Why is government so keen to kill the PI sector?
When the Ford Transit plant in Southampton was at risk of closure last year, with 500 jobs under threat, David Cameron’s government offered a £10m grant.
Yet when it comes to the personal injury sector, Cameron has not just stood aside and let it happen, he’s handed the grim reaper his scythe and told him to hack away.
Make no mistake, the government is going to be responsible for the loss of thousands of jobs.
This week I have been inundated with emails and calls from law firms with horror stories of mass redundancies and decimated offices. I’ve had one solicitor in tears asking what exactly they had done to deserve such swift retribution.
Virtually every firm has told me their headcounts will at least halve. Law Society chief executive Desmond Hudson estimated that 20,000 solicitors are involved in PI: at a rough guess, that’s 10,000 solicitor posts gone, almost overnight.
And it’s not just solicitors – who are unlikely to elicit much public sympathy – but secretaries, receptionists and cleaners. It’s the sandwich shop across the road, the childminder looking after children while parents work, the barman serving them at the office party. It’s an entire network of small businesses and hardworking people who will be adversely affected.
And for what? It seems to me we all – government, lawyers, mouthy journalists – want the same three things: fewer of those terrible daytime TV ads, reduced car premiums and a fair crack of the whip for injury victims. None of these ambitions will be realised.
The claims culture will thrive – maybe even grow – once solicitors are ejected from the club. Claims management companies will simply pick up the slack, do the work on the cheap and churn out cases without any regard for those involved. Your daily dose of Jeremy Kyle will have more PI adverts than ever.
Reduced car insurance premiums? Don’t make me laugh. Even the insurers themselves admit that premiums might – might! – come down by a mere 3%. Let’s say you have a £500 annual premium, that saves you £1.25 a month. Just don’t spend it all at once folks.
As to the third, I agree the claimants’ argument about access to justice looks spurious. The insurers (pot, kettle, black, etc) are right to say this is about self-interest as much as public good. But that doesn’t hide the fact that unrepresented victims are less likely to get what they deserve, never mind clog up the small-claims court with no idea how to advance their claim.
The whiplash consultation on the small-claims limit closes today. I hope you contributed, although I would be amazed if it made even the smallest difference to government policy.
The PI market was bloated. There were lawyers and firms who did the profession no favours. There is clearly scope for contraction of the market – just not so devastatingly quickly.
Justice secretary Chris Grayling may well be glad he escaped the Department for Work and Pensions when he did – his old colleagues are going to have their work cut out very soon.
John Hyde is a Gazette reporter
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Comments
Students
Looking at this from the student perspective, that's 10,000 already qualified solicitors who will have to retrain and find a way into other areas of law, 10,000 future training contracts gone in an instant.
Only the training contracts were never there to begin with
Or at least whatever it meant to qualify was meaningless anyway. Juniors have always done work that can be done by paralegals and admin staff, and the majority of PI work - I've seen first hand - certainly doesn't require a solicitor or students forking out thousands for ultimately pointless and out-of-touch qualifications.
LETR will do a lot of favours.
Good article John. Now, whose
Good article John.
Now, whose organising the Downing St march?
Very sad indeed. I am
Very sad indeed. I am hearing of firms going into run off and closing by the day. There hasnt been one day that I havent heard of one person or another being dragged into an office to be given their marching orders. This whole ordeal is an absolute disgrace. I am horrified that it has come to this.
I truly wish all the good guys well - The bad ones deserve what is coming to them. Its just a shame that we have all been tarred with the same brush!!
The firms who are in bed with insures make me sick. I am appalled by Defendants behaviour on a daily basis but the reality is that these 'panel firms' who pay up to £900 per case and use awful tactics to persuade policy holders to claim are largely responsible for this mess.
They started all of this. Some senior partners are very vocal on the likes of Twitter but fail to mention that they have become millionaires by selling their souls to the Insurance Industry. SHAME ON YOU!
When will it end
I have a niece who has expressed an interest in studying law and rather than greating that flattering nod to her Auntie's accomplishments with delight I find myself willing that she persue her childhood dream or becoming a fashion designer, an artist, anything but this.
What a sad couple of weeks it has been.
An excellent article
Clear, pithy and spot on. Thanks for pulling it together so clearly.
Downing Street march
Isn't it about time MASS/APILL or even the Law Society picked a date so we can go protest about this. This is destroying our industry and let's be honest we are one of the few industry's that can survive a recession, only government hasty legislation has hurt us. This is an uncalled for attack on the profession and we will only get our say if we actually protest.
