David Cameron today announced plans to cap lawyers’ fees from personal injury claims at £25,000. Speaking to an audience of small companies, the prime minister launched an attack on the so-called compensation culture and blamed it for holding back the growth of UK businesses.
The extended cap will add to measures to restrict no win, no fee cases following last year’s Jackson proposals, which are expected to become law in October. The current cap is at £10,000 and applies only to road traffic accidents. The new plan is to raise the cap to £25,000 and extend it for public liability and employers’ liability claims, the prime minister’s spokesman said.
While no details are yet available, Cameron's ideas seem to be in line with Lord Young's report last year into the 'compensation culture'. The report recommended introducing a simplified claims procedure for PI claims along the lines of the RTA portal as well as examining the option of extending the upper limit for road accident PI claims to £25,000.
Downing Street said the government wanted to deter ‘speculative’ health and safety claims made against businesses that would appear not to have done anything wrong. Cameron said he is ‘waging war’ against the ‘excessive health and safety culture that has become an albatross around the neck of British businesses’.
He added: ‘Talk of ‘health and safety’ can too often sound farcical or marginal. But for British businesses - especially the smaller ones that are so vital to the future of our economy - this is a massively important issue.
‘Every day they battle against a tide of risk assessment forms and face the fear of being sued for massive sums. The financial cost of this culture runs into the billions each year. So this coalition has a clear new year’s resolution: to kill off the health and safety culture for good.’
As well as capping fees, the government has announced that health and safety laws on strict liability for civil claims will be changed so that businesses are no longer automatically at fault if something goes wrong.
Letters will be written to the chief executives of all major insurance companies, asking them to set out how they will ensure their levels of compliance do not force businesses to go beyond what is required by law. The executives will be summoned to Downing Street for a meeting next month to set out their plans.
The Association of Personal Injury Lawyers expressed 'grave concerns' at the government 'pushing through too many swathing changes to the system at once'.
David Bott, president of the association said 'The danger is that workers could be exposed to an unnecessary risk of injury and then be left with a civil justice system which cuts them off from their right to full and fair redress. Instead of watering down the rules, which are designed to protect workers, businesses should be made to feel confident in the knowledge they have nothing to fear from litigation provided they take reasonable steps to prevent needless injury. Any fear businesses have should be for the welfare of their staff, not legal costs.'
However insurers welcomed the prime minister's speech. Otto Thoresen, director general of the Association of British Insurers, said: 'The government is to be commended for grasping the need to tackle our compensation culture. We are pleased that the government will be extending the cap on the amount lawyers can earn from small value personal injury claims. We have long campaigned for reforms to halt the compensation bandwagon to reduce frivolous claims and excessive legal costs.'