The Law Blog

The justice secretary, Kenneth Clarke, has launched a scathing attack on ‘no win, no fee’ legal firms, suggesting that unscrupulous solicitors are behind a surge in frivolous personal injury claims.

Speaking on BBC Radio 4, Mr Clarke explained: “The cost of the claims has absolutely soared and it’s become a terrible burden for a lot of people who are sued. Businesses find it very expensive and particularly the NHS, which pays out a fortune in lawyers’ fees every year because of the way it’s been changed.

“We are not getting rid of ‘no win, no fee,’ we are going back to the way in which it started in the 1990s. There were changes made in 1999 to make it more attractive and they, unfortunately, have gone too far, they’ve led to an explosion in the cost.”

One of the changes proposed by Mr Clarke is that solicitors whose cases prove successful in court must take their fees from the damages awarded to clients – a move that is likely to be seen as a backwards step by those who are concerned about equity and justice. Damages are awarded in personal injury claims to compensate the victims of negligence, so it would seem somewhat unfair that the compensation itself must be shared between clients and solicitors.

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Another change proposed by the justice secretary is for small claims courts to increase the value of damages that may be awarded. At present, £5,000 can be awarded by such courts, but, if Mr Clarke’s plans go ahead, this figure could be increased to £15,000. Mr Clarke also wants more cases solved through formal mediation before court action is contemplated.

It might be argued that Mr Clarke’s apparently tough yet reasonable stance on the personal injury claims industry is necessary in order to prevent creating an overly litigious society. In truth, however, the proposed changes are unlikely to benefit the public interest, as changing the way in which no win, no fee legal firms operate, could deny thousands of potential claimants that which ought to be their most basic right: access to justice.

In a similar way as reducing the scope of no win, no fee, lawyers could limit the accessibility of justice to claimants, forcing solicitors to share damages would limit the remedies made available through the legal system. In effect, it is quite possible that courts would be forced to award inflated damages in order to adequately compensate for solicitors’ fees. Equally, fewer claimants may be provided with a realistic and affordable opportunity to pursue damages against a negligent person, company or organisation.