25 March 2013Print This Post

Exclusive: Djanogly warns insurers that “eyes of government” will be on them

Djanogly: small claims limit for PI is cisco 640-816 out of date

The “eyes of government” and of MPs will be on the insurance industry to see that it delivers lower premiums following the civil justice reforms, according to the man who piloted the Legal Aid, Sentencing and Punishment of Offenders Act 2012 through Parliament. 642-444 exam

In his first interview since returning to the backbenches last September, former justice minister Jonathan Djanogly told Litigation Futures that he had no regrets about the reforms he introduced.

Mr Djanogly said that “when I became a minister, I spent most of my time arguing that there was a compensation culture”. He added that “10 Downing Street were very keen that insurance premiums should be brought down and they saw that the compensation culture was part of that”.

Pointing to statistics such as accidents falling by a quarter as claims rose by a third, he insisted that it is now “a rare lawyer who argues there’s not been a compensation culture”.

The acceptance of this led to a series of “incremental reforms”, starting with ending the recoverability of success fees and after-the-event insurance premiums, and moving on to the referral fee ban, the “criminal aspects of whiplash”, spam texting and finally the civil aspects of whiplash.

Despite recent warnings from the likes of Direct Line that the reforms in total may not make a difference to premiums, Mr Djanogly said: “The eyes of government are going to be on the insurance industry. Government expects them to respond and I think that’s the general feeling among MPs. We are looking for changes.”

While he was “convinced” that a large proportion of the RTA portal fee related to referral fees, Mr Djanogly said it should be kept under review. “If firms can make a good case that their marketing costs are such that a higher level is going to be needed in the future, then I don’t think that should be overlooked.”

The MP for Huntingdon also brushed aside the attacks he faced over his personal interests during the passage of LASPO, which led to some changes in ministerial responsibilities. “It didn’t bother me at all,” he said. “When people switch towards attacking you personally, you’re generally winning the policy argument. I took a lot of comfort in that.”

He said: “In retrospect the provisions of the Access to Justice Act were a disaster and created an unreal market place… and just detached the client from the advocate. Once you had a situation where the client did not care what his representative was earning, the situation was always going to get out of control.

“We are the only country in the world so far as I know where there were people arguing that a lawyer shouldn’t take a fair fee from his or her client for fair work done. I was very pleased to go to a conference recently and see the Law Society now recognise that. Lawyers should be proud of the work they and should expect to be paid a fair price for the work that they do. And lawyers in every other country work on that basis too.”

Mr Djanogly acknowledged that the issues around whiplash are more often criminal rather than civil – “it’s not realistic to assume that amending the civil law is going to cure whiplash”. At the same time, “there are aspects of whiplash where there are marginal claims being made that should not be made under a fairer system and will not be made” after the impending changes.

The government consultation suggested that only 7% of whiplash claims were fraudulent, but Mr Djanogly said his “personal instincts” were that it is much more.

He argued that the £1,000 small claims limit for personal injury cases is “out of date”, saying: “I think most people rationally say that is too low a figure… There must be a level at which it is wrong to be using lawyers.”

One benefit of the small claims track is the assumption of mediation, Mr Djanogly added.

While some of the details have been slow to emerge, and the implementation timetable was “always going to be tough”, the solicitor noted that practitioners have now had a year since LASPO was passed. “This has not come out of the blue,” he said. “Practitioners have to understand that and respond to the new environment that now exists.”

By Neil Rose

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One Response to “Exclusive: Djanogly warns insurers that “eyes of government” will be on them”

  1. The number of claims increasing relevant to the number of accidents falling was because your insurer chums became involved in claims capture, not because of predatory activity from CMC’s or solicitors Dangleberry.

    What eyes of government will be on the insurers? The eyes asking how much the insurers will be making in political donations?

    We all know premiums won’t tumble, already many insurers have announced good or record profits yet no drop. The next excuse will be the weather has hit their profits, so they can’t reduce premiums

  2. Lee Jones on March 25th, 2013 at 1:39 pm