Dodgy assumptions about CFAs

A Sunday Times story recently trailed Lord Young’s thoughts on reforming ““ambulance-chasing” lawyers as part of a crackdown on the compensation culture.” (to quote the story) and   It also states that, it, “is understood that Cameron has been shown the main findings and is enthusiastic about them.”  Now the Daily Telegraph has got in on the act.

The proposals appear to unclude banning advertising by personal injury lawyers and middlemen who handle claims (suggesting that CFAs are up there with tobacco products in terms of public detriment) and scrapping of conditional fee arrangements in compensation case in favour of a limit on fees which may or may not operate like a contingency fee.

The Story and sometimes it appears, Lord Young, appears to claim that costs in CFA cases are vast, that there are few limits on the level of costs that claimants’ lawyers can charge if they win a case and that costs currenlty “are 100% to 200%,” of damages.  This kind of exaggeration is commonplace amongst politicians and journalists discussing the compensation culture as is the trotting out of high profile ‘dubious’ claims which usually have the distinction of not being successful (where they exist at all).

Apparently, “Businesses and public bodies such as hospitals are typical targets of compensation claims.” when in fact the typical  defendant in a compensation claim is a driver, backed by their car insurance.  Road Traffic Accidents (RTAs) are far and away the most common claims brought under our nefarious litigation culture.

Lord Young also appears to engage in the Coalition’s favourite sport, blaiming our ills on the old (New) Labour government  He is quoted as saying: “The litigious nature of our society has developed in the past 10 years, solely out of the Blair-Brown years. They allowed conditional fee arrangements. They allowed the claims management companies.”

I am not a fan of CFAs, or of the level of costs in personal injury cases but it is worth saying this:

It was a was Conservative administrations who introduced CFAs (Lord Mackay did it).

Claims Management Companies were not introduced by Labour, but Labour were the first government to regulate them.

There has in the last 30 years or so been a dramatic increase in litigation/claiming but this increase predates CFAs.  The only area of claims which appears to have substantially increased post introduction of CFAs is road traffic accidents.  It is reasonable, therefore, to associate any general increase in litigiousness with factors other than CFAs and with causes arising before Tony Blair took office in 1997.

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