Why is government so keen to kill the PI sector?

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When the Ford Transit plant in Southampton was at risk of closure last year, with 500 jobs under threat, David Cameron’s government offered a £10m grant.

Yet when it comes to the personal injury sector, Cameron has not just stood aside and let it happen, he’s handed the grim reaper his scythe and told him to hack away.

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Make no mistake, the government is going to be responsible for the loss of thousands of jobs.

This week I have been inundated with emails and calls from law firms with horror stories of mass redundancies and decimated offices. I’ve had one solicitor in tears asking what exactly they had done to deserve such swift retribution.

Virtually every firm has told me their headcounts will at least halve. Law Society chief executive Desmond Hudson estimated that 20,000 solicitors are involved in PI: at a rough guess, that’s 10,000 solicitor posts gone, almost overnight.

And it’s not just solicitors – who are unlikely to elicit much public sympathy – but secretaries, receptionists and cleaners. It’s the sandwich shop across the road, the childminder looking after children while parents work, the barman serving them at the office party. It’s an entire network of small businesses and hardworking people who will be adversely affected.

And for what? It seems to me we all – government, lawyers, mouthy journalists – want the same three things: fewer of those terrible daytime TV ads, reduced car premiums and a fair crack of the whip for injury victims. None of these ambitions will be realised.

The claims culture will thrive – maybe even grow – once solicitors are ejected from the club. Claims management companies will simply pick up the slack, do the work on the cheap and churn out cases without any regard for those involved. Your daily dose of Jeremy Kyle will have more PI adverts than ever.

Reduced car insurance premiums? Don’t make me laugh. Even the insurers themselves admit that premiums might – might! – come down by a mere 3%. Let’s say you have a £500 annual premium, that saves you £1.25 a month. Just don’t spend it all at once folks.

As to the third, I agree the claimants’ argument about access to justice looks spurious. The insurers (pot, kettle, black, etc) are right to say this is about self-interest as much as public good. But that doesn’t hide the fact that unrepresented victims are less likely to get what they deserve, never mind clog up the small-claims court with no idea how to advance their claim.

The whiplash consultation on the small-claims limit closes today. I hope you contributed, although I would be amazed if it made even the smallest difference to government policy.

The PI market was bloated. There were lawyers and firms who did the profession no favours. There is clearly scope for contraction of the market – just not so devastatingly quickly.

Justice secretary Chris Grayling may well be glad he escaped the Department for Work and Pensions when he did – his old colleagues are going to have their work cut out very soon.

John Hyde is a Gazette reporter

Follow John on Twitter

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