Excellent John. Are Court
Excellent John.
Are Court fees being reduced in line with the reduction in PI costs? How about fees for the SRA for practising certificates etc? How about bloated judicial salaries?
We're all in this together after all eh... What a load of rubbish. Some things (and some parties) never change.
No, I won't be holding my breath either.
One rule for one, one rule for the others. Welcome to time served and ever-the-same democracy Conservative-style. I'd rather have Gangnam-style and trust me, that's saying something...
Great article John
Great article John..
I have followed your reports with great interest and have been encouraged by your willingness to report the truth - you are a journalist with integrity - wish there were more like you.
Whether we like to admit it, the agenda really is to erode access to justice. The amazing thing is that this is done under the guise of being in the public interest - think about it, eroding access to justice in the public interest!!
Even more amazing is that this is being done by politicians with faltering moral compasses!!! (to say the least)... Grayling's dodgy office expenses... Camerons endless misjudgements appointing the wrong people to key Downing Street positions...
The attack on our profession and the attack on access to justice are part of the same agenda..
There is no shortage of money when it comes to saving the banks / big business....
The banks are 'too big to fail'.
If only the public was too big to fail.... If only..
Priorities and humanity
There is nothing worse than saying to somebody's face that their job has gone.Confidence shattered, aspirations crushed.The consequences of such decisions can be life changing for the individual affected by such a decision.
I am hearing about defensive mergers and large scale redundancies in my county.I have heard of solicitors who have mortgaged their houses to fund their law firms, but because of the latest Government decisions they now face ruin.
It is being reported that there are estimates of circa 10,000 solicitors being made redundant in the UK.
It is clearly the hallmark of a true profession, that rather than just being members of a mere trade body,its members should aspire to practice at least, in part, for a higher purpose, with due regard to the public interest. But there should also be proper concern by those who lead a profession as to the needs and welfare of its members.
With the devastation being inflicted on the PI sector does not the CEO of the legal profession think at the very least that an emergency task force should be established to offer meaningful support to a large swathe of the profession about to lose their jobs?
With an already reduced marketplace for lawyers being potentially flooded by a mass of redundant lawyers does not the Law Society feel that it has, at the very least, a moral duty to discourage a number of students currently contemplating a career in the law at this time?
The Gazette has reported prominently the call by the President for flexi-working. Does the President really believe that this is an issue which is currently uppermost in most solicitors minds at a time of mass redundancies, multiple attacks on the profession and a spluttering economy?
The priorities described above and need to get a grip on the politics of what is happening to the profession now need to converge as part of a genuine plan to reverse the tide currently running against the long terms viability of the legal profession.
Yes, but...
The problem lies in presenting this to the public as being a question of access to justice (a loathsome phrase), not a question of lawyers losing income. That is not easy when so much damage has been done to the image of the profession by awful TV adverts, the very volume of which confirms that this has indeed become any industry within an industry (or, if you prefer, profession).
If the Law Society did wish to begin some form of campaign - and, frankly, it is a little late for that - it would need to join forces with the Bar Council and one or more consumer bodies and put together some convincing analysis and statistics, focusing not upon the impact upon lawyers but upon the impact upon members of the public. As a starting point, every claimant PI solicitor should be asked to produce a list of cases in which, prior to the instruction of the solicitor, the claimant had been offered a woefully inadequate settlement by the defendant's insurer. There has been anecdotal evidence of such offers on this site, but something much more comprehensive and compelling is needed.
Campaigns
Morning TimB
I agree with your comments, but my comments were more concerned with the human cost of a political battle barely fought by the Law Society to save jobs in the PI sector.
The strategy behind the JR application by APIL and MASS was, with the benefit of hindsight, unfortunately flawed.
I think that solicitors, but especially their leaders, need to concentrate on the present and where the profession goes from here, to protect what is left and to consider what might be salvaged.
I would tend to agree that if there was no change of direction then ultimately there will be no profession, but just thinning clusters of ethical silos containing lonely legal services traders.
Only themselves to blame
Cannot escape the thought that this is reaping the whirlwind after years of trying to turn the UK into the same compensation-orientated country that USA is
Greedy lawyers getting their comeuppance ... and there will be no sympathy with the public
Why are the lawyers in the PI
Why are the lawyers in the PI sector constantly described as "greedy". The mere fact that the they advertise on TV does not make them any greedier than say Specsavers, but opticians are never described as being "greedy".
