Let me say how delighted I am to be here today and to welcome your new President, Colin Ettinger. I am particularly pleased to be asked to address a conference dealing with the subject of personal injury - I spent my pupillage working on personal injury and clinical negligence cases, so I am very much aware of the value of this area of law. I am pleased to note that Patricia Scotland spoke at your conference last year, specifically on legal costs and CFAs. Today I intend to speak more generally about issues across the piece.
Last year Patricia was here as a Minister of the Lord Chancellor's Department. Today I am here as a Minister in the new Department for Constitutional Affairs. What is different about the new Department? We are now a mainstream public service department that is dedicated to serving the public. Some of the things I want to talk about today are at the heart of providing public services.
One of our key aims is improving access to justice, especially for the socially excluded. Real access to justice encompasses more than purely legal answers to legal problems. Real access to justice empowers people. It means that they have confidence that their rights are protected. It means that they have places to go for help, if they need it. It means that they know where to go to get access to that help.
Courts do not always provide the best routes to that access. They are not always the quickest, cheapest or most appropriate way to reach agreement on issues. So we are exploring alternatives to courts and tribunals. Where the time and costs are more proportionate to the issues at stake. Alternatives which offer the opportunity for parties in dispute to achieve resolutions that are as satisfactory, and sometimes more satisfactory, than a court can provide.
When I qualified as a lawyer 10 years ago, people were suspicious of ADR and few had actual experience of it. The Civil Procedure Rules came into force 5 years ago, around the time that I decided to move into [full-time] politics. ADR wasn't an unknown quantity, but people were still unsure about what it had to offer. Now the importance of ADR methods such as mediation, is more widely recognised - even by the Treasury. In fact, Government is increasingly using mediation to resolve its own disputes. So we know that mediation can work.
We are now trying to find out how the courts can best promote mediation as an alternative to the court process. We have developed 2 pilot schemes to test different ways to reduce the number of cases which end up in court unnecessarily.
Some of you may already know about the automatic referral scheme at Central London County Court. It started in April and will run for 12 months. We are taking some cases, selected at random and we are automatically arranging a mediation appointment. If parties feel that pursuing a mediation would be fruitless, they can opt-out of the scheme, but they will have to give their reasons for opting out and those reasons will be recorded. At the end of the trial, the judge may take those reasons into account when awarding costs. He or she may refuse some or all of the costs of the parties who did not take up the offer of mediation without good reason.
Just over 4 weeks ago, I was pleased to launch the Manchester Mediation Advice Service. This is a free advice service where people can talk to an adviser to find out if their case is suitable for mediation. The adviser doesn't give legal advice or mediate but does encourage the parties to give serious consideration to using mediation to resolve their dispute.
These 2 pilot schemes cover a wide range of civil cases, whether personal injury or debt, a contractual or property dispute. In all these kinds of disputes, satisfactory settlements can involve more than legal issues and mediation can provide an imaginative and flexible approach to resolving them.
We will rigorously evaluate these new pilot schemes and existing court based mediation schemes, to establish the best models and implement them more widely.
I turn now to a proposed pilot scheme in a different area - that for resolving low cost employer's liability claims. As a member of the Ministerial Committee on the Employer's Liability Review I have been encouraged by the way in which Government Departments, lawyers, insurers and other stakeholders have worked together in such a constructive and co-operative way. Through this joint effort I believe there is a real possibility of developing a pilot that everyone can sign up to. We can make a real difference to the way in which these claims are dealt with. Providing compensation in a way that is fair, proportionate, and cost-effective, and without delay, can only benefit the injured person. I know that members of the Association, including Colin Ettinger, David Marshall, Lorraine Gwinnutt, Tom Jones and Martin Bare, are actively contributing to this work and I am hopeful that a pilot will start shortly.
Another piece of work coming out of the Employer's Liability Review was an undertaking to produce a Framework for Vocational Rehabilitation later this year. A discussion paper was published earlier this week and I know that the Department for Work and Pensions is very keen to receive your views. There is more happening on the rehabilitation front. The Chief Medical Officer's report Making Amends recommended the development of effective rehabilitation services for personal injury. The Civil Justice Council held a Forum on the subject recently. I am pleased that the importance of early rehabilitation is increasingly being recognised as an essential step in helping injured people make as good a recovery as possible. Again there are tricky issues to resolve - who pays, who provides, how to provide rehab as early as possible - but a start has been made.
I have mentioned the Chief Medical Officer's recommendation on rehabilitation - he also made a recommendation relating to section 2(4) of the Law Reform (Personal Injuries) Act 1948. This would allow care packages to be provided in clinical negligence cases rather than awarding a sum of damages to cover the cost of private care. This obviously raises issues for us about care costs in other personal injury cases. In addition I know that many here have issues about care costs. We therefore intend to examine the broader context surrounding the issue of private care generally, in our ongoing work on damages.
Other aspects of work on damages include mopping up outstanding recommendations from various Law Commission reports. As a result of developments in policy and case law, we are now carrying out a comprehensive review of all the outstanding recommendations, and revisiting others, with a view to further consultation.
My officials have met key stakeholders including APIL to discuss the implications, costs and benefits of the Law Commission's recommendations. These meetings are of great help in teasing out the issues and helping to develop informed proposals in this area of law. Progress may have been a little slower than we and you might have hoped - not least because new issues keep cropping up - but I can assure you work is ongoing.
Since last year there has been welcome progress on costs.
Last May we were busy drawing up the rules to implement the agreement brokered by the Civil Justice Council to introduce fixed recoverable costs in pre issue lower value road traffic accident cases. This was successfully introduced in October.
