By

Former Deputy Prime Minister John Prescott highlights risks in the government’s proposals to scrap ATE insurance premium recoverability. Writing for The Guardian, John Prescott highlighted his grave concerns over the ramifications of the government’s proposals to eradicate the recoverability of success fees and ATE insurance premiums.

Writing for The Guardian (30th January 2012), Prescott commented:

“The government is trying to force its legal aid bill through parliament. What few people know about – because it has had little coverage – is the second part of the bill, which is nothing less than a cack-handed attempt to change the legal system to benefit large corporations when they are being sued.”

NO MORE DAVID VS. GOLIATH?

The essence of Prescott’s article is that the proposals by government are merely designed to serve large corporations. What they fail to address is the impact on the access to justice for those of limited means often fighting in David vs. Goliath type battles.

Prescott makes the point, which most lawyers and judges are alive to but fail to admit, which is that civil litigants and SMEs involved in such legal battles in the future will “find themselves exhausted and outspent by the wealthy.”

He continues to state that:

“That’s what the powerful do. They drag out cases until you’ve sold your house and your possessions trying to get justice.”

KEY ISSUES WITHIN THE LEGAL AID BILL

A key problem with the government’s proposal is that they’ve sought to address to a specific issue, namely the personal injury claims sector or “dodgy whiplash claims” as Prescott highlights. Arguably this bill has been written without any genuine impact analysis on the effects on many thousands of individuals and businesses unfortunate enough to be involved in some form of litigation against a financially stronger opponent.

LOOKING TO THE FUTURE

Litigation funding is heralded as one answer, but even here there are potential limitations, particularly where the case is of a relatively modest size. Significant expansion of the before-the-event legal expenses insurance sector is often considered by industry insiders as no more than a “pipe dream”.

One thing is certain though. Whatever the future has in store, TheJudge are developing an evolving product range that will cater for the needs of litigants well into the future.

Matthew Amey from TheJudge comments: “John Prescott’s comment should not be overlooked by prejudice of political views; after all he makes his comments having endured his own legal battle with the press. His comments chime with those of Hugh Grant speaking at the Leveson enquiry”

“There are big challenges ahead for individuals and small businesses involved in litigation if the reforms go through as suggested. These challenges will alter the dynamics of the litigation insurance and third party funding market. Our team are hard at work developing products with a host of ATE insurers and litigation funders to ensure our clients, as they always have done through TheJudge, continue to have choice.”