Thursday, 24 May 2012

Justice for business and supporting growth

On 8 May, the Ministry of Justice (MoJ) published a report; Justice for Business, summarising its programme of reforms. According to the document, these reforms are aimed at transforming the justice system by making it more effective, less costly and more responsive to the public. So how does it measure up?

The report highlights the MoJ's progress against their Action Plan for Growth in the Legal Services Sector which was published May 2011, and its achievements under the coalition government.

“[The MoJ is] supporting increased competition and growth within the UK legal sector by implementing Alternative Business Structures (ABS)”. In October 2011, the MoJ began legislation allowing the creation of ABS; provided for non-lawyers to partially/fully own, or to control firms providing legal services. Some legal expenses insurers have taken steps to become an ABS but at ARAG, we have no intention to join up. Instead, our aspiration is to work with legal practices as partners, not compete against them.

"We [the MoJ] are working to ensure that costs for participants in civil court cases are proportionate.” ARAG is a member of the Consumer Justice Alliance (CJA), which has been formed to highlight the impact that Lord Justice Jackson’s proposals on civil litigation will have on injured victims. Despite opposition, the reforms, contained within Legal Aid Sentencing and Punishment of Offenders Bill received Royal Assent on 1 May 2012. The government is now considering other measures necessary in the implementation of the Act such as the introduction of Qualified One-way Cost Shifting (QOCS), which could have a negative impact on third parties insurers and local authorities.

“The MoJ is moving towards implementing fees for employment tribunals. This will ensure that tribunals are able to focus on genuine claims and help to avoid business being faced with unnecessary or unfair costs.” These changes aim to encourage potential claimants to consider the strength of their case, which they hope will lead to “more realistic expectations for individuals and greater certainty for employers.” There have been mixed reactions to these changes but ARAG is closely following developments to ensure that our products provide the best cover for clients.

“We [the MoJ] are taking forward measures to reform the civil justice system, helping individuals and businesses resolve disputes.” The MoJ is implementing a range of measures which will benefit businesses by making dispute resolution quicker and less gruelling. These include proposals to speed up the process of resolving small claims, increase the small claims limit from £5,000 to £10,000 and refer more cases to a Small Claims Mediation Service. ARAG is working in partnership with Go2mediation to provide an online mediation service. The aim is to reduce costs of litigation and save policyholders the time and stress involved in court proceedings.

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