The government is willing to listen to reasoned arguments – it just depends who’s making them.
The Ministry of Justice has had its critics in recent years, but there’s one thing we can all agree on: the department is not one for backing down.
Chris Grayling in particular has been most impressive in his dogged ability to cast aside the sniping and press ahead dogmatically, however much people tell him he is wrong.
Which is probably why it came as such a shock to see his sidekick justice minister Shailesh Vara announce that the no-win, no-fee regime introduced by the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) will not, 'for the time being' be applied to insolvency proceedings.
Vara, incidentally, must surely have done enough to guarantee a Cabinet post in any future Tory government. The poor man seems to be Grayling’s night-watchman, constantly sent in to hostile situations to make unpopular or embarrassing announcements. The justice secretary, meanwhile, sits back in the pavilion with his bat already packed away for the night.
But I digress. The government’s reasoning yesterday was as flimsy as it was short. The delay of LASPO application is to give practitioners more time to prepare for and adapt to the scrapping of no-win, no-fee agreements. The government, it was noted, now agrees that more time is needed.
This is an act that came into force in April 2013. The Jackson report on civil litigation was published in 2010. If insolvency practitioners aren’t ready for the change by now, they never will be.
So what other reason could there be for such an uncharacteristic moment of indecision?
As ever, it seems, money has talked.
The most affected unsecured creditor by LASPO changes would be the government itself in the shape of HM Revenue & Customs. The MoJ would, in effect, be cutting off the Treasury’s nose to spite its face.
I understand secretary of state for business Vince Cable has had business groups banging on his door for some time warning of the effects of LASPO on claims by their members.
It’s a fair guess that Cable and chancellor George Osborne will have had a quiet word with Grayling in recent weeks and asked him to reconsider his plans.
The truth is the lobbying power of insolvency groups has far outdone those of those representing, for example, personal injury claimants. We’re now in the bizarre situation where the government feels it necessary to protect creditors from LASPO but not people suffering from catastrophic injuries (mesothelioma apart).
Is LASPO fair or not? Does it reduce unnecessary costs or not? The exemption will be widely welcomed by most in the insolvency sector, but it leaves a bitter aftertaste. It is literally one rule for creditors owed money and another for the rest.
John Hyde is Gazette deputy news editor