RMT Legal Services - Jackson Proposals

Dear Colleague,


I have recently had an annual meeting with one of the Union solicitors where we have had preliminary discussions regarding the impact of proposed legislation which will greatly affect the delivery of Unions’ legal services. At a time when we face huge challenges as a result of the Mc Nulty proposals we also face challenges from Lord Jackson. These reforms are an attempt to reform the civil legal system. The key proposals are:

· An end to after the event insurance

· No recoverability of success fees

· An end of referral fees

· Introduction of fixed costs in personal injury cases

I know your reaction to this will probably be “so what” you may even see this as an attack on greedy fat cat lawyers, however this would be wrong as these changes will fundamentally be an attack on the delivery of our legal service.

At the moment this Union self insures its members’ (in England and Wales only) personal injury cases, as we bear the risk of losing it is only right and proper that when we win we should recover the insurance premium; so that the pot of premiums then builds up to assist us to take on other cases, if we are denied this we lose considerable funding for future cases. The same applies to success fees where it is our Solicitors who take the risk. They recover the success fee from employers and that keeps down the Union’s legal costs.

Part of the proposed changes recognise that as a consequence of stopping the employers from paying success fees, lawyer will instead be able to recover a success fee from the injured party themselves and with this in mind it is proposed to increase damages for pain and suffering by a small percentage.

If we remove this fund we have to look to ways to fund the legal benefits this Union provides.

In addition if fixed costs are introduced regardless of the amount of work done it means that the costs are driven down to the lowest which in turn means that our solicitors will be forced to cut corners and reduce the amount of work and if they lose revenue on cases then it follows that they have to reduce their staff as costs reduce; or we have to make choices such as to pay more for Employment Tribunal cases ( we currently pay either nothing or a reduced cost negotiated by the Union); do the work ourselves or not take cases below a certain level.

At the present time our solicitors do a great deal of work for us for little costs on the basis that they get significant numbers of personal injury cases; in return for these cases we are able to provide legal surgeries for employment law and free legal advice for non work related matters as well as free wills; under the proposals this arrangement will be undermined financially and may also be regarded as a referral fee and will be banned so we will have to face the stark choice of how we wish to fund the extras.

If that isn’t bad enough there are now consultations on charging for employment tribunals and raising the time limit for qualifying for unfair dismissal from 1 year to 2 years. There are a number of options proposed but the bottom line is that members who currently lodge their employment tribunal claims will be forced to pay a fee of £150 to £250 when they submit the ET1 form; and will also be expected to pay a further sum of £250 to £1250 when the case is listed. At the moment there is no charge and our members often lodge their applications pending advice from our solicitors. We currently deal with around 486 employment cases per annum; so if we had to pay for this in order to protect a member’s case the Union will have to find extra money. How do we respond to these challenges are questions that we must ask and answer.

If the costs recovered in personal injury cases fall we will be unable to fund the large volume of employment advice that we currently cover in the way that we do; we may wish to take the employment service in house which will have implications for us in terms of funding. What is clear is that we need to give consideration over the coming months to the type of Legal Service we require for our members and the affordability of it and the Future. What is clear is that some hard decisions need to be made.

Yours sincerely,

B. Crow

General Secretary