On 21st June 2011 the Government released its flagship justice Bill. The Legal Aid, Sentencing and Prosecution of Offenders Bill focuses on a number of key areas including reforms to the sentencing and punishment system, abolishing the Legal Services Commission, reversing the position under the Access to Justice Act 1999 whereby legal aid is available for any matter not specifically excluded and, most importantly for anyone suffering with an asbestos related condition, changes to civil litigation funding and costs.
The Government believes that Defendants have to pay too much when it comes to the costs of civil litigation and hopes that the reforms will allow the risks of litigation to be rebalanced between Claimants and Defendants.
Currently, personal injury claims, including industrial disease claims for those suffering with asbestos related conditions, are often pursued using a Conditional Fee Agreement (CFA). These are often referred to as “no win, no fee” agreements as the Claimant Solicitors only have their costs paid if they win the case. To save expensive bills in cases which are lost, After- the-Event (ATE) insurance is taken out to cover costs in the case, such as medical report fees. If a case is won, the Defendant has to pay the Claimant’s costs, including the ATE insurance premium. In cases which are lost, the ATE insurance pays for the disbursements and the ATE insurance premium is waived.
CFAs were introduced under the Court and Legal Services Act 1990. Subsequently the Access to Justice Act 1999 allowed for success fees to be recovered from the losing party. CFAs were brought in to allow access to justice for everyone, they were intended to be used by those who were not poor enough to qualify for legal aid but not wealthy enough to pay legal fees.
The Government has argued that the current civil justice system has created a “compensation culture”. This has been proven to be a mere perception and is not supported by way of figures or statistics. In many areas of civil litigation, the number of claims made each year has fallen.
The proposed changes to the ways civil litigation cases are funded would result in Claimants in personal injury cases, including asbestos disease cases, paying up to 25% of their damages for pain and suffering to Solicitors to cover their legal costs. To make up for this the Government proposes increasing damages by 10%. It is clear to see that this small increase will not make up for the loss of damages to cover legal fees and Claimants will inevitably lose out.
So, what do the proposed reforms mean for those suffering with asbestos related conditions such as pleural thickening, asbestosis, asbestos lung cancer and mesothelioma?
Industrial disease claims require a great deal of work be done in a short period of time. Often claims are risky, due to the historic nature of the asbestos exposure, witness evidence can be difficult to obtain and insurance policies for Defendant companies are often impossible to trace. The proposed changes could result in many asbestos sufferers feeling unable to pursue claims for compensation for fear of financial loss. Solicitors are likely to avoid the more difficult cases that they would normally accept under a CFA, and only take on those cases they feel more confident about. In short, Claimants will lose out, not only by having to pay legal costs out of their damages, but many claims that would be pursued under a CFA will not be taken on under the reformed system.
The proposed Bill has not yet gone through and there is some good news. The Bill has recently had its second reading in the House of Lords and many issues have been raised. Many Lords feel that the reforms will have an adverse effect on access to justice and that significant amendments should be made before the Bill is passed.
Lord Davidson of Glen Cova has expressed his concern over the Bill, specifically how it will affect victims of industrial illness. He fears that the Bill “threatens their ability to get access to justice”. During the second reading of the Bill, Lord Davidson read excerpts from a letter from Yvette Oldham whose husband, Trevor was diagnosed with mesothelioma. She stated that “compensation would be eroded by having to pay legal costs plus insurance to cover Defendants’ legal costs, plus the worry of having to pay some fees upfront. This is an insult and will discourage people from making a claim to which they are entitled. This Bill should be designed to stop the ‘ambulance chaser’ brigade who contact prospective clients and advertise constantly, not workplace victims whose lives were put at risk by exposure to asbestos”.
Lord Faulks is also “concerned that some meritorious claims by victims of industrial disease and even of environmental disasters may not now be viable”.
The next step for the Bill is the Committee Stage in the House of Lords where the Bill will be examined line by line. A date has not yet been scheduled for this but QualitySolicitors Oliver & Co will keep you updated on the situation.