten national security. But it does so in a way that threatens concepts that are as old as the justice system itself: open, public justice and the right of parties to challenge the other side’s evidence in open court.

Civil justice might not grab the media spotlights like other parts of the system, but it is there to right wrongs for people who have been placed in desperate situations through no fault of there own. The government risks undermining two of the most important principles – open and accessible justice –on which that system is built. That would weaken us as a society and it would be a terrible legacy for a government that came to power promising to strengthen the rights and liberties of the people of this country.