Changes to "no-win-no-fee" legal arrangements would mean that only the wealthy will have access to justice, the Law Society said today.
Peers in the House of Lords will discuss altering the legislation in a bid to eradicate "compensation culture" but the move would instead penalise victims of accidents, fraud, negligence and wrong-doing as well as small and large businesses and even the government itself, the society said.
The group, which represents solicitors in England and Wales, called on the government to think again about proposals in part two of the Legal Aid, Sentencing and Punishment of Offenders Bill.
Under the proposals claimants will have to pay up to 25% of their legal fees out of their own damages, rather than the wrong-doing party having to pay.
The insurance lobby, rather than the victims. will be the clear winners from the change, the society said.
Cuts to legal aid provision will allow 725,000 people per year, who would have been previously taken to court, to evade the justice process and changes in the "no-win, no fee" mechanism will saddle small businesses with additional costs, to the benefit of bad debtors, it added.
Desmond Hudson, chief executive of the Law Society said: "The expansion of 'no win, no fee' arrangements was made in the late 1990s to compensate for the reductions in legal aid funding at that time.
"The then government acknowledged that without legal aid, some other funding mechanism was required. This time however, the Government is proposing to further reduce legal aid spending while effectively dismantling the 'no win, no fee' system, which will leave many people without effective access to justice."
Changes to "no win, no fee" rules will not assist the government in making savings and instead risks a substantial transfer of money from injured victims and claimants to the liability insurance industry while increasing costs to the NHS, the Law Society said.
Hudson added: "The changes to 'no win, no fee' arrangements represent a complete and unnecessary policy about turn, when a lean on the tiller would achieve the desired improvements.
"They favour the wrong-doer and their insurers rather than the injured person. We call upon the government to think again otherwise the only result will be rejoicing in the boardrooms of insurance companies at the expense of the injured victim."
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