New measures unveiled to tackle ‘cowboy’ claims firms
The government has today unveiled legislation to clamp down on “cowboy” claims companies and tackle Britain’s ‘compensation culture’.
The new compensation bill would tighten the regulation of claims management companies to ensure members of the public are not pressured into making what are often spurious damages claims, often on a ‘no win, no fee’ deal.
In addition, it would introduce measures to reassure schools that they would not face legal action for accidents that occur during extra-curricular activities and excursions.
“It is time to put the brakes on the cowboy claims companies who take advantage of the public. Responsible firms are suffering from the reputation of the mavericks and give good claims management companies a bad name,” said the lord chancellor, Lord Falconer.
Today’s bill would create a clear system of complaints against such companies and introduce a maximum two-year jail sentence for those offering claims services without proper authorisation by the regulator.
It would also direct courts considering a negligence claim to take into account the “wider social value” of the activity in the context of which the injury or damage occurred.
This is intended to reassure schools and youth clubs that they will not face legal action for every accident that takes place during excursions, amid fears that children are missing out on trips because schools are too fearful of being sued to organize them.
“Individuals and organisations that adopt reasonable standards and procedures to safeguard those to whom they have a duty of care will not be liable and should not have to face unfounded claims,” Lord Falconer added.
“Fear of a claim can restrict groups from undertaking activities we all take for granted. The bill will provide reassurance to those concerned about possible litigation that the law takes the social value of activities into account.”
To coincide with the bill, the constitutional affairs committee has launched an inquiry in to whether the so-called compensation culture actually exists in Britain, and if new laws are really necessary.
It will also look at how lawyers’ fees are arranged and at whether bringing in new legislation would have any affect on people’s fears of being sued.
“The term ‘compensation culture’ is used very widely and there needs to be more clarity about whether it really exists, and if so, whether its adverse results are really best dealt with by a new law as the government proposes,” said committee chairman Alan Beith.
“We also want to be sure that the present system is meeting the genuine needs of those who have suffered serious injury or loss.”
Meanwhile, the NHS redress bill, which aims to provide a faster system of dealing with complaints about NHS care so patients do not have to resort to legal action, received its second reading in the House of Lords yesterday.
It would put a duty on providers of healthcare services to respond more consistently and faster to negligence complaints, and provide a “quick and appropriate” response to claims of less than £20,000.