The vast majority of PI claims are RTA's. Since 2003 we have been paid paltry Predictive Costs which have not been increased once since 2003. Have these so called greedy lawyers ever really complained about the fact that these fees have not increased in the last 10 years. No - not an indicator of greed in my view.Since 2010 we have had Portal fees which the insurers were happy to agree. The Predictive and Portal fees were agreed by our so called representatives. No one has ever asked me or anyone I know for my views on the level of these fees. The reason I suspect is that our representatives were on the panels of the insurers they were agreeing the fess with and did not want to rock boat.
I resent being described as a greedy ambulance chasing lawyer. When I started doing this job in the late 1980's most of my work was on legal aid. The hourly rate that I got then was more than I get under Predictive Costs and Portal costs at present! I felt that that I was doing a respected job back in those days.
PI lawyers did not take away legal aid or introduce CFA's. I have had to adapt to a plethora of changes to the way I conduct cases. The Government effectively turned us into "businesses" and then complain if we try and make a profit.
A sad day indeed when lawyers refer to fellow lawyers a "greedy".
Perhaps you could ask Jeff
Perhaps you could ask Jeff Wynn how he made £10m from PI work last year? You have to admit one person making so much from PI work can only be classed as greedy, when bankers earning a 10th of that sum are also being classed as greedy??
The use of one example to
The use of one example to justify labelling all PI lawyers as being"greedy". What about the many thousands who earn a decent living. Are they all greedy ambulance chasers?
perspective
Jeff Winn's firm made around £10m profit last year. Admiral made £345m profit last year.
Yet the lawyers are called greedy? Wow.
"......and there will be no
"......and there will be no sympathy with the public"
Until they need us, that is
Need for lawyers
...............and dont forget in despotic regimes its normally the lawyers who get imprisioned/tortured first!
what do you do?
It may be sound advice (go to some properly regulated financial adviser first) to wind up the business, try to sell it if you can find a buyer, and invest whatever's left after making sure you've got adequate run-off insurance, in some insurance company shares.
Without liability if I turn out to be wrong.
Why is government so keen to kill the PI sector?
"BIG SOCIETY". Simple as that.
Cameron doesn't want a society where people seek redress from others who have wronged them. He wants a country where, if your employer causes you to lose a finger, you smile, get over it, and get back to work.
This idiotic policy is infecting everything this government does, from the proposal that employees trade their employment rights for a few paltry shares, to setting up a system where those trying to get back to work have to work for 2 weeks for free (and be grateful for it), to people losing the right of redress if they suffer injury at someone else's hands.
Even if the SCT limit doesn't go up, that is what has already happened, when you factor together the RTA/EL/PL reduced fixed costs, LASPO, and all the other insurer friendly changes in together.
He and his cohorts are so out of touch with the real world that they appear to be trying to remove all behavioural constraints from industry, but don't understand that the civil justice system is the thermostat of industrial harmony. Without the checks and balances that compensation claims provide, behaviour will deteriorate, especially in these difficult times, when budgets are being squeezed and squeezed again. This applies as much to public as it does to employer's liability injuries.
The worst bit about all this, is that they did this in the full knowledge that claimant businesses would close, will close and are closing (Lawyers2you being the latest in a rapidly lengthening line), so how are they going to replace the lost revenue, and where are they going to find the extra benefits funds?
I apologise for using a term massively overused in the last 6 months, but you really COULDN'T make this stuff up.
In 10 years time, when all of this has run its course, businesses and lives have been destroyed in their hundreds of thousands (by "lives", I refer both to legal, ancilliary and insurance claims staff losing their livelihoods, and accident victims left bereft by an injury and then denied any redress by these changes), someone will make a film about this, and the truth will eventually be told.
Big Society
Is the answer that even if we are all practising in a dystopian "Big Society" we still need our Law Society to comes to terms with the new narrative and suggest a more just "Citizens" Portal as a well researched/argued alternative to our creaking civil justice system?
The Law Society should lead the debate and argue for an alternative vision where lawyers are still needed, untainted from the parasitic businesses of the past which have attached themselves to the law?
Only themselves to Blame
I absolutely agree with BOB, the industry only have themselves to blame.
The public only have themselves to blame, when after a injury, they are left to the mercy of the insurance industry to recompense them for what they have lost. They will get all they deserve, i am sure. All the winging and whining about how the greedy lawyers were creaming it. Now they don't need them, and even if they did, they will not be there, but hey, the public knows better, they can cream it themselves.
The defendant lawyers only have themselves to blame, when as the claimant market shrinks, they will also shrink, but hey, they were only acting in their clients interests.
