My Lords, Amendment 47 stands in my name and those of my noble friends Lord Bassam, Lord Beecham and Lord Monks. We need this amendment because, on the back of wanting to take action on what are claimed to be fraudulent whiplash claims, the Government propose to remove legal help from a swathe of people with genuine personal injury claims. This is not simply unnecessary but wrong.
When the Government introduced fees in employment tribunals, the absence of legal advice and representation frightened many away from taking cases to court and we saw a drop-off of some 90%. In family courts, where legal aid was largely withdrawn, we have again seen the difficulties when people are unrepresented. Denying legal advice undermines the commonly held view—I thought it was commonly held—that justice should be open to all and not just to those able to pay.
6.30 pm
The Government are proposing to double the tariff below which legal aid is recoverable, such that only claims officially above £2,000—or £5,000 for road traffic cases, which is a fourfold increase—will be taken under the fast-track procedure and thus be eligible for cost recovery. I say “officially” because the measure of whether a case falls within the small claims track is calculated only on the potential award for general damages or pain, whereas losses and expenses, the so-called special damages, are outwith the calculation. So, for example, if general damages are worth £900, the claim goes into the small claims track at the moment, even if wage losses were, say, £700, bringing the £1,600 total above the small claims limit. In future, any claim for general damages below £2,000, or £5,000 for RTAs, will have to be dealt with by the small claims procedure, even if the total is above that, with legal costs then not being recoverable. Yet for these sorts of amounts, paying privately for advice would never make economic sense. It would take too big a sum from whatever was awarded.
We have to ask why the Government are doing this. The £1,000 limit has been with us since 1999. Since then, using, say, the RPI index, there may be a case for uplifting to, say, £1,500, but no higher. Indeed, Lord Justice Jackson supported a £1,500 limit when inflation justified it. Last month, the Justice Committee concluded that,
“increasing the small claims limit for personal injury (PI) creates significant access to justice concerns”,
and “risks falling short of” guaranteeing,
“unimpeded access to the courts”.
The Minister might not think that a £500 difference is very great, but it is for a nurse, a bus driver or a care worker and, indeed, it represents 50 hours’ work for those on the minimum wage, exactly the sort of people mentioned by the noble Baroness, Lady Berridge, on an earlier group. The Government are proposing that people with claims under £2,000—potentially substantially more with loss of earnings—take on insurers with no paid legal help. It is no good the Minister responding
that they can always swap tracks if the case is perceived to be complex, as he said in Committee, because you only know if a case is perceived to be complex if a lawyer has told you that, and you will not have a lawyer at that point.
These cases are where the consumer—in case the Minister wonders why I am here, it is because I am in my consumer role, rather than my Brexit role; he might have thought there was a European aspect—is always the small guy up against the big one, with disparity of power, according to the Transport Committee, or an asymmetric relationship in Lord Justice Jackson’s words. That is why until now the limit has been kept deliberately low.
These changes will affect not simply whiplash claims. The increase in the small claims limit to £2,000 will affect cyclists and pedestrians, and I declare my interest as both, although the idea that I am likely to suffer whiplash is rather absurd. Not only does whiplash not affect such claimants, but there is no suggestion of false claims from such non-whiplash claimants.
Here we have a Bill to deal with whiplash, but the Government are taking action on the limits which flies in the face of advisers and is unrelated to whiplash or fraud, but will affect tens of thousands of people a year. Furthermore, the Government have offered no justification for increasing the small claims limit in all road traffic accidents, not just whiplash, to £5,000, which could capture perhaps nine in 10 of all RTAs, leaving them effectively without legal representation. The changes will also affect employment injury claims. Again, there is no suggestion of fraud or misuse of the courts, and the amounts are significant to low-paid workers, exactly those least able to pursue a claim without legal advice or representation.
Of the cases handled by trade unions—remember that many of the very low-paid are not even in trade unions, but they still need legal advice—of the half that were dealt with by Thompsons, nearly one in five were below £2,000. Some of those who are injured will try to pursue their own claim with no legal assistance, but even on the Government’s own figures we know that 133,000 cases will never proceed, just as we saw a 90% drop in ET cases after fees came into being. Yesterday’s MoJ figures show that personal injury claims in county courts fell by 7% in the first quarter, which confirms this trend, as does the DWP compensation recovery unit, where cases dropped 13% in 2017-18. These are serious fall-offs of people with genuine claims who are simply unable to pursue them themselves without legal aid.
Amendment 48, which is also in this group, would ensure that claimants can get advice so that they do not undersettle their claim because they have not fully understood the medical evidence or have been overpressured by insurers. As the noble and learned Lord, Lord Mackay, said, claimants who have to contest an offer by themselves find that very hard to do without legal advice. They simply do not know whether the offer is fair.
We should ask who would benefit from removing legal advice from a swathe of injured claimants. It is clearly not the injured themselves, nor the NHS, which will lose some £6 million a year, but it is possibly the
insurers. The impact assessment suggests they could get an extra £1.3 billion, and there is no guarantee that it will be passed on to consumers, although in the light of what the Minister said on the previous amendment I feel some reassurance that that may now be looked at more closely. Perhaps we can see, if not at Third Reading certainly in the Commons, whether the undertakings he has just given would ensure that any such savings are passed on. If it is the insurers who win in these proposals, that hardly accords with the Prime Minister’s promise in Downing Street in July 2016 that her Government would,
“be driven not by the interests of the privileged few, but by yours ... When we pass new laws, we’ll listen not to the mighty, but to you”.
Perhaps that is why she is slipping this change through not in the Bill before us but behind the scenes by asking her Lord Chancellor to order the rule committee to make changes which would deny thousands of people legal help with their claims as a result of changes brought in by statutory instrument.
The Government’s proposed changes are not in consumers’ interests. They will deprive people of legal representation to obtain their rights, which is hardly what Lord Reed wants as he said people should have “unimpeded access” to courts as without that,
“laws are liable to become a dead letter”.
It is right that people who are injured get compensation, but they need to be able to do that with proper advice. We do not accept that reducing access to our courts should be done in this underhand way by this change in limits. This amendment will bring the issue into primary legislation, where it belongs. I beg to move.