‘Roughed up by the police on Saturday night? Ring us for free advice . . .’ We have become overly familiar with crass ads run by claims companies and lawyers trying to drum up cases run on a ‘no win, no fee’ basis. So far, such arrangements have been largely restricted to routine accident claims.
But a new paper from the free-market Adam Smith Institute proposes that legal aid be scrapped in crucial areas of legal advice – actions against the police, medical negligence, education and housing disrepair – and replaced by ‘no win, no fee’ deals, or conditional fee agreements, as lawyers call them. The proposal will be music to the ears of policy makers eager to slash £350 million from the legal aid scheme.
The legal aid minister Jonathan Djanogly set out some alternative ways to deliver legal aid in a ministerial statement this summer. It was a mixed bag of ideas, including legal insurance policies, taking the interest from solicitors’ client accounts and ‘polluter pays’ schemes. In a collection of essays called Closing the Justice Gap, published in April by the research company Jures, the then shadow justice minister Henry Bellingham cited legal insurance products alongside other ideas such as a contingent legal aid fund (basically, a public-private partnership scheme financed by taking a percentage of damages recovered by successful claimants), as examples of ‘imaginative and radical ways’ to bring ‘new money into legal aid from outside the public sector’.
It seems an exercise in futility to oppose legal aid reform in the current fiscal context – and there is plenty about the current system that needs reforming. But policy-makers need to go back to first principles. They need to understand where ‘legal aid’ fits in.
‘One takes it to be axiomatic that in “a decent society”, legal rights and protections that are created to improve or safeguard sections of that society should be capable of being pursued,’ the legal academic Professor Stephen Mayson wrote in October (more in hope than confidence, one suspects). If, as Mayson suggests, ‘access to justice’ is part of what people recognise to be essential to a decent society, then the government shouldn’t just dump that responsibility on the private sector, expecting market forces to miraculously fill the vacuum. But what is especially alarming is that the ideas currently being put forward seem either half-baked or past their sell-by date.
In the case of insurance, Henry Bellingham wrote approvingly of the German experience of legal expenses insurance, where ‘a staggering 46 per cent’ of the adult population is covered by such policies. A legal expenses insurance market is also well established in the UK where between 10 and 15 million households have such policies (out of a total of 25 million).
But – and it’s a big ‘but’ – the industry is configured in a totally different way in the UK. Germans buy insurance because they fully intend to use it if the need arises. We don’t. Here legal insurance is given away with household or motor insurance policies or sold as an ‘add on’ to such policies for around £20 as opposed to the £200-300 that Germans pay. Our policies are much more limited; they don’t cover divorce, custody or much of what comprises ‘social welfare law’ and is covered under legal aid.
We can’t replicate the German model without dismantling the existing UK industry. That means the prospect of insurance products replacing legal aid is – as DAS, the biggest legal expenses insurer on the continent, recently acknowledged – ‘a non-starter’.
What of the new thinking from the Adam Smith Institute? Unsurprisingly, our free marketeers aren’t big fans of publicly funded law. ‘Civil legal aid continues to fail,’ they assert. Their proposal – to scrap legal aid for compensation claims – is hardly the magic panacea they suggest it is. The value of those compensation claims is £28.8 million (1.3 per cent) of a £2.1 billion budget.
The reasons why those difficult cases still have legal aid are largely sound. Consider someone beaten up by the police (an anti-war protester at a demo perhaps). No lawyer is going to run a case like that on a ‘no win, no fee’ basis – such cases are backed by insurance and an insurer isn’t going to touch it with a barge pole.
While leaving the fate of vulnerable people to the private sector is reckless, the access to justice lobby – campaigners, lawyers, the advice sector and trade unions – urgently needs new ideas. Unlike schools or hospitals, ‘access to justice’ sounds an abstract and remote concept – unless, that is, you are behind on your mortgage and your house is being repossessed, you’ve been made redundant or, god forbid, banged up and falsely accused of a crime.
Arguing for more money for lawyers is frankly unrealistic – and maybe it’s not the right answer anyway. There needs to be better education, more accessible information and, if needs be, easier access to the courts. In Closing the Justice Gap, Steve Hynes and I set out our recommendations, including establishing a free legal aid service for all (a telephone service supported by online materials along the lines of NHS Direct). We also call for the adoption of ‘access to justice’ foundation principles. Number one: ‘access to justice is the constitutional right of each citizen’.
You can read Closing the Justice Gap at www.jures.co.uk
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