The government only have themselves to blame, when receipts from PAYE, NI and Vat are reduced and in it place they are replaced with benefits and support.
The service industry only have themselves to blame as they lose the childcare jobs, the sandwiches are left uneaten and the offices left uncleaned.
Oh, BOB, they only have themselves to blame and i am sure that (god forbid) if you or yours were ever injured, you would sit and stoically say, WELL, I ONLY HAVE MYSELF TO BLAME.
OH, HOW I SO MUCH AGREE
I agree with TimB - this is a
I agree with TimB - this is a matter of perception, and unfortunately the perception of PI lawyers in this country is predominantly either the D list actors portraying them on the endless advertisements on television or alternatively the high profile lawyers who have made their fortunes from PI work (i.e. fortunes based, albeit indirectly, from the suffering of others).
My own experience of solicitors in my local community, fellow lawyers that they may be, has been very mixed. The arrogance and negligence of one particular individual, in conjunction with the laissez faire attitude of the partnership and disinterest of the SRA, rather convinced me that perhaps the profession needs thinning out in any case. I doubt I am alone in this view and I wouldn't be surprised if a proportion of the public felt the same way.
The only way to combat this is through evidence-backed counter argument and lobbying, but as posts have indicated above, it's rather late for that.
why so keen to kill PI?
How about years of lobbying by the insurance industry in whose interest it lies that my former elderly clients who fall over a hole in the road and are never brave enough to go outside again - perhaps too embarassed cos they'd lost their teeth, won't bother bringing any PI claim.
I used to be a PI lawyer - redundant twice, in 1995/6, again in 2002. I went into debt advice - working under Legal Help with Citizens Advice for less than the Green Form rate I had been paid as a solicitor.
Legal Aid funding for debt work has now been axed as well.
I note debt recovery, as insurance, is a large part of the "service industry" in this country - and that many large legal firms are moving into this lucrative work.
I cannot but feel that the money lobby has restricted access to justice very effectively for claimant personal injury sufferers and those myriad consumers, including those reliant on benefit income, who have been encouraged to borrow beyond their means.
There are undoubtedly many out there who have valid and distressing personal injury claims that will never be pursued because they have nowhere simple to turn for help to achieve their rights, just as there are large numbers of debtors facing harassment and unfair dealing, by those who enticed them with credit in the first place and those others who now seek to recover whatever they can at whatever cost to the debtor - and very little to themselves.
Enough is enough.
I left school at 16 and went straight to work. I married at 20 and had my first child at 23 my second at 27. In 1989 when my little lad was a baby I went to work part-time as a secretary for a law firm in Oldham. They specialised in PI. I loved it. I ended up doing some outdoor clerk work and a little bit of business development.
From there I worked for a couple of other firms, working in various departments - eventually settling at a Manchester firm. I've been there nearly 17 years. I run the PR department. The guys I work alongside are bright, intelligent, good fun and very kind. I say tat because it's true. In my spare time I run a patient support group for melanoma patients and the firm always help me whenever I have events - they love to be involved and help me out.
So, after 24 years in law, I feel like I'm looking down the barrel of a gun. I've done nothing wrong. I love my job and I love the people I work with. If I lose my job, where will I find work? Like many other people I have a family to support (yes my children are grown up but I still give them a lot of support) I have an elderly parent, two beautiful dogs - I don't have a lavish lifestyle at all - far from it - I need to work as do may others.
Imagine how the unemployment of the legal profession will flow - we'll stop going on holiday, we won't visit the beauty salons as often, cancel SKY subs, gym memberships, take children out of fee paying schools and nurseries, cancel private health schemes (and what a drain on the NHS I will be, as I have MS which isn't going to somehow go away!) people won't change cars, I'm sure I don't need to go on.
The closure of god knows how many firms will be truly dreadful - and the CEO of the Law Society has to get off his backside and do something.
If this was the teaching profession or medical - we'd be taking action - why aren't we????? I don't see why I should give up my job without a fight.
A SAD DAY BUT AN INEVITABLE ONE
We knew it was coming - Many years ago (about 1998 or thereabouts) Labour put Geoff Hoon in charge of Legal Aid, and he did some kind of Rocky Horror buffoon road show and addressed solicitors and "not for profit" lovers of new labour about the legal aid changes. He came to Bradford West Yorkshire after being given a very hard time in other Northern cities
It was clear from all he said the "not for profits" were flavour of the month and we were on the way out. Anyone with an ounce of nouse knew we would be decimated
I told him the following:-.
A marketing man from th