OK – so we’ve been covering the fantastic news that referral fees for claims, such as referrals through legal expenses insurance / motor legal protection where your insurers will ‘sell’ your details on to a third party solicitor for cash, which forms part of a government agenda to make the world of compensation claiming more efficient.
One of the other areas has been surrounding the cut of the legal aid bill and potential changes to the no win, no fee system. The gist and result of the whole idea will result in a reduction in the number of payouts, which I imagine is intended for the costs of insurance to lower; although I’d love to see the day the insurers pass on saving to the consumer!
But, back to the main topic, sadly, proposals in place involve shifting some of the costs of the no win, no fee system to the Claimant from the Defendant. We strongly oppose such a notion, as it will result in innocent accident victims having their payouts slashed to cover costs the Defendant, i.e. the person or party at fault for the injuries, will no longer have to pay the full amount.
Whilst I won’t go in to the ins and outs of what this means, I will comment on sources form the Guardian (http://www.guardian.co.uk/politics/2011/sep/20/justice-minister-companies-shares-legal-aid) whom have triggered an investigation as it turns out there are some potentially political conflicts of interest in saving the insurance industry a whooping £1bn a year if the moves are to go ahead!
But, that is not all Mr Jonathan Djanogly, justice minister, is currently piloting the plans to cut personal injury payouts and reduce legal aid funding. As it just so happens, Mr Djanogly, by pure an absolute coincidence, happens to have investments worth at least £250,000 in the insurance industry!
All these savings the insurance industry will benefit from means the investments he has could be set to become far more healthier than they are already are. According to the source, Mr Djanogly is one of the ten richest MP’s in the country, and is also heir to a £300m fortune through his family’s insurance underwriters, Djanogly Family LLP. It’s fair to say that the man has a very sizeable personal stake in the insurance industry which is set to financially benefit from bills he is the head of pushing through.
The source goes on to say that his brother is in the claims management industry, profiting from selling accident victims details on to lawyers for compensation claims. Let’s hope that the bid to ban the referral fee system doesn’t suddenly become hampered by the influence of a conflict of interest. Not that I’m suggesting anything…
Whatever you believe, or whatever your take on the story is, the point I wish to make here is that there is much, much more to these changes and bills then meets the eye; and a lot of it may come down to who is going to benefit the most. OK, there may well be a reduction in insurance costs to the consumer if Claimants end up having to pay out of their own pocket for claims; but how is that fair for the Claimant, i.e. the injured innocent victim, and how do we know the proportionality of reduction will be fair? I personally have no doubt that the insurance companies profit margins will benefit from such moves.
What needs to be looked at for these reforms is who should pay, and who shouldn’t have to pay; how can we make things more efficient, and how can we keep things fair. It’s a difficult situation to balance. But I will firmly place my feet to down on the idea that Claimants shouldn’t have to lose out any of their compensation for a claim. To lose even a single penny means they haven’t been fully compensated for their suffering, and are therefore at a loss because of someone else’s negligence.
How is that fair?
I’ll certainly be keeping my ears to the ground on this one…
