press release
No nonsense recommendations targets UK’s growing ‘compensation culture’
15 October 2010
Lord Young unveiled the findings of his review into health and
safety laws and the UK’s growing compensation culture today by
announcing a string of recommendations including:
- a simplified claims procedure for personal injury claims
similar to that for road traffic accidents under £10,000 on a fixed
costs basis. This could also be extended to cover low value medical
negligence claims
- extending the upper limit for road traffic accident personal
injury claims to £25,000
- tougher restrictions on the way referral agencies and personal
injury lawyers operate as well as greater advertising controls
governing the type and volume of advertising
- immediate implementation of Lord Justice Jackson’s Review of
Civil Litigation Costs
In June this year David Cameron appointed Lord Young to
undertake a review following concern that Britain’s health and
safety laws were over burdening businesses and fuelling the growing
compensation culture affecting both the public and private
sectors.
Figures from the NHS Litigation Authority’s (NHSLA) latest
annual report show that clinical and non clinical claims rose 9%
between 2009 and 2010 and 14% since 2005.
Lawyers at Browne Jacobson who act for defendant insurers as
well as the NHSLA welcomed Lord Young’s review.
Nichola Evans, a Partner at Browne Jacobson, commented:
“Clearly the cost of litigation has become disproportionate in
many areas and Lord Young’s recommendations for a leaner and meaner
low value claims management process will be broadly welcomed by
both insurers and organisations such as the NHS.
“However we take issue with his criticism of BTE insurance. In
2007 when the Ministry of Justice last looked at this area 28
million adults owned the product, mostly as an add on to another
insurance policy. It will be interesting to see if awareness and
penetration levels have changed significantly since then and gauge
the insurance industry response to his preference for stand-alone
BTE policies.
“It is no surprise that Young has reserved his most vitriolic
criticism for the much maligned referral fee system which many
agree needs to change. However will an outright ban on referral
fees, as Lord Justice Jackson has proposed, have the desired effect
or simply drive the practice underground? Surely having a firm
fixed costs regime in place, along with greater transparency, is
the most practical way forward in seeking to drive down legal
fees.
“The Ministry of Justice is holding a consultation into Lord
Justice Jackson proposals on conditional fee agreements and damages
based agreements in the early autumn and we would call on the
insurance industry to use this opportunity to make its voice
heard.”