And by the end of last year we also had agreement on fixed recoverable success fees in RTA cases. We now have the necessary data to support the delivery of further agreements.
I would hope that by the end of this year that recoverable success fees in most types of personal injury cases will be settled and no longer a time consuming distraction in individual cases.
Much of this progress has been achieved through constructive dialogue, trying to find the common ground. But there has also been some hard bargaining. I am sure the active interest of the Master of the Rolls has been a positive influence at these times!
Despite the unhelpful turbulence of the last few years I believe CFA's do have a long future in helping people to obtain access to justice.
For many CFAs can provide the only effective means of achieving a suitable remedy in a dispute. CFAs can be a powerful mechanism for righting wrongs and are a good thing if used appropriately and not simply as a means to rack up costs to such a level as to frighten defendants into submission.
If the CFA mechanism is complex and opaque the consumer may though be at a disadvantage. Consumers may not understand that no win no win no fee does not always mean no cost to them, particularly where they win a claim. A simple concept should translate into a simple agreement that is simple to understand.
The CFA regime could be made simpler and more transparent and provide a better deal for the consumer, the solicitor and for defendants.
Following consultation last year, we have been working with stakeholders including APIL on the details of a better regulatory system. We will be presenting new draft CFA regulations and other proposals very shortly.
I can confirm that we intend to replace the existing CFA and CCFA regulations with simpler requirements contained in one set of regulations, setting out the minimum statutory framework. Client care and contractual responsibilities will be focused in the Law Society's client care code.
The simple concept of a no win no fee has also become diluted by the complicated insurance and loan arrangements many claims intermediaries have persuaded consumers to enter into.
The worst in this respect may be over but the need for better standards remains. The only practical way to do that under the current regulatory system is through building up self-regulatory mechanisms.
It is too early to know whether the new Claims Standards Federation will make a difference but the development of this body does provide an opportunity to produce a step change in service levels. For the Federation to do so it must be completely separate from its member organisations. It must satisfy the OFT that the commitments made in the proposed code of practice can be met.
A Law Society led working group of legal, insurance, government, regulatory and claims management representatives took the initial steps to produce an outline model code of practice for claims intermediaries and suggestions for new consumer guidance. The Federation has produced it own version of the code and other guidance. We all need to watch developments here.
We all also need to remember that defendants as well as claimants have rights.
Defendants should not have to be faced with unreasonable costs. The threat of costs should not deter them from mounting a defence if there is serious doubt over liability.
Costs must be reasonable and proportionate. Legal teams on both sides have a responsibility to ensure that litigation is conducted economically and efficiently. This is relevant when the client is paying and it is relevant when the other side is likely to have to bear the costs.
Both claimant and defendant sides have been confronted with some very hard choices. I believe the APIL team led by David Marshall and Denise Kitchener have faced up to these and demonstrated strong leadership for APIL. They have also kept the interests of injured people firmly in mind in trying to reach a fair, stable and long-term solution to the costs and funding problems in personal injury.
I am confident that this will continue under your new President's leadership.
I'd like to say something generally about the role of consumers.
Consumer attitudes are without doubt changing. Consumers demand more choice and higher standards. We need to know what people want from the legal system. Why do people not go to solicitors? Why do many personal injury claimants choose to use claims intermediaries as the first port of call instead?
As we try to understand and respond to consumer needs, we need to ensure that, in giving the customers what they want, we do it in a way safeguards their interests but does not choke the system with unnecessary and complex regulation. The simplification of CFAs I referred to earlier is a good example of this.
Where things go wrong and consumers receive a poor service from solicitors the complaints need to be handled quickly and fairly. The majority of solicitors provide a high quality service and deal with any complaints efficiently and effectively. The few that don't can distort customer perceptions in a way which impacts on the whole profession.
I am therefore very pleased that the new Legal Services Complaints Commissioner and the Law Society is committed to working in partnership to make rapid improvements in complaints handling, so that consumers receive the service and any redress they are entitled to expect.
How solicitors provide services to the public and how the professions maintain high standards leads me to the regulation of legal services.
A changing, more competitive and responsive legal landscape will require a flexible, efficient and accountable regulatory regime. I don't think we have such a regime at the moment and the only way to change it is to examine the whole system in detail and without prejudice to establish what works and what doesn't. That is why we asked David Clementi, who has no legal baggage, to scrutinise and to challenge.
His consultation runs to 4 June, so it is not too late to respond.
Finally, I am interested to see that you have on your agenda later today a debate entitled Compensation culture - put up or shut up. The question of whether the so-called compensation culture exists has been the subject of a plethora of allegations and anecdote, but very little hard evidence. My own view has long been that the available evidence does not support the claim that there is a "compensation culture". What does concern me is the "have a go culture". A professional and responsible approach must be taken by all to make sure that time and money are not wasted on frivolous claims. And as I said earlier, we must all work together to ensure that genuine claims are dealt with in a more timely and effective way, for the benefit of the injured person. I look forward to receiving shortly the independent report by the Better Regulation Task Force, which will help inform future debate on this issue. I am Sponsor Minister for the report and I shall be closely involved in taking forward action on this subject in the next few months.
Thank you again for asking me to speak today. APIL has consistently shown the ability and skill to meet new challenges and I believe that by working closely with others, you have helped bring about significant changes and improvements to the claims process. Most importantly, I am pleased that this is helping deliver better services for injured people. There remain many challenges ahead but I hope that the co-operation evident across so many areas of civil justice at the moment will continue to deliver real progress.