Cameron blames lawyers for compensation culture and backs Young report crackdown

Cameron: lawyers only too willing to pounce with a claim for damages on the slightest pretext

The Prime Minister today attacked lawyers for helping to create a compensation culture and promised to “curtail the promotional activities” of claims management companies.

Among the other solutions which the government is to investigate is a road traffic-style claims process for all low-value personal injury (PI) claims, including clinical negligence, while the Jackson report has received strong support too.

In a foreword to Lord Young’s long-awaited report on health and safety, David Cameron said “a damaging compensation culture has arisen, as if people can absolve themselves from any personal responsibility for their own actions, with the spectre of lawyers only too willing to pounce with a claim for damages on the slightest pretext”.

Lord Young’s report, entitled Common Sense, Common Safety, places “a ‘compensation culture’ driven by litigation… at the heart of the problems that so beset health and safety today”. At the same time, the former Conservative Cabinet minister and one-time solicitor acknowledges that the compensation culture is a problem of perception, rather than reality.

He has written to the claims management regulator, the Solicitors Regulation Authority and the Advertising Standards Authority to ask them to review and tighten up their rules so that advertising for personal injury claims is more socially responsible. He was particularly exercised by advertisements offering up-front payments once a claim is accepted. “I consider this to be a high pressure sales technique if ever there was one, something which the current regulations strictly prohibit,” he said.

He added: “I am in no doubt that the payment of referral fees and the accompanying culture that sees claimants rewarded before the legal process has even begun creates a climate in which businesses, the public sector and even voluntary and charity organisations fear litigation for the smallest of accidents, and then manage risk in accordance with this fear.”

Lord Young makes 36 recommendations, including:

  • Introduce a simplified claims procedure for PI claims similar to that for road traffic accidents under £10,000 on a fixed-costs basis. Explore the possibility of extending the framework of such a scheme to cover low-value medical negligence claims;
  • Examine the option of extending the upper limit for road traffic accident PI claims to £25,000; and
  • Introduce the recommendations of Lord Justice Jackson’s review of civil litigation costs;
  • Restrict the operation of referral agencies and PI lawyers, and control the volume and type of advertising.

Mr Cameron said he hoped the Young review “can be a turning point” and threw the government’s full support behind it. He revealed that Lord Young will remain as his adviser on these issues, working “with departments and all those with an interest in seeing his recommendations put into effect”.

A Ministry of Justice Green Paper on implementing aspects of the Jackson report is to be published at some point this autumn following the statement in July by minister Jonathan Djanogly (see story).

Legal Futures will update this story later in the day with reactions from key industry players.

    Readers Comments

  • I am in complete in agreement with the Prime Miniter’s forward to this report.
    I said so following Jackson’s report and do so now that this industry needs to be tackled.
    Far too many lawyers buy work and will not say what they really belive. Abolish Claim Farmers ,bring in tight control of lawyers advertising.They can be controlled for the penalty for them is been struck off.Where as The Claim Farmers have lot less to loose.

  • So Young recommends implementing Jackson who wants contingency fees – and that will quieten down the noise surrounding PI claims? Really? Has anyone seen the US where a compensation culture really does exist unlike the UK where there is simply no evidence of one?

  • *Wry smile to self* re Mr Cameron’s comments.

    We are still 12 months away from the new world order of ABSs and yet already the government seem to be uncomfortable with the consequences of opening up the legal market to commercial forces.

    I’m sure that most lawyers would strongly rebut the assertion that they are the reason for the compensation culture, and would firmly place the blame at the door of the claims managers. And I tend to agree. It is their more commercial approach to client acquisition which has led to the rise in the number of claims, exposing the “latent market”.

    Of course one man’s ambulance chasing is another man’s access to justice and I’m afraid the government can’t have it both ways. Opening up the industry to competition and commerce will inevitably lead to an increase in the number of legal cases across the board as new entrants apply all their commercial savvy to client acquisition.

    The genie is already out of the bottle and if the government find these commercial consequences unpalatable now, the situation is not set to improve over the course of the next decade or so.

    The concern is that the legal services industry in its current guise, won’t be there to fall back on. We’ve heard this week that Ken Clark expects 1/4 of law firms to close in the wake of the changes. In the (paraphrased) words of Mary Portas – Solicitors – “we’ll miss them when they’re gone”

  • How refreshing. Hopefully a reversal of the US style culture that is becoming more evident.

    Access to justice is imperative but it is too easy for people to delegate responsibilty for their own actions.

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