Come on, you’ve spotted it haven’t you?
I am not talking about Ken Clarke’s reference to the cost of litigation to the NHS. He said lawyers fees were £456m when in fact claimant fees were just £104m. He got himself a little confused with £456m being the total cost to the NHS including damages. Convenient eh?
No, I am talking about Labour funding.
Now I am sure you all know that a large chunk of funding for the Labour party comes from the Trade Unions (about a third) and so if there was a way for the Conservatives to attack this in a legitimate way then this would be a nice little bonus.
Step forward Ken Clarke and his need to change the personal injury claims system. One of the changes was of course to remove the recoverability of After the Event Insurance from the defendant. A small clause was also added to the announcement, and I quote:‘The recoverability of the self-insurance element by membership organisations, equivalent to the ATE insurance premium, will also be abolished. Some trade unions and other membership organisations self-insure in this way.’
What is this? Well, if one of a Trade Union’s members had an accident, they were ‘covered’ by their Union against adverse costs and disbursements for making a claim. In return, the Union was permitted to recover a premium for a notional After the Event Insurance policy from defendant insurers when their member was successful in their claim. This sum was often higher than actual ATE Insurance policies and allowed Trade Unions to massively subsidise their membership fees.
Well this has now been taken away so an enormous amount has been wiped from the coffers of the Unions. Now they could increase their fees to compensate but times are hard so I don’t think so. The easiest way to balance the books would be to spend less (can you see where we are headed here?).
I think Labour is going to suffer with these changes. I don’t think they have thought this through. Clearly the Tories have.