Lord Neuberger (pictured), president of the Supreme Court, warned this week of the risk of lawlessness as a result of the government cuts in civil litigation funding being introduced in the Legal Aid Sentencing & Punishment of Offenders Act 2012 (LASPO) due to be implemented on 1 April 2013. He said the reforms will restrict access to justice and could prompt clients to take the law into their own hands.
Lawlessness and a loss of confidence in the justice system has been the concern of many within the Professional Negligence Lawyers Association (PNLA) in relation to the problem of rogue professionals. These concerns were raised within the parliamentary debates on this legislation, notably by Lord Bach who said: ‘The perpetrators of the payment protection insurance misselling scandal - the mortgage misselling scandal of the 1980s and 1990s which noble lords will remember - and thousands of other instances when rogue professionals have abused their position of trust, will go unpunished and unheard. Their victims will multiply in a system where those who have been wronged are dissuaded from taking action against rogues, knowing that parliament will have legislated to substantially limit their rights to redress. It would be something of a rogues’ charter.’
Complex claims for under £100,000 will be the most vulnerable to LASPO Part 2, which abolishes recoverable success fees and after-the-event legal expenses insurance premiums. Professional negligence claims frequently fall into this group. Key concerns for solicitors about this particular area of practice include:
1. Higher costs for professional indemnity insurers – claims must be defended under the usual terms of such policies and the self-represented can run up many hours of ‘defence costs’. A surge in the self-represented could put pressure on higher premiums.
2. Reduction in claims – this might, on the face of it, be regarded as beneficial to professionals but the angry and aggrieved claimants who will no longer have affordable access to justice could cause different problems for a local professional. It is experimental how claimants will react after many years of available affordable dispute resolution procedures. Some claimants may decide to walk away but it seems optimistic to think the ‘compensation culture’ genie can be put back in the bottle in the short term.
3. Legal Ombudsman – clearly there are technical issues where a consumer determination is not appropriate. More technical referrals to the ombudsman at the increased compensation level of £50,000 (with greater fees to lawyers per complaint) may become more expensive and uncertain compared with the more established use of the professional negligence pre-action protocol.
4. Encouragement of negligence and dishonesty – those few rogues within the professions will find it more tempting to take advantage of those unlikely to be able to afford to bring claims.
5. Risk management – predictions are that professionals will find it increasingly difficult to address risk with reference to published ombudsman decisions and case law developing with claimants as self-represented.
Lord chancellor Chris Grayling has made repeated assurances to the PNLA that alternative costs protection measures are being looked at by the government and said he has an open mind on qualified one-way costs-shifting (QOCS). Shadow justice minister Andy Slaughter tabled a question regarding these proposals: ‘To ask the secretary of state for justice whether the government will offer costs protection to claimants in professional negligence cases following the implementation of Part 2 of LASPO in April 2013; if any such measures will include (a) QOCS; (b) alternative dispute resolution in the pre-action protocol; and (c) a statutory adjudication procedure as already used in construction disputes; and if he will delay implementation of Part 2 of LASPO in professional negligence and liability disputes until some costs protection is available.’ (Hansard source (Citation: HC Deb, 21 January 2013, column 52W))
Justice minister Helen Grant responded on 21 Jan 2013: ‘Costs protection - in the form of QOCS - is being introduced from April 2013 for personal injury cases (including clinical negligence) only. The government announced on 12 December 2012, Hansard, column 39WS, that it will delay implementation of the provisions in Part 2 of LASPO for defamation and privacy proceedings until a costs protection regime has been developed.
‘Costs protection will not be available in other proceedings, including professional negligence, when the relevant provision in Part 2 of the act comes into effect on 1 April 2013. However, the government will keep under review whether to introduce costs protection in other areas of litigation, in the light of the experience of QOCS.’
More recently, Grant has stated that she will consider a proposal from the PNLA about adjudication.
Lord Neuberger’s concerns about the future, and his fears of a lawless society, are a significant if somewhat belated warning that the tide has been turned towards helping rogue professionals. Unless costs protection measures are introduced by the government then it is not only the victims of rogue professionals who will suffer but also professionals themselves through deteriorating professional standards and the inevitable loss of public confidence.
Katy Manley, is president of the Professional Negligence Lawyers Association