Young report seeks to curb compensation culture

The volume and content of personal injury advertising should be controlled, but there will be no outright ban, Lord Young has recommended in his report on the ‘compensation culture’ published recently.

In Common Sense, Common Safety, Young also proposes that the road traffic accident (RTA) personal injury process, launched earlier this year, should be extended to include other personal injury cases. He suggests that the compensation limit for cases under the RTA scheme – currently £10,000 – should be upped to £25,000.

The report does not call for a ban on referral fees, but instead recommends restrictions on the operation of referral agencies.

The Prime Minister David Cameron said that he and his cabinet have accepted all of Lord Young’s recommendations.

David Cameron said: ‘A damaging compensation culture has arisen, as if people can absolve themselves from any personal responsibility for their own actions, with the spectre of lawyers only too willing to pounce with a claim for damages on the slightest pretext. We’re going to curtail the promotional activities of claims management companies and the compensation culture they help perpetuate.’

It appears that they are yet to be woken up to the fact that the claims culture has long been established and a compensation culture has been curtailed by the demise of companies such as The Accident Group and Claims Direct.

Young said: ‘Lawyers are incentivised to rack up high fees secure in the knowledge that they will be charged to the losing party. Clearly, it is right that people who have suffered an injustice through someone else’s negligence should be able to claim redress. It is a basic tenet of law and one on which we all rely. What is not right is that some people should be led to believe that they can absolve themselves from any personal responsibility for their actions, that financial recompense can make good any injury, or that compensation should be a cash cow for lawyers and referral agencies.’

There appears here to be a misunderstand that the costs of Lawyers investigating the claims are so high as a result of chance defences and Pre Action Protocols which are at the root cause. The Ministry Of Justice will of course accept no responsibility for their part in this and instead blame Solicitors, the real Consumer Champions for an alleged claim for costs as a result of the work required to obtain proper compensation.

In the report, Young says that he has written to the Advertising Standards Authority (ASA) and Solicitors Regulation Authority, asking them to check that personal injury advertising complies with their codes of conduct.

‘Alongside claims management companies, personal injury lawyers themselves are also directly responsible for a large amount of advertising,’ he says. ‘In my view they are every bit as much of a problem as claims management companies… [Existing] regulations do not go far enough: they allow [claims management] companies and personal injury lawyers to advertise in such a way that encourages individuals to believe that they can easily claim compensation for the most minor of incidents and even be financially rewarded once a claim is accepted.

‘I am in no doubt that the payment of referral fees and the accompanying culture that sees claimants rewarded before the legal process has even begun creates a climate in which businesses, the public sector and even voluntary and charity organisations fear litigation for the smallest of accidents, and then manage risk in accordance with this fear.’

Downing Street announced a ‘Whitehall-wide review of the operation of health and safety laws and the growth of the compensation culture’ on 14 June. As adviser to Cameron on health and safety law and practice, Young was tasked with investigating ‘concerns over the application and perception of health and safety legislation, together with the rise of the compensation culture over the last decade’.

Young said soon after the review was announced that he wanted to ban TV advertising by personal injury claims firms, but it was predicted that there would be no outright ban on personal injury television advertising, to do so would be a restriction in trade.

The new RTA claims process was introduced by the Ministry of Justice to speed up RTA claims between £1,000 and £10,000 and reduce their cost.

It appears that the Senior Judges of this country are trying to damage the legal industry which for the past number of years have happily been their paymasters. Let us not forget that Solicitors and Claims Management companies breathe life into the Court Service. Without them being the champions for the rights of Claimants, a vast number of Judges would be unemployed. The old saying of biting the hand that feeds might one day be accepted but by then, it might be too late.

In simple terms leave this hard earning and necessary industry alone.

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