Responses to the survey from 212 councils in England and Wales revealed that 81% of councils say the introduction of CFAs has increased the annual cost to their authority of handling compensation claims. The number of compensation claims against 87% of councils has also increased, and 68% say the number of tenuous or fraudulent claims has increased since the introduction of CFAs.
Alan Hunter, Zurich Municipal claims manager, said:
'Legal aid was cut in order to reduce the burden on the taxpayer of funding fair and equitable access to justice. But the hidden impact of the introduction of CFAs has been to shift the burden from the Lord Chancellor's Department to the council tax payer, and to reduce the funds available for front-line public services. The government has, perhaps unintentionally, robbed Peter to pay Paul.'
Brian Briscoe, LGA chief executive said:
'The government should work with us to identify the effects on local authorities of the introduction of CFAs, and consider measures to compensate councils for the additional burden on their budgets. In the meantime, councils need to examine their procedures to ensure decisions are taken quickly so the sometimes punitive s uccess fees charged by lawyers are kept to minimum where claims are not specifically defended.'
Other conclusions from the survey include:
* 96% say lawyers and other advisers are encouraging people to make claims
* The most popular source of advice and guidance for councils on CFAs is insurance companies (84%), followed by the media (74%). Only 1% have received advice and guidance from the government
* 34% say they have increased the numbers of hours staff spend dealing with compensation, yet 40% say they do not have sufficient resources to deal with increases in compensation claims
* Only 31% of councils say they have made significant changes to the way they handle claims since the introduction of CFAs
* Research was conducted by RBA research, on behalf of Zurich Municipal and the LGA, between 2 June and 18 June 2003. 212 councils in England and Wales responded (representing 52% of all local authorities)
* Conditional Fee Arrangements (CFAs) have been in place since 1999,
introduced in response to the government's scaling back of the legal aid
budget. The success fees charged in CFAs have increased the number and cost
of compensation claims to public service providers and the council taxpayer.
Effectively the introduction of CFAs has shifted the balance of funding
access to justice, from the government's legal aid budget to the budgets of
individual public services, including local authorities.
* The LGA and Zurich Municipal are therefore keen to develop a 'one voice'
campaign to raise awareness of how the issue can be tackled by local
authorities and other public service providers, government and the tax
paying public. More specifically the aim will be to encourage best practice in mitigating the effect of CFAs on budgets.
* The LGA represents the local authorities of England and Wales - a total of just under 500 authorities. There are 34 county councils, 36 metropolitan district councils, 47 English unitary authorities , 33 London authorities, 238 shire district councils and 22 Welsh unitary authorities. The LGA also represents police authorities, through the Association of Police Authorities (APA); fire authorities and passenger transport authorities. A key feature of the LGA Regional Structure is the Welsh Local Government Association - the WLGA is a constituent part of the LGA, but retains full autonomy in dealing with Welsh affairs.