Govt should be more radical on legal fees

Better Regulation Task Force deputy chair Teresa Graham authored the report that prompted Lord Falconer's announcement on compensation culture. While she accepted most of the Department of Constitutional Affairs', responses to the report. Here's what she said about the other points:

We believe that contingency fees are potentially more transparent and less subject to dispute. They could also bring much-needed market competition into claimant lawyer costs.

We are disappointed, but not altogether surprised, that the government rejected this recommendation. In many quarters, contingency fees are still regarded as beyond the pale. But, to their credit, as you've heard, ministers at DCA have recognised that conditional fee arrangements need to be simplified and have consulted on their proposals.

We obviously hope the reform works, but still think the government needs to be prepared to pursue more radical options, should they fail.

Full court litigation is not the only way of resolving a dispute, and we looked at alternative means, and we looked at the small claims track, as Lord Falconer suggested, because we were surprised to find the limit for personal injury claims under the small claims track is only £1,000, when for other types of claims, except housing disrepair, it's £5,000.

And we did hear many reasons why the limit shouldn't be raised, but, on balance, we weren't persuaded by them.

We believe that the small claims track provides a cheap and simple mechanism by which people who are unfamiliar with the legal procedures can bring their disputes to the courts. They can dispense with the services of lawyers if they wish to, and are given a fighting chance against wealthier represented opponents. We would like to see more people able to use this service. So we recommended that the government should look for a limit well above £1,000 which best balances the benefits to the claimant and society against the costs.

We also looked at the valuable service provided by the ombudsmen, another cost-effective and non-adversarial means of settling disputes. Unfortunately, large sections of society don't know that the ombudsmen exists or, if they do, are unclear about their areas of responsibility.

We recommended that overlaps between ombudsmen are removed and that they should better publicise their services. The government denies that there is any overlap between ombudsmen. We are not convinced. But the government has accepted the need to promote better joint working, and we will certainly keep an eye on progress here.

We would also like to see greater provision of no-fault rehabilitation.

If provision has to wait until liability is sorted out, it could be too late. Lawyers argue that early intervention, without knowing the full extent of the damage, would jeopardise client claims. We were not persuaded and think that early intervention is better than late intervention, and who should pay is, frankly, a side issue.