Friday, 18 December 2009

Legal fees scandal

Personal injury lawyers are under fire today. The Tories have asked some well-aimed parliamentary questions, and discovered that the NHS is paying out a staggering amount of money to meet victims' legal fees in clinical negligence cases. In over 10% of successful claims against the NHS, the lawyers receive more money than the patient, with NHS legal costs adding up to £700m over the past five years.

It's easy to blame this on the lawyers, a profession whose popularity ratings are only marginally higher than Labour MPs and City bankers. But the real cause of this scandal is the lack of any legal aid funding for patients that have suffered from clinical negligence.

If your operation has been botched and you can't afford a lawyer, you have to enter a "no win, no fee" arrangement. Law firms doing "no win, no fee" work end up losing a lot of their cases, and get paid nothing at all. They then have to charge a "success fee" in the cases they actually win (which gets paid by the losing side, ie. the NHS). Supposing the firms lose 50% of their cases, they have to charge double the rest of the time, just to break even. (In fact, the formula is slightly more complicated than this, and takes into account the likelihood of winning each case, but the basic idea still holds.)

The obvious solution is to give legal aid funding to patients who have suffered from clinical negligence. Then, lawyers would get a fixed and fair wage, depending simply on the complexity of the case. If the legal costs clearly outstripped the value of the likely payout, claimants could make an informed choice about whether or not to proceed. The system would arguably be much fairer.

Unfortunately, our gut reaction is exactly the opposite: to cut the legal aid budget, and to feel very smug about wasting less public money on parasite lawyers. The legal aid budget has been slashed, year on year, but rather than save money, it's stopped everyone but the rich from having fair access to the courts. Both claimants and defendants are thrown at the mercy of the casino-style odds game that is the "no win, no fee" system. Populist anti-lawyer rhetoric may make us feel better for a while, but it won't solve the fundamental problems that have led to this latest scandal.

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