Much has been made of the delay in the implementation of the Legal Aid, Punishment and Sentencing of Offenders (LASPO) Act extension to mesothelioma cases which was scheduled for July this year.
Up until July, success fees and After the Event Insurance premiums remained recoverable from defendants due to a specific exclusion in the LASPO of sections 44 and 46 which prevented the sections coming into affect until ministers had carried out a review.
Well, a justice select committee has carried out a review and it is pretty damning of the Government which means ATE Premiums and Success Fees for mesothelioma cases will remain recoverable for the foreseeable future. On one side of the original debate in parliament was the Government, Defendant lawyers and the insurance industry, on the other were Trade Unions and claimant lawyers. You may recall that much was made of the 'cost benefit analysis' published by the Government which concluded that there would be a net gain to claimants when the 10% damages increase was taken into consideration against the non-recoverability of the success fee and ATE premium (so the client would have to pay these out of damages). Now, over 1 year on, the select committee describes the cost-benefit analysis as 'an exercise in premature conjecture'. They went on to describe the Government's review as poorly timed and 'maladroit' because it had been 'shoehorned' into the wider consultation of the claims process.
Worse still for the Government was the revelation that the committee concluded that the Government had not been even handed due to the fact that they had entered into 'heads of agreement' with the Association of British Insurers who represented defendant insurers and that agreement shaped Government policy.
Which is what I have been saying all along. The Government has acted in a totally biased and underhand way by colluding with the Defendant insurance industry... and have been caught out. The justice select committee has recommended independent research be commissioned to determine whether the LASPO changes should be brought into mesothelioma cases and also to look at trends in the ATE Insurance industry since LASPO took effect for the rest of the Personal Injury industry.
What will they find? Well, defendants are not consistently paying higher damages, the numbers of claims have not been reduced (so they weren't all fraudulent after all) and ATE insurance is still an essential part of the claims process. Of yes, and claimants are losing about 30% of their damages so are not being fully compensated any more.
What's the phrase? I told you so...