Law

UK Legal Industry Stagnation Explained From The Other Side Of The Barricade

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The process of restoration of the UK economy after the crisis was slow, in some sectors the country still has not recovered. ‘In times of unprecedented financial problems the legal sector cannot be excluded from of the government’s plans, the taxpayers’ money should be used wisely’, –a governmental representative Chris Grayling explains. ‘We believe that this policy should be reflected in the amounts that are paid to lawyers. Qualified specialists will be available as earlier, as of now the contracts will be signed only with those who meet the standards of the profession. The wealthy defendants who can pay their own bills for legal advice and representation should do it. Our project [cutbacks] aims to allocate taxpayers’ money wisely and in no way affect someone’s rights for a fair trial’.

‘We spend two billion pounds annually, and we have one of the most expensive systems of legal protection in the world, even after the reform, it will remain very generous’, ministry spokesperson says. ‘The latest figures state that more than 1,200 barristers worked in tax-covered sector and received 100,000 pounds (about $160,000) per year in the form of fees, six barristers received more than 500,000 pounds each. We absolutely agree that lawyers should be fairly paid for their work, and are confident that our proposals directed just at it’.

Lawyers, however, do not agree neither with the above numbers nor with optimistic forecasts. This is the third strike this year, though the previous year was not marked with tranquility and silence. The idea of legal aid cutbacks came from the Ministry of Justice in April 2013, and that summer, the lawyers went on strike. In January 2014, they again went to the building of the Ministry with the posters. Such shares were held not only in London but also in other major cities in England and Wales. In court, the Old Bailey (London’s main criminal court), the jury retired to ponder verdict in the case of terrorism, leaving behind an empty room, because of the protests, except judges, no one appeared. Judge Gerald Gordon shrugged sheepishly before surprising the jury: ‘As you can see, I am now in splendid isolation’. Association of Criminal Defense Lawyers reported a massive abstention in the courts of London, Manchester, Liverpool, Bristol, Winchester, and other cities, lawyers refused to work for an hourly fee below the minimum wage in the country (in terms of time).

On March 7, another protest was held, in which, as in previous ones, attended by lawyers working in the field of criminal law. However, on March 31 and April, 1 no strike was active since an agreement with the Ministry of Justice was achieved. Grayling agreed to postpone the adoption of the most ambitious measures relating barristers, until 2015, when the figures are likely to be revised, but until 2018-2019 the program is expected program to be fully implemented with a reduction of appropriations by 215 million pounds.

In the meantime, despite the protests, phenomenal cases occur. Therefore, such companies manage to grow: thus, Forster Dean Solicitors, a noteworthy UK no win no fee agency, has managed to enlarge its network despite the stagnation in the industry and replenished its list of services with motoring solicitors (also known as drink driving solicitors). Moreover, that’s not the only example: drop in at Solicitors Guru and find a solicitor – perhaps, the largest legal platform in the UK, to get insights on the latest trends, the examples of successful companies are many.

Why Have No Win No Fee Rules Changed?

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According to experts, the rules gave birth to myriads of spurious legal claims, while the numbers kept on increasing with every year. Therefore, the amount of ‘whiplash claims’ has increased by 25% since 2010, which goes against a decreasing road traffic accidents number.

Another case to pay close attention to is a profitable sideline called into existence by legal establishments for those who deal with details and parts of vehicles suffered an accident (the components are sold to legal representatives). A no win no fee policy naturally contributed to a huge increase in accident claims, since an individual practically has nothing to lose if the result of an effort is a failure.

In turn, such attitude contributed to the changes in legal ranks: since a customer doesn’t care much about the costs, a savvy services provider steps up to increase pricing numbers. Some financial and law experts also believe that a success fee is hardly reflecting the real effort put into achieving the desired results in a solid number of cases (an exaggeration in ‘price – effort’ is what they mean exactly).

A price growth for legal costs turns into a tendency, and more respectable insurance companies attract more customers with their status and advanced offers, which gives a legal establishment a chance to keep on reconsidering their pricing policy on a regular basis. In accordance with the data provided by the Association of British Insurers, legal customers contribute to an average £2.7m reward through premiums for personal injury solicitors.

In a legal costs review for 2012, provided by David Young, NHS is reported to pay £8bn for claims in previous 5 years, and the damages payment totaled as little as 30%, while the rest amount fell to legal cases lot. A sufficient amount falls on taxpayers shoulders in full measure, plus the claims against local authorities may provoke another increase in taxes, meaning that a council tax may be affected.