The potential impact of the new Labour government on the legal industry

Following Labour’s victory in the 4^th July election this year, many professionals within the legal industry have been speculating on the potential impact this new government may have on the legal landscape.

The most obvious impact will be on the employment law landscape; however, will the new government impact the legal industry as a whole?

Keir Starmer, the leader of the Labour Party and now Prime Minister, is a qualified barrister with a distinguished career in law. His background as a barrister brings a unique perspective to the role, potentially influencing how legal reforms are approached. Having someone who could be described as “one of our own” at the wheel could lead to a better understanding of the challenges faced by solicitors and their clients.

The potential impact of the new government on clinical negligence fixed costs

One of the most prominent questions is whether the new government will delay or halt the clinical negligence fixed cost scheme’s introduction. Despite the ambitious October 2024 target, several experts believe that April 2025 is a more realistic implementation date.. However, it is widely thought that the new Labour government is unlikely to derail the scheme entirely. This sentiment is shared by many in the legal field, who argue that the process is too advanced for the new government to scrap it entirely.

Legal professionals have expressed concerns about the potential rushed implementation of clinical negligence fixed costs. Adequate time for law firms to adapt and plan for the new rules is crucial to ensure access to justice is not compromised.

It was stated by Lord Justice Birss, the Deputy Head of Civil Justice at last month’s open meeting of the Civil Procedure Rule Committee, that there were “fundamental issues” with the rules that needed to be resolved before they are implemented.

According to the Association of Consumer Support Organisations (ACSO), Birss LJ highlighted that, if the summer practice direction update was missed, the new rules would have to be implemented in April 2025.

The legal sector has faced numerous reforms over the past 14 years and has continually adapted. However, the introduction of fixed costs in clinical negligence is a particularly contentious issue, with significant implications for both legal practitioners and injured parties.

While the general election on July 4th is a significant political event, its impact on clinical negligence fixed costs cases appears minimal in terms of outright cancellation.

A delay to ensure a well-thought-out and effective implementation seems more likely, potentially pushing the start date to April 2025. The legal community continues to watch closely, advocating for a measured approach to these important reforms.

Upcoming changes to employment laws

Starmer has pledged a number of reforms to employment laws within his first 100 days in power to enhance workers’ rights and improve workplace conditions.

Strengthening workers’ rights

The Labour government has pledged to strengthen workers’ rights, ensuring fair treatment and protection against exploitation. Key aspects of this promise include:

• Abolishing zero-hour contracts: Introducing legislation to eliminate zero-hour contracts, providing workers with more job security and predictable income.
• Enhancing sick pay and parental leave: Increasing statutory sick pay and parental leave entitlements, ensuring workers are adequately supported during periods of illness or family needs.
• Guaranteeing fair wages: Raising the national minimum wage to a living wage, ensuring that all workers receive fair compensation for their labour.

Promoting workplace equality

Labour has committed to promoting equality in the workplace, focusing on reducing discrimination and ensuring equal opportunities for all employees. This includes:

• Mandatory gender pay gap reporting: Extending gender pay gap reporting requirements to include smaller businesses and introducing similar requirements for ethnicity and disability pay gaps.
• Strengthening anti-discrimination laws: Enhancing protections against workplace discrimination, making it easier for employees to challenge unfair treatment.

Supporting trade unions

The Labour government has promised to support trade unions, recognising their role in advocating for workers’ rights. Proposed measures include:

• Simplifying union recognition: Making it easier for unions to gain recognition in workplaces, enabling them to better represent their members.
• Protecting the right to strike: Ensuring that workers have the right to strike without facing punitive measures, protecting this fundamental aspect of labour rights.

The proposed changes to employment law are likely to lead to an increase in demand for legal services from both employers and employees. Employment solicitors can expect a rise in cases related to:

• Employment contracts
• Discrimination claims
• Union Representation

Employment solicitors will have opportunities to specialise and grow their practices in response to the evolving legal landscape.

How can Recovery First assist?

If you’re concerned that the upcoming changes are likely to have a adverse impact on your law firm, you may wish to consider exiting the market.

Selling Work in Progress (WIP) as a means to exit the clinical negligence market can serve as a beneficial strategy for firms impacted by the new fixed costs rules. This approach enables firms to redirect their attention towards more lucrative practice areas.

In the worst-case scenario, you may choose to close your firm, or be required to due due to insolvency. Recovery First can assist you in this situation to ensure a compliant closure mitigating the risk of SRA intervention.

Whichever route you choose to take for your firm, Recovery First will ensure the most positive and profitable outcome is achieved.

Our clients receive 100% of their recoverable WIP, plus their allocated entitlement to deductions from damages and their paid disbursements, anecdotally returning significantly higher value than a traditional WIP sale.

The unique scheme offered by Recovery First is suitable for both law firms and for professional advisors working with law firm clients. Our team manage the transfer of files from start to finish; placing case files with an approved law firm to protect the integrity of the client’s case, while at the same time maximising the value of the work in progress.

We guarantee 100% confidentiality for all clients. If you would like to find out more about Recovery First’s process, feel free to get in touch today.