Response to interpellation 2023/24:532 on access to justice
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
I believe that all people are equal before the law and should have equal access to justice. I mean that legal protection in home insurance, the right to legal aid, and the court's obligation to examine the reasonableness of litigation costs are important parts of the system. I emphasize that insurance companies have a socially important function and that the Finansinspektionen's supervision is crucial 1. I want the majority of disputes to be handled in tribunals to avoid court risks 1. I believe that the right to a fair trial should be practical and effective. S believes that state legal aid should be improved 2. S suggests that the state should influence the insurance industry 2.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Justitieministern Gunnar Strömmer (M)
Madam Speaker! I have been asked what measures I am prepared to take so that more people will have access to justice, so-called access to justice.
Let me begin by emphasizing that all people are equal before the law and that everyone should also have equal access to justice. Having one's case examined by an impartial and independent court in a fair trial is a fundamental right and an essential part of the rule of law principle. Obstacles to accessing justice can take different forms. High litigation costs are one of them.
For those considering initiating a legal dispute, most home insurance policies today contain legal protection components that can provide compensation for agency and other litigation costs. For those who do not have sufficient economic resources, there is also a right to legal aid, which can cover costs for, for example, a legal representative.
It may also be worth mentioning that in civil cases, to which insurance disputes among others belong, it applies that the court has an obligation to ex officio and in every individual case examine the reasonableness, i.e., the fairness, of what a party has claimed in compensation for legal costs. This also includes the party's counsel costs. A certain cost control thus takes place within the framework of the courts' review.
For those who have suffered an injury and are not satisfied with the insurance company's decision, there are also various alternatives before a potential court process occurs, for example, to request a review or to turn to one of the independent boards in the field, such as the Patient Injury Board when it concerns patient injuries or the Traffic Accident Board when it concerns traffic accidents.
I also want to mention that the insurance companies' activities fulfill an important function, both for the individual and for society as a whole. The industry's activities are particularly regulated by law. When the legislation in the area was reformed, one stated purpose was to strengthen the policyholders' position in relation to the insurance companies. It is important to highlight that the Finansinspektionen shall exercise supervision over the insurance companies' claims settlement and that it, like the companies' other activities, follows good insurance practice.
These are important questions, and I will continue to follow the developments in the area closely. I look forward to discussing the questions here today.
Anna-Belle Strömberg (S)
Madam Speaker! I thank Minister of Justice Gunnar Strömmer for the answer.
Being affected by a personal injury and then being forced to dispute with an insurance company in court over the right to compensation can cost several million if one does not win, and even if one has insurance coverage for litigation costs, it can cost several million. The reasons for this are several.
The insured party bears the burden of proof for all claims regarding causation, the nature and extent of the damage, and regarding economic losses and loss of income. This applies to all litigation where someone sues someone else to obtain compensation, which is not strange in itself. But through the burden of proof, one as a private individual is at a disadvantage against a company. The insurance company does not need to prove anything; it is sufficient to flatly contest, i.e., to say no.
The insurance companies have, in principle, unlimited resources and have a tendency to hire agents who are expensive. The insurance companies have no incentive to keep down the process costs. They recover their costs through the insurance premiums and therefore, in sharp contrast to a private individual, do not need to save on expenses.
In the process, the insurance companies tend to contest issues in a way that forces out sometimes unnecessary exchange of correspondence and evidence through tactics. The injured party has to work hard for their case, which prolongs and makes the process more expensive. The insurance companies hire many and expensive experts to drive the case, which forces the injured party to try to meet the evidence as well as he or she can. Every process therefore becomes extensive, protracted, and very expensive.
A home insurance often contains a legal protection component that covers litigation costs in disputes. The ceiling in these insurances amounts to between 75,000 and 350,000 kronor, but a lawsuit can cost several million already early in the process. This means that the private individual who loses a lawsuit against an insurance company has to pay very large sums out of their own pocket when the legal protection is exhausted. Therefore, the majority of the people who receive a no from the insurance company choose to waive having their case examined in court, which is insecure regarding the rule of law.
Madam Speaker! My question to the Minister for Justice is: How does the government view proposals to introduce incentives for insurance companies to act more responsibly and fairly towards their customers, especially those who are economically vulnerable?
Justitieministern Gunnar Strömmer (M)
Madam Speaker! I thank Anna-Belle Strömberg for the opportunity to discuss these important issues here in the chamber today.
I will first make a more general reflection regarding access to justice. It is spoken of that there is a fundamental right to a fair trial. One basis is, of course, that one has access to this justice on equal terms, regardless of whether one has very large economic resources or lacks economic resources. I have myself represented many individuals in court who, without, for example, good support from counsel, would never have managed to take their cases to court.
