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Jean-Yves Gilg

Editor, Solicitors Journal

Jane Wessel

Partner, Arnold & Porter

Access to justice

Access to justice

By and

The ‘compensation culture' is a myth perpetuated by Parliament and we are all paying for it, says Michael Tennant

A court 'may' consider whether a particular activity is desirable or whether a person might be discouraged from taking part in an activity, in deciding whether or not a defendant is negligent. That is section 1 of the Compensation Act 2006. Plainly, this provision has done nothing to supplement or even clarify the law and it has achieved nothing. It was conceived as part of the answer to a perceived 'compensation culture' with a view to redressing some 'balance.'

Recently, a national newspaper trumpeted as 'an outbreak of common sense' a decision of the Court of Appeal upholding the dismissal of a personal injury claim. A hole in the ground had been repaired inadequately in circumstances for which the defendant was not responsible and of which the defendant had no reason to know. The claimant's case was that she had been injured when she stepped into what became a hole and she did so as a result of the poor repair.

I remember dealing with a similar situation over a year ago. An employer had organised a 'fun' day to boost staff morale and encourage 'bonding.' Staff were required to take part in events of their choice. The claimant chose to take part in an egg-and-spoon race. During it she slipped on damp grass and suffered injury. The claimant's case was that the employer should have cancelled the race or postponed it until the grass was bone dry. What surprised me about the case was that there had been no application by the defendants for summary judgment.

The obsession with cost recovery

This type of claim would never have been made 20 years ago, or even 15 or perhaps 10 years ago. Is it proof of the development of a 'compensation culture'?

Once upon a time, legal aid was available for personal injury claims. There was a means test which in relative terms was less restrictive than the modern public funding test. There was also a merits test, assessed by local committees, and there was a right of appeal against a refusal. No practitioner would have wasted time helping a client to complete an application form for legal aid to make the sort of claim we have been looking at.

No one would dispute that there was then, as now, a vast unmet need for access to justice. Access to justice is the acknowledged right of every citizen in a mature democratic society. There is probably better access to justice for most people now than there has ever been but at what cost?

When legal aid disappeared for personal injury claims and became more restrictive generally, something had to replace it to provide that access. Part of what replaced it was a system of funding that included the 'additional liabilities.' These, conditional fee agreements and 'after the event' insurance have vastly increased the cost of litigation. In many cases, the costs swamp the litigation, quickly exceeding the amount in dispute.

Further, because of the amounts involved, disputes about the amount of costs have encouraged the ingenuity of lawyers to develop increasingly complex arguments on technical points. These are then tested on appeal. It is no wonder that the whole subject of costs is seen as an aspect of failure of the change of culture ushered in by the Civil Procedure Rules 1998.

But that is not a fair assessment. While the courts have considerable power to control the incidence of costs in litigation, in a free market economy and in a demand-led market, the courts have been almost powerless to control the amount of costs. What is available in the market determines so much. Thus the cost of litigation generally becomes a political issue, as to some extent it has always been.

As part of the operation of the rule of law for the benefit of a well-ordered society, there is an overwhelming case for the provision by the State of a means of access to civil and family justice at reasonable cost and funded by the State. This is apparently acknowledged elsewhere in Europe and largely throughout the world. Almost, perhaps completely alone, a policy is pursued in the UK that insists upon 'full cost recovery' in relation to the running of the civil courts. Of course one understands that the provision of courts and legal services for civil and family justice in particular is unlikely ever to provide a glamorous political platform.

Rights and litigation

This surely has led to a situation in which, while it must be right that individuals are aware of their rights and able to access remedies for infringement, there is much litigation that is purely speculative, and that litigation generally is so costly. The perception is thus created that individuals make outlandish claims because they are encouraged to believe that they have a good case whenever they suffer a grievance.

Competent lawyers know perfectly well if there is a case or not. The so-called 'compensation culture' is a myth in the sense that the law may have changed to indulge this misapprehension. Hence, Section 1 of the 2006 Act is unnecessary. Who pays for all this in the end? The consumer pays '“ that is all of us. There is no one else who can pay.