No Win No Fee Crackdown

No Win No Fee Crackdown

No Win No Fee Crackdown

We reported last week that the government was looking to crack down on the "No win, no fee" culture that has engulfed the UK in previous years. We reported how the cost of these claim was pushing up policy prices for all consumers. There is currently a huge lack of transparency within this industry which has the providers running scarred.

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The Government has now started to release snippets of information on how this might be achieved. The justice secretary Kenneth Clarke has hinted that one of the main problems in this sector is the willingness of firms to go to court. The costs of such proceedings are huge, and for policy providers who employ top end legal representation the costs are even higher.

To combat this Government departments are looking at inserting other ways to resolve claims and disputes. It is unclear how this will actually be achieved by they hope that this will reduce the costs to all parties and therefore a reduction in policy costs. A report in national news last week on inflation noted that policy costs are increasing the highest ahead of food and commodities such as oil and gas.

To get an idea of how this cost saving can be achieved we can speculate to how this will be achieved by looking at how the Government have tackled this issue in other areas. In Employment law tribunals are similarly as expensive so there was the process of mediation added.

Mediation is an official process that is conducted outside of the court room. Mediation is essentially a way to resolve disputes in a quick and less formal manner. The process works as follows, the meeting is run by a third party mediator. The mediator is in place to facilitate the process of the meeting and to assist in problem resolution. The aim of the process is to come to a compromise arrangement so the process does not go to court.

However if the process does not come to a resolution court is always an option. Whilst many think that if one party is determined to get to a courtroom they can be obstructive in the mediation process leaving court as the only option. However in practice mediation does work very well, also if one party is obstructive this would of course be noted to the courts and would be looked poorly on by any judge.

I think in this case any action that can be taken that aims to reduce policy costs for consumers has to be a great step forward. So I hope the government can move quickly on this so we can start seeing some positive reduction in the ever increasing policy costs. Also we hope that the number of fraudulent and poor claims is reduced so those that have a genuine case can be seen and resolved quicker.

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