Compensation bill gathers momentum

So broad and enthusiastic is the support for action on the new legislation that the Compensation Bill, published last month, is likely to be beefed up as it makes its way through parliament. A survey conducted by Aon revealed that 69% of all MPs do not believe the bill goes far enough, including over half of Labour MPs.

The bill falls into two parts. The first is an attempt to clarify the purpose of the law of negligence. This has been broadly welcomed but is viewed by some as an invitation to lawyers to rush to court to test it out, while others would like to see some of the tentative wording in the bill to be firmed up, in which they are likely to succeed.

The crucial second part of the bill deals with the regulation of claims management services and this is where the real battleground will be.

Broad agreement exists that the whole claims management sector needs to be regulated and the regime needs to be tough enough to eradicate the cowboys and ambulance chasers like those firms that advertise in hospitals or steal 25% of endowment mis-selling compensation payouts from people. They also want it to be resourced well enough that it can deal with the whole spectrum, including those, usually disreputable, firms that have scuttled offshore.

Whatever body is given this role is likely to find itself given real powers to regulate the sector. In theory, it will also be able to regulate the whole claims management sector. In theory.

Terms such as 'level playing field' are often trotted out but rarely with any real sincerity because there is always a 'but'. Lawyers, trade unions and the citizens' advice bureaux all have their excuses. If MPs want to do something about compensation culture and the abuses that allow it to spread, they must ignore special pleading and impose a tough, uniform and independent regulatory system on everyone on the sector.

There could yet be a third part to the bill. Virtually everyone agrees that the real driver of the abuses of the compensation system is the no win, no fee remuneration of lawyers. This is ignored by the bill. Many would like to see this rolled back and it is quite possible that attempts will be made to do that through amendments to the bill.