The role of Legal Expenses cover in mitigating the challenges facing the UK justice system
Authored by ARAG Marketing Manager Rachael Wornes
The impact of the pandemic on schools and our health services has been widely publicised, but the UK justice system is enduring challenges every bit as acute and, in some areas, seems on the brink of collapse. In the below feature, Rachael Wornes, marketing manager for ARAG UK, examines the consequences of the justice failure and the part legal expenses insurance is playing to mitigate it.
While the difficulties being faced in the criminal justice system may occasionally make the headlines, the problems achieving justice in civil matters have received much less attention.
Widespread failures and delays in the criminal courts have the most serious consequences, of course. Those wrongly accused may now have to wait years for their names to be cleared, while the guilty are more likely to evade justice if witness recollections fade or evidence has not been properly gathered during underfunded investigations.
However, civil courts and tribunals are facing delays that are, in many cases, even greater and the impact of them can be devastating for the individuals involved. The victims of clinical negligence and those unfairly dismissed are just two examples of people often dependent on a functioning justice system to start rebuilding their lives.
While it is difficult to compare such personal suffering with the commercial world, the impact on those running small businesses can also be catastrophic. Many SMEs have endured an incredibly difficult two years, now being compounded by a new financial crisis, so resolving a tricky legal dispute could be critical to commercial survival.
A problem that pre-dates the pandemic
The UK justice system was struggling long before COVID-19. During the period of austerity following the 2008 financial crisis, cuts to Ministry of Justice (MoJ) budgets were among the most severe. Legal aid has been withdrawn for most types of cases, many courts have been closed, and hearings are frequently abandoned because buildings are falling into disrepair.
While there were already significant backlogs across the courts and tribunals before 2020, the pandemic exacerbated the problem. Most observers acknowledged that the legal profession did a remarkable job of ‘keeping the show on the road’, but the initial closure of courts and subsequent, necessary restrictions inevitably increased delays.
At the same time, the number of some types of civil cases coming into the justice system hardly slowed. The unprecedented commercial circumstances and tightening economic situation have prompted disputes between companies over contractual terms and unpaid debts, while the furlough regime barely seems to have tapered the flow of employment claims.
The number of employment tribunal applications was rising before the pandemic, but the last three months of 2020 saw more single claims than any quarter since the ultimately abortive attempt to introduce tribunal fees in 2013.
A long-term problem
None of the challenges facing the civil courts is likely to get any easier in the near future. The looming recession is only likely to generate more disputes for more businesses, and failures in criminal justice will understandably get any political attention and, as a result, are likely to see the lion’s share of any increased funding that can be found for the MoJ.
Even if the civil courts and tribunals were to receive the significant injection of cash that they desperately need, it would take some years for improvements to be made and backlogs to be reduced. There is unlikely to be any swift panacea for the crisis in civil justice.
Legal expenses insurance has no magic wand to wave, but it is already playing a vital role in supporting the civil justice system through these very difficult times.
It is no surprise that the popularity of commercial legal protection has risen significantly over the past two years. The shock of the pandemic prompted a huge wave of legal questions for SMEs, especially around employment, health and safety legislation, tenancies and contracts.
The subsequent influx of claims that we predicted was mitigated by the various economic support measures introduced by the government, but companies are finding themselves in more disputes and are certainly much more aware of and vulnerable to legal risks.
A force for good
Legal expenses insurers have long played a role in saving the courts for matters that genuinely warrant judicial attention.
Easy access to a legal advice helpline gives businesses the guidance to avoid legal problems and head off emerging issues, before they get out of hand. For minor disputes, advisors also guide policyholders to other tools and resources that can be used to resolve matters without troubling the judicial system.
While sometimes questioned, the ‘prospects of success’ clause that is fundamental to the widespread availability of affordable legal protection policies also plays an important role in filtering frivolous, hopeless and ill-advised litigation and preventing it from clogging up courts.
Even for larger, unavoidable claims, legal insurers are great proponents of mediation and other forms of alternative dispute resolution that are playing a rapidly growing role in delivering access to justice that is typically much swifter and more amicable for the parties involved.
Legal expenses insurance is not going to solve the significant structural problems facing the civil justice system in the UK. However, as the current financial crisis deepens and the challenges facing the courts continue to mount, legal protection has an important role to play in providing access to justice, whether that be through the courts or by other means.
ARAG UK is a specialist legal insurance provider and is part of the internationally recognised ARAG Group which serves 14 countries worldwide.
Providing several emergency assistance insurance products and an innovative range of Before-the-Event and After-the-Event legal insurance products and services, ARAG UK prides itself on its client-focused approach. This has been recognised by the industry following the results of the Insurance 360 Legal Expenses Insurers Study in which ARAG UK was voted 'best legal insurance provider'. youTalk-insurance sharing ARAG UK insurance news.
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