We reproduce below our letter today to the Ministry of Justice who are consulting about introducing fixed fees recoverable by Claimant's in claims for personal injury. These fees will make it uneconomic in many cases for solicitors to represent their clients properly and for that and other reasons we are opposed to the proposals:-
"Bridget Kebirungi
Ministry of
Justice
4.22
102 Petty
France
LONDON SW1H
9AJ
Dear Madam,
Response to Extension of the RTA PI Scheme: Proposals on Fixed
Recoverable Costs (Helen Grant MP – Consultation Letter of 19.11.2012)
Our firm responds to Ms Grant’s
consultation document of 19.11.2012 as follows:-
1. Our firm does not pay
referral fees. We do however, like any
commercial enterprise devote some funds to marketing. Therefore an arbitrary cut to fixed fees on
the supposed basis that all lawyers pay referral fees is wrongly concieved. The insurance companies on the other hand are
allowed to spend millions of pounds each year marketing (even though, in the
case of motor insurance it is mandatory),
and so it seems grossly unfair that the Government should decide that
marketing to encourage citizens to pursue legitimate claims against insurers
should be severely restricted, while
peddling insurance products is not.
2. Our firm has provided
professional legal services in Hackney to individuals and businesses for over
100 years. The fixed fees proposed will
effectively make much personal injury work uneconomic for solicitors to
undertake while still complying with our professional duties as defined by the
Solicitors Regulation Authority which requires,
amongst other things, that
lawyers:-
·
Know their client;
·
Take instructions;
·
Investigate funding options;
·
Provide advice on funding;
·
Carry out checks as to money laundering, ID,
conflict of interest and bankruptcy;
·
Manage client’s expectations throughout the life
of the claim;
·
Updating clients on the progress of their claim
throughout;
·
Advising clients on the merits of the claim and
the value of compensation they can expect to receive and gathering evidence
necessary to make their claim.
3. Your consultation
document does not provide any evidence from the Government to support the
contention that current fees are too high.
As you will be aware, the present
fees were agreed by insurers and claimant’s representatives following
negotiation facilitated by the CJC.
4. The inequality of arms
which already exists between the insurers and injured persons will only deepen
with fixed costs. The incentive on
defendants to narrow the issues in cases is lost where claimants costs are
fixed. Compliance with the Personal
Injury Protocol by defendants is already a problem; however, if fixed costs were introduced there
would be even less of an incentive for defendant insurers to comply. The amount of work involved in each case is
largely dictated by the defendant. They
decide on the issues which the claimant has to prove. Fixing costs therefore does not fix the
amount of work involved. There is a real
risk that as a result of fixed fees, the
work that can be undertaken on each case will be so restricted, that many claimants will not recover the
compensation that they are entitled to and that will prove to be a windfall to
insurers, leaving a side the potential
increase in professional negligence claims.
5. We can see no good reason
why the Government seeks only to fix claimants costs. The defendant’s presently are not to be fixed
and yet they have an equal bearing upon the level at which insurance premiums
are ultimately set. Unrestricted costs
for the defendant means that they will be in a position to draw out the claims
process against the fixed costs recoverable by the claimant, thereby undermining the claimant’s
representation and its quality.
The Free Market
The Government purport to be
economic liberals and supporters of the free market. Everything however that the Government
appears to be doing to restrict claimant’s rights goes against the grain of
liberalism. Instead, the large and monopolistic insurance
companies have entirely dictated the direction of policy to their own benefit
and that of their shareholders. The
impression we have is that the market is being fixed for the already strong and
powerful.
Please be assured that should the
extension to the Protocol, the introduction of fixed fees, and payment of success
fees from damages proceed as planned, we
shall do everything we can to make our clients aware of our opposition to the
changes.
Yours faithfully,
DOWSE & CO"
