Wednesday, August 31, 2011

Legal Aid Reforms - Creating Victims Twice Over

It's bad enough being seriously injured as a result of someone else's negligence. It's doubly bad if you then cannot be properly compensated for a life that is permanently altered for the worse through no fault of your own
Yet that's the prospect for future road collision and accident victims under the government's shakeup of legal aid. Victims are the furthest thing from the government's mind - their first priority is saving money - £350M/year to be exact - and their second objective is likely reducing motor insurance premiums, because that's where the votes are.

According to The Observer, legal aid 'reforms' will abolish the success fee paid by the defendent's insurer, and will cap legal fees at a level that will make it no longer worthwhile for solicitors to take on complex cases. Simple then - don't have a complex accident.

The proposal is typical of a lot of legislation being rushed through by the present government, in that there's not enough thought given to the consequences. If injured people can't claim compensation, it's the taxpayer that will be picking up the bill in the form of NHS treatment and disability benefit. Except of course they're abolishing disability benefit for anyone who can make mist on a mirror, so the answer is even simpler - don't have an accident.

Actually, I'm only being half-ironic. If the government were serious about reducing the costs of legal aid to injury victims, the logical place to start would be to reduce the number of injuries. Yet they're doing the opposite - reducing the funding for road safety, doing their level best to discourage speed cameras (the most effective tool in reducing collisions), and jeopardizing traffic law enforcement through police cutbacks. About the only good thing that's happening at the moment for road safety is that drivers in general - and in particular the most dangerous drivers - are being forced off the road by high costs. If the effect of legal aid changes is to make motor insurance cheaper, then this will both make the roads more dangerous (by pricing dangerous drivers back onto the roads) and make life more difficult and expensive for the victims.

The other really significant change the government should make to reduce the legal aid burden is to make compensation claims simpler. Currently, there is no presumed liability in road collisions, so as an injured party it's up to you to prove your case - often tricky, as witnesses are not always available and the police spend little time investigating many road collisions. Strict liability would reduce the need for complex legal cases to be made, and would reduce the legal aid bill. Even without strict liability, there is plenty that could be done to coerce insurance companies to settle claims out of court, and to simplify the legal process. Additionally, all costs - compensation, NHS and disability benefits - should be reclaimed from the liable party. If it's wrong for the banking industry to be bailed out with taxpayer funds when things go wrong, the same applies to the motor transport industry, who are currently - as did the banks - making private profits while socializing the risks they create.

1 comment:

  1. I seem to recall Tort reform was one of the battlegrounds on which the US presidential election lost by Al Gore, won by "Dubbya" was fought. The US civil tort system seems fairly dysfunctional at the other extreme to me, with those apocryphal stories about people suing a microwave manufacturer over their dead pooch because the instruction manual doesn't say "don't dry your poodle in the microwave" BUT the republicans were fairly successful in painting the democrats as in the pocket of a wealthy special interest (lawyers) - which is a barrel of laughs is it not? Never mind the backing of Texas chemicals plants which didn't like being sued for poisoning their neighbours.

    Clearly presumed liability would greatly reduce litigation costs in road accidents, as in a number of other areas notably medical negligence and hospital accidents, but one thing it won't do is reduce insurance premiums, and I am sure you're right that the current government would like to offer their electorate that little bribe.

    Of course, the additional cost in premiums is tiny - it has been estimated as an average £50pa - and the motor insurers are currently under enormous pressure because, believe it or not, motor insurance loses shed loads of money for the insurers. Premiums are higher because claims are more frequent and more expensive - after all these days repairing a bust quarterlight even involves purchasing an entire new assembly at a cost of well of £100. Add to that the pressure of uninsured drivers which must include loads of young men who can't buy cover at affordable prices (because actuarially they are high-risk).

    I think the people making the profits are the dealerships, who do it by stealth - they lure you into buying a new car with big discounts (making their margins wafer-thin) but get it back from you by gouging you on repairs and servicing.

    Whatever, anything which makes motoring more expensive is fine by me. I know it hurts the slightly-poor more than the rich but the really poor don't drive anyway, and if the wider middle classes started to spot the delusion and demand better altenatives, we would all be better off.