Bill Esterson MP is writing to government ministers about plans which may see a big reduction in access to justice to motorists following road traffic accidents.
Bill met with a number of constituents who work in the legal profession who have pointed out that changes to the law on fixed costs and small claims mean that legal advice will not be available to those people who are involved in the vast majority of road traffic accidents. This will apply to both damage to their car or injuries which are sustained in an accident.
Here the MP outlines the issue:
The government is proposing to increase the small claims limit in personal injury matters from £1,000 to £5,000. Currently, motorists can ask a solicitor for help under no win no fee arrangements as legal costs can be recovered if their case is successful. The Government is already planning to reduce the level of the recoverable fees in such matters, in April.
Now the government plans to raise the small claims limit in injury matters to £5,000. This will mean that all claims except the most serious ones will have to be settled direct with insurance companies. If a motorist wants to go to court under the present system, they can recover their legal costs from the “at fault” insurance company, if they win. Under the new proposals, solicitors won’t be able to afford to give them advice because for claims with an injury worth under £5,000 legal costs would not be recoverable.
The consultation on the proposed measures closes on the 8th March 2013, just 14 working days before other civil justice reforms come into force, including a 60% reduction in the amount of recoverable costs in road traffic accident matters, mentioned above, and the removal of legal aid in all but a few small areas of law.
When insurance companies refuse to pay, at present, a motorist can go to court with the support of an expert solicitor who will help them win their case. Under the new proposals, the motorist will have to go to court on their own, facing the legal experts employed by the insurance company. It’s a real 'David and Goliath' situation and the real loser is the accident victim.
The fear is that many people will simply not go to court and will either accept a pay-out much lower than they should or they will give up. Either way, the insurance company will benefit and the motorist will lose.
The government says this is to reduce fraud and to cut the cost of road traffic accident legal fees and that the saving will be passed on to the motorist in the form of lower insurance premiums. Yet the insurance industry has already said that premiums will go up regardless. All that will happen is that insurance companies will make more money and motorists will be paid less when they are involved in an accident.
There are a number of solicitors who specialise in helping motorists with road traffic accident claims. These people will not be able to stay in business. They already face a massive reduction in the amount they can recover in cost. The reality is that insurance companies delay processing and paying claims and that is the reason for high costs, under the current regime.
Firms of solicitors employ many people across Crosby, Maghull, Lydiate and Formby. These people will lose their livelihoods and their families and the local economy will suffer.
Thousands of motorists stand to lose money with this proposal in my constituency each year. Dozens of people will also lose their jobs, all so the insurance industry can benefit. The answer is to make the insurance industry process claims more efficiently, not to penalise motorists, reduce access to justice for the man in the street and drive solicitors out of business.
So why would the government do this? The insurance industry gives hundreds of thousands of pounds each year to the Conservative Party. This is a scandal and the government knows it. I will be raising this issue in parliament. The legal profession has applied for a judicial review of the proposed cost reductions on the basis that the consultation process completely excluded representatives from the legal profession and accident victims. Anyone who is a motorist, stands to lose out from this change and it is clear that the promised cut in premiums is not going to happen. The Conservative Party is taking money direct from motorists and yet again motorists will lose out.