Tories accused of being in insurers' pockets

The Conservative party has been accused of being “nothing  more than the parliamentary wing of the insurance lobby” by Labour’s shadow justice spokesman Andrew Slaughter.

He launched his broadside during yesterday’s House of Commons debate Legal Aid, Sentencing and Punishment of Offenders Bill. MPs passed the third reading of the bill by 306 votes to 228.

MPs also rejected a string of amendments to the bill, which implements the bulk of the Jackson review of civil litigation costs.  

The proposed changes included allowing unsuccessful claimants in libel cases to recover their legal costs and a Labour move to exempt membership organisations, including trade unions, from new rules scrapping recoverability of costs in legal cases.

In his speech criticising the government’s proposals, Slaughter said: “There was a time when the Conservative party worried about access to justice, but now it appears to be nothing more than the parliamentary wing of the insurance lobby.”

He told fellow MPs that losing defendants and winning claimants would lose as a result of the changes being proposed by the government, while losing claimants would gain.

Slaugher said: “Winning claimants will lose. Victims will have to pay the costs of their insurance and their lawyer’s success fees from their damages—up to 25% of damages, aside from damages for future care, can be taken by the lawyer, and the insurance premium will take up even more of those damages, perhaps wiping them out altogether. To make up for part of those losses, the Government plan a 10% increase in damages for pain, suffering and loss of amenity. Simple maths should be sufficient to show that that will not make up for all losses.

“Losing claimants, including those bringing speculative and nuisance claims, will gain. They will benefit because it is unlikely that they will have to pay the costs of the winning defendant—that is part of the perverse, qualified one-way cost-shifting scheme that the Government intend to introduce when the Bill passes.

“Losing defendants—wrongdoers, in other words—and their insurers will gain. Wrongdoers will benefit, because they do not have to pay the cost of after-the-event insurance or the victim’s lawyer’s success fees, thus limiting their liabilities and those of their insurers. Winning defendants will lose out. A winning defendant will no longer be able to reclaim the cost of their defence, thanks to qualified one-way cost shifting. To summarise,winners lose and losers win. That is simply wrong.”

Justice minister Jonathan Djanogly hit back by accusing Labour of changing its minds on the Jackson review, citing justice secretary Jack Straw’s pre-election move to clamp down on insurance for claimants in libel cases. He said: “The sands seem to have been shifting dramatically in the Labour camp on this issue.”

He also defended the overall thrust of the reforms. “We are not proposing to end conditional fee agreements or no win, no fee deals. What we are addressing is the substantial legal costs that go to lawyers under the current no win, no fee regime. Our reforms are designed to make these legal costs more proportionate, while enabling meritorious claims to be brought.”