All eyes on the insurers according to former Justice Minister

This article was published on: 03/26/13

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The former Justice Minister, Jonathan Djanogly has warned insurers across the United Kingdom that the ‘eyes of government’ will be on them from the 1st of April onwards, and whether or not they deliver their promise that wholesale cuts to legal aid will lead to decreases in insurance premiums for the consumer.

Talking about the future after the reforms are implemented he told Litigation Futures: “The eyes of government are going to be on the insurance industry. Government expects them to respond and I think that’s the general feeling among MPs. We are looking for changes.”

It was Djanogly who oversaw the introduction of the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO) before he was replaced by Helen Grant, and has no regrets over the reforms.

Talking about his time as Justice Minister he said: “When I became a minister, I spent most of my time arguing that there was a compensation culture. 10 Downing Street were very keen that insurance premiums should be brought down and they saw that the compensation culture was part of that.”

He pointed out that ‘incremental reforms’ were brought in after it was accepted that there was a compensation culture, including ending recoverability of success fees and after the event insurance premiums (ATE Insurance) as well as the referral fee ban himself.

This was despite the government consultation suggesting that only 7% of whiplash claims were actually fraudulent, a fact that Djanogly still buries his head in the sand over by insisting his instinct told him that these figures were wrong.

He also supported the proposals to increase the small claims limit from £1,000 to £5,000, describing the current limit as ‘out of date’ and claiming that the figure as it stands was too low. He also dismissed the notion that the changes are out of the blue and said practitioners have had a year since LASPO was passed to prepare for the changes, despite the implementation timetable and some of the details of the reforms being slow to emerge.