The individual faces many obstacles, not only in this area. The risk of litigation costs, both own costs and the risk of taking on the opposing party's costs if one loses, is of course an obstacle. The legal process takes time. It can be very demanding to pursue legal processes over time. Often, you have a latent knowledge disadvantage against a more powerful and more resource-rich opposing party.
These are obstacles that every rule of law with self-respect must discuss continuously and consider how to handle depending on what kind of questions are to be examined. That we get the chance to talk about it now, in this case in the field of insurance law, I think is excellent and important. I want to thank Anna-Belle Strömberg for having raised the issue.
Depending on which questions are to be examined, our rule of law handles this in different ways. When it comes to insurance issues, it is such that if they end up in court, it is a dispute. It is not a criminal case with the rules that apply there, nor is it a fundamental question of human rights where certain other rules apply and where it is a question of litigation costs between the state and the individual. Here, it is instead a dispute between two private parties: an individual policyholder and an insurer, an insurance company.
Even though our model is based on the rules that apply specifically to litigation cases, which also include the main rule that one risks having to bear the opposing party's legal costs if one loses the dispute, there are still different cushions built into the system to make it more reasonable from the individual's perspective.
An important point, of course, is that the insurance itself shall contain legal protection, even if there are amount limits, as Anna-Belle Strömberg is pointing out, and the right to legal aid for those who do not have sufficient own economic resources. The court shall also make a reasonableness assessment in the concrete case to level out some of the conditions that Anna-Belle Strömberg raises. The court shall assess whether it is reasonable in relation to the issue the dispute concerns with, for example, very extensive legal costs on the insurer's side or on the policyholder's side.
In different ways, it is still the idea of tearing down or reducing some of the economic hurdles in the unequal relationship that exists between an insured person and an insurer.
An important part of the system is also to try to ensure that as few cases as possible end up in court at all. When it comes to patient injuries, there is the Patient Injury Board, and when it comes to traffic injuries, there is the Traffic Injury Board. It is a way to try to adjudicate the issues if one is not in agreement, without ending up in court with, for example, the cost risks that exist there.
I also mentioned the importance of supervision from Finansinspektionen, precisely because these companies have such a socially important function.
I am prepared to continue following the questions and see how this plays out in practice. Unfortunately, we cannot rule out that in individual cases it may still have unreasonable effects. But this is how the order looks, and fundamentally, I think it is rightly balanced.
Anna-Belle Strömberg (S)
Madam Speaker! I am pleased that the Minister for Justice takes these questions seriously and wants to continue to look at them and follow them. Hopefully, there will be something that we can move forward with based on this.
A large number of people suffer personal injuries. Approximately 30,000 are affected annually by injuries following traffic accidents. More than 21,000 patient injuries are reported annually. This is evident from statistics from the patient insurance Löf and statistics from Svensk Försäkring. Additionally, a large number of slip accidents, work-related injuries, medication injuries, and accident injuries occur, as well as personal injuries during transport by rail, aircraft, or boat.
When a personal injury occurs, it is almost exclusively insurance companies that settle the compensation to the affected person. The regulatory frameworks that govern the size of the compensations are developed by the Personal Injury Committee and the Traffic Accident Board's council, as the Minister described. The Personal Injury Committee is governed exclusively by the insurance industry. The Traffic Accident Board's council is governed by lawyers, trade union representatives, and insurance company representatives. The insurance company representatives have a large influence over the council's decisions. Often, it is also the insurance companies' representatives who investigate the issues before decisions are made in the council.
The compensation paid out after an accident can, in the case of more severe injuries, be completely decisive for the victim's future and finances. In case of disagreement regarding the amount of compensation, the injured person often has the opportunity to have the compensation issue reviewed by a committee.
The problem is that the injured party is not allowed to appear before the board and is also not allowed to call for oral evidence. Often, the board follows the insurance companies' assessments, and this is a major problem. From the Traffic Accident Board's annual report for 2022, it appears that there was agreement between the insurance companies' decisions and the board's assessment in over 73 percent of the cases examined during that specific year.
Until 1997, there was a possibility to grant legal aid in this type of case. One who has the possibility or has had the possibility to take out legal protection insurance cannot utilize legal aid according to the Legal Aid Act. The state has delegated the question of the individual's possibility for legal review to the insurance companies, as it appears today. The injured party is referred to the legal protection in the home insurance in the first instance. Even, for example, vehicle insurance contains a legal protection component.
The amounts in the legal protection components are determined by each insurance company. The highest amount known is 350,000 kronor with a deductible of 25 percent. In most cases, the litigation costs amount to figures over 350,000 already in the first instance, i.e., already in the District Court.
