Time to ditch discredited PI image

The demise of Claims Direct and The Accident Group highlighted flaws in personal injury work which need addressing, argues Kerry Underwood

'Without fences there would be no thieves' is a phrase familiar to me from my many years as a criminal law practitioner.

Without compliant solicitors' firms - some 700 of them, many of which were prepared to turn a blind eye to the manipulation of clients, and to breaches of the introduction and referral code - the former Claims Direct and The Accident Group would never have succeeded.

Ultimately, both companies were killed off by a combination of the market, that is the public, and the courts with significant help from me, the BBC and The Sun newspaper.

For those of you who have been on Mars for the past three years, I should explain that both Claims Direct and The Accident Group took advantage of the lunacy of recoverability of after-the-event insurance to charge absurdly high premiums in the hope that the liability insurers would be forced to pay.

It was never going to happen, but the courts' rejection of the premium levels would take two to three years - and the clients had already signed Consumer Credit Act agreements, making them liable for the exorbitant premiums.

Thus my quarrel with the panel solicitors is not that they paid for work, but rather that day after day, month after month, they accepted clients who had been led on by the organisations that referred them to these solicitors.

Exorbitant insurance, not payment for referrals, is the evil here.

I do not hear the voice of the apologists now.

Instead, the talk is of 'solicitors regaining the market'.

But why should the public trust the profession in personal injury cases? Why should the hundreds of thousands who might now sue solicitors for the unrecovered insurance premiums (and interest) think of them as anything but co-conspirators with Claims Direct and The Accident Group?

The reality is that the solicitors' profession has a huge image problem in relation to personal injury work.

Instead of being perceived as offering risk-free access to justice, conditional fees are now seen by the public as a dodgy twilight arrangement - something belonging in a John Grisham novel rather than the cornerstone of the English legal system.

Interestingly, such opprobrium does not attach to contingency fees in employment tribunals and Criminal Injury Compensation Authority claims, when the client pays a hefty percentage of damages to the solicitor.

Contingency fees are simple and transparent.So where now? It will take years for the personal injury market to recover - but, in time, fresh clients untouched by the horror of the past three years can be served in a different way.

The new 'CFA-lite' - that is the new conditional fee agreement available since 2 June 2003 - allows solicitors to agree openly to charge only what is recovered from the other side; in other words, the indemnity principle is abolished where such an agreement is in place.

Thus clients can be given an absolute guarantee, in writing, that their damages will not be touched.

In return, the explanation is dramatically reduced.

I suggested this three years ago.

The Law Society should maintain, publish and publicise a list of firms that agree to enter into CFA-lite agreements for personal injury work.

It should also set up a full, open inquiry into this most shameful episode in the profession's history.

Pressure is mounting for a parliamentary or government inquiry.

The Society should get there first and prove that it is capable of self-regulation by producing guidelines for the future.

This government hates lawyers and will use any excuse to attack us even though this situation is largely of Whitehall's making.

If the Society takes a lead on this one and after an inquiry sets out the way ahead for the next 20 years, the cloud may yet have a silver lining.

Playing Pontius Pilate threatens the existence of the profession.

Kerry Underwood is a personal injury specialist at Hemel Hempstead-based Underwoods Solicitors