Solicitors have welcomed the government's conclusion that the UK compensation culture is a myth, and have also supported its threat that claims farmers should face a 'last-chance saloon' on regulation unless they conform to set standards.


Unveiling the government's response to the Better Regulation Task Force's report on personal injury litigation last week, the Lord Chancellor, Lord Falconer, said he did not believe there was a litigation-happy society in the UK as personal injury claims had dropped by almost 10% in the past year.



However, he said it had come to the point where claims management companies should regulate themselves voluntarily and effectively or face a more formal set-up. He also complained that marketing techniques such as placing adverts in hospitals were sullying the reputation of the legal profession.



The government will now set up a cross-departmental steering group to look into taking the task force's recommendations forward. Lord Falconer said it would examine increasing the small claims court limit for personal injury cases, as well as better use of rehabilitation, health and safety guidelines and risk management procedures. He also called for a more rigorous application of the merits test for legally aided cases.



As expected, the Department for Constitutional Affairs dismissed the possibility of contingency fees in the near future (see [2004] Gazette, 11 November, 3).



Colin Ettinger, president of the Association of Personal Injury Lawyers, welcomed the findings but called for the immediate regulation of claims managers. He added: 'Personal injury cases have no place in the small claims court, as even smaller value cases are complex and can't be handled properly without legal guidance.'



The Law Society said any move to regulate claims managers should be agreed by the Office of Fair Trading. 'Claims farmers are answerable to no one and the public has no comeback if their performances are shoddy,' chief executive Janet Paraskeva said.



Speaking at a conference run by Insurance Times magazine last week, Anthony Burns-Howell, chief executive of the Claims Standards Council, said it wanted to be an 'effective voluntary regulator'. However, he argued that claims farmers were not the only ones at fault, complaining that law firms were guilty of sins such as breaching the code on cold calling and should also be pulled into line.