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Small Claims (Courts)

: I am grateful to the hon. Gentleman for those figures. They do not surprise me. They are slightly higher than figures that I found elsewhere, but I am grateful for the intervention, as it reflects the reality of what happens in the outside world rather than in the hallowed corridors of the Palace of Westminster. The argument advanced by the insurers is one of disproportionate cost. According to the Committee's report, they claim that the costs are equivalent to 65 per cent. of the value of claims and some 40 per cent. of the total pay out. The question is why those costs are so high. It is because the insurance companies fight claims tooth and nail. They hope to deter claimants from bringing cases to court. They deny liability when they should not, they make silly offers, and they take cases too far along the track and then to court when they should have paid up earlier and properly. If they did so, the costs would not be so high. The cost of bringing claims is high because that is what it takes to make the insurance companies pay out. If the insurance companies want to limit their costs, they should accept liability and pay up early. There are other solutions. The Law Society's briefing for today's debate makes it clear that discussions are ongoing to try to simplify procedures. We have already seen the introduction of various protocols and more can be done in that direction to try to reduce legal costs. For example, we have seen fixed costs in road traffic cases. That is another way to reduce costs. In the end, not all legal costs will be eliminated, not even in the small claims court. A medical report will be needed—one from a GP may be satisfactory—as will a police report. All that will cost money, and that will have to be factored into the insurance companies' equation come what may. The insurance companies are not going to pay out on a road traffic case without a police report, and the cost of that now runs into three figures. To suggest that it is all down to thieving lawyers is a misrepresentation of how legal costs accrue. What will be the effect of the increase? If it were to go up to £5,000, 75 per cent. of personal injury claimants would be deprived of legal advice and assistance. If it were to go up to £2,500, as the report proposes, 52 per cent. would be deprived of that right. It would pose a far greater risk of injustice for the ordinary man or woman in the street than to the mighty insurance companies if the latter had to pay costs in cases that, by definition, they would lose and on which they should have paid up earlier.