Madam Speaker! My question to the Minister of Justice is: Are there any plans at all to consider measures to ensure that insurance companies conduct thorough and impartial investigations before they make decisions on compensation claims, in order to avoid unfair rejections?
Justitieministern Gunnar Strömmer (M)
Madam Speaker! I thank you for the development of the question.
The insurance companies fulfill an immensely important social function. They have also been entrusted with important tasks in our society concerning the protection of individuals and helping individuals manage the consequences of various damages, whether it concerns property or personal injuries or whatever it may be. That, I think, is the first thing.
Naturally, from that perspective, we must have a legal regulation that is reasonable for the insurance companies. They have a socially important function, and it must work in a good way for those who have that function.
With the socially important role comes also a great responsibility. There is no doubt whatsoever that the individual in the concrete case will experience themselves to be and actually be at a disadvantage against a more resource-strong counterparty if they end up in a dispute tribunal or an insurance matter, and even long before they end up there. It is clear that it is very important that we also have an order that is balanced and accommodates the individual's rights in that relationship.
I have mentioned the Financial Supervisory Authority a few times. The most important thing is to ensure that it is correct from the beginning, before it ends up in court. There, for example, the Financial Supervisory Authority's supervision of the insurance companies is extremely important. It is intended to achieve what Anna-Belle Strömberg is perhaps above all looking for, namely that it should be balanced and correct in the first instance. I think that is an important point to highlight. I believe the starting point must be to avoid, to the greatest extent possible, having this type of questions end up in a court. There, the order of the boards is an important part of our model.
I shall comment on two parts of what is being raised regarding the boards. The first is that written procedures also apply to other areas. When it comes to consumer protection and those types of boards, it is usually a written procedure. It should be a simplified procedure and not like in court. One should be able to examine large volumes of cases.
I still think that several things that Anna-Belle Strömberg raises make it reasonable to ask the question of whether these processes can be developed. It is clear that it is very important that the individual experiences the review as fair. It is important that the underlying materials for the decisions made in the boards, even if they are not binding for insurance companies, are objective and impartial in their nature. It lies in the nature of the matter. And I think that is a completely legitimate discussion, even if I do not have any concrete proposals today on how that activity could potentially be developed. The review is very important. We want the majority of the disputes that arise to preferably be handled in the boards, so that one can avoid going to court with all the risks that exist with that.
Regarding the costs, I just want to say in conclusion: Yes, there is a certain conflict of interest here. On one hand, there are general rules regarding disputes that are reasonable, namely that the one who initiates a dispute should think it through in advance and not take unnecessary risks. The risk of being hit by the opposing party's litigation costs if one loses should, of course, also be somewhat deterrent when it comes to initiating unnecessary disputes. On the other hand, it is extraordinarily important that the courts ensure that there is a reasonableness in the litigation costs that are to be paid out.
Anna-Belle Strömberg (S)
Madam Speaker! The Minister of Justice has no proposals, but we Social Democrats have some proposals that he is more than welcome to take to heart.
We believe that the state legal aid should be changed and improved so that the victims have a greater opportunity to have their case examined in court. The state should, through dialogue and pressure, attempt to influence the insurance industry so that the insurance companies improve the legal protection insurance.
It might be possible to legislate on how the legal protection component in the insurances should be designed. One possibility would be for the state to provide a legal protection insurance that can be taken out by citizens and which amounts to such sums that the injured party has the opportunity to have their case examined in court. The state can also, through legislation, regulate how the litigation costs shall be distributed.
Madam Speaker! In conclusion, I would like to thank the Minister for Justice for the debate. I appeal to the government to consider ensuring that even economically weak citizens are granted equal access to justice and legal certainty when they face an insurance company in legal disputes.
Justitieministern Gunnar Strömmer (M)
Madam Speaker! I thank Anna-Belle Strömberg once again for the opportunity to discuss these important issues today.
We are in complete agreement that the right to a fair trial must not be theoretical and illusory, but it must be practical and effective, that is to say, that it must be available to citizens in practice. It also means that people must have a reasonable opportunity to pursue their cases in court, also in private disputes and also against more powerful opposing parties if that, as in this case, concerns insurance companies.
Several of the points in our order that I have highlighted, from the legal protection of the home insurance to the possibility of obtaining state legal aid, the order in committees as a way to examine a dispute without ending up in court, and the courts' obligation to examine the reasonableness of, for example, an insurance company's claim for litigation costs – all of this exists to level the odds between, on one hand, a weaker policyholder and, on the other, a stronger insurer when it comