Adaptación en el nivel de las tareas

5 │ Assessment of the impacts of regulatory and legislative changes in the personal injury market on access to justice

have reduced access to legal services for those previously eligible for legal aid. Therefore, it is important to consider whether the expansion of conditional fee agreements was sufficient to offset the negative impact of the removal of legal aid.

The shift in funding from legal aid to conditional fee agreements may also have had distributional consequences, for example if those on lower incomes who would have previously been eligible for legal aid were reluctant to take up conditional fee agreements.

 If conditional fee agreements did make it easier to make personal injury claims, this effect

may not have been felt by all individuals and for all types of claims. As noted in the framework laid out in chapter 4, for individuals with legal needs to be able to make claims, they need legal service providers to be willing to take them on.

 One issue raised during discussion with stakeholders was that the reforms may have

changed the types of claims that are attractive to legal services providers, leading to them being more willing to take on certain claims than others.

One particular concern is that the reforms made it more profitable for legal service providers to take on low-value claims for motor personal injuries, and that this could have diverted attention from other personal injury cases. A consequence is that legitimate claims that have more of a chance of being disputed may be left aside by legal service providers in favour of easier-to-settle claims.

 Moreover, the fact that it is easier to make a claim does not tell us about the quality of

legal services available to the individual in terms of the outcome achieved. There is a potential risk that the increase in access to justice through it being easier to make a claim could be offset by a reduction in the quality of legal services available.

One mechanism through which a reduction in quality could occur is if the reform encourged legal service providers to take on certain types of claim, but only if they under- invest in these cases, thereby reducing the quality of the legal service provided. For example, the recoverability of success fees may have allowed solicitors to take on cases that had previously been marginally unprofitable, but only by reducing the time they invested in the case. However, it is also possible that the altered incentives for legal service providers could increase the quality of legal service provided for other cases. It should be noted here that the Jackson Review raised concerns that the recoverability of success fees and after-the-event insurance premiums led to high overall costs of personal injury legal services. In this report, the overall costs of legal services are considered relevant to access to justice insofar as they affect the costs faced by the individual. Nevertheless, it is important to highlight that there may be a trade-off between increasing access to justice and reducing the overall costs of legal services, as Jackson states:

‘It must be acknowledged that one of the benefits of the current CFA regime is that it is geared towards ensuring that claimants receive proper compensation.

5 │ Assessment of the impacts of regulatory and legislative changes in the personal injury market on access to justice

This, however, comes at a heavy price for defendants, who often have to bear a

disproportionate costs burden.’41

Liberalisation of advertising rules

An important part of access to justice is individuals’ knowledge of legal rights and of how to claim. Liberalisation of advertising rules allowed solicitors and other providers to advertise their services and actively reach out to individuals that have personal injury problems. Claims management companies may have had a particularly important role in advertising because it is typically larger firms that are able to advertise due to the fixed costs involved.42

The increased advertising of personal injury services could have increased access to justice through individuals with legal needs having more awareness of their legal rights and of the services available to them.

Whether or not the liberalisation of advertising rules would have led to an increase in access to justice depends on the quality of information provided by advertisers in relation to other advice available to those with legal needs. For example, we would expect advertising to have a limited effect on access to justice if existing sources of information prior to the liberalisation of advertising rules had done a good job of informing individuals of their legal rights and of how to make a claim. Additionally, benefits of advertising for awareness of legal rights may also be limited in that legal service providers are likely to advertise for services that are most profitable to them. This could lead to an increase in awareness of legal rights only in the areas of personal injury that are most profitable to legal service providers.

The extent to which advertising affects individuals’ responses to legal services may also be affected by behavioural biases. For example, for problems that are viewed as ‘legal’, individuals may be predisposed to respond to them primarily through legal routes, and consequently advertising would have a limited effect.

Liberalisation of the use of referral fees

The liberalisation of the use of referral fees in 2004 allowed solicitors to pay introducers for referring personal injury claims on to them. Referral fees could have affected access to justice in a number of ways.

41

Lord Justice Jackson (2009)

42

Charles River Associates (2010)

Hypothesis 2: The liberalisation of advertising rules led to an increase in access to justice