Compensation Bill [HL]

This is becoming a fascinating debate. It is vitally important that if public money is to be utilised it should be plainly shown that the public is receiving value for money. The Minister is quite right, of course, to explain that this is a shifting market place. One of the areas of greatest concern—I raised this earlier in Committee—was the claims farmers who were providing a service in respect of endowment mis-selling and taking up to 25 per cent of the fee even though there was a free service available. That is in the back of my mind as I now explore some of the consequences of what the Minister has just said. I recall that the Better Regulation Task Force report of May 2004, Better Routes to Redress, considered the whole claims management arena and advocated the use of contingency fees, which, I suppose, is what the claims farmers are utilising at present. They are taking a percentage of the compensation that is due to the person who has been mis-sold an endowment policy. I recall that the Arculus report recommended that further research should be carried out on the contingency fees. It said:"““Recommendation 5: Towards contingency fees: The Task Force recommends that the Department for Constitutional Affairs should carry out . . . research into the potential impact and effectiveness of contingency fees in securing access to justice in the UK””." As I understand it, there are contingency fees in the area of endowment mis-selling and in employment tribunal cases. As we are now talking about this area, I recall that originally the Government set their face against contingency fees in November 2004. What about the continuing practice of claims farmers charging a percentage in endowment mis-selling claims and the existing practice of contingency fees in employment tribunal cases? At the conclusion of all these debates about claims management companies, I hope that there will be a fee to match the quality and extent of the advice. This is a further reason—I promised to try not to say it again—why I think that a body like the Financial Services Authority, which is aware of all these different dimensions, is already able to cope with the difficulties that are thrown up by the practices of claims management companies and is dealing with some of the same issues in the regulation of those giving advice, would be the more appropriate regulator. Now that we are into fees and costs, it would be helpful if the Minister could write to me on the wider issue of contingency fees if she is not able to give me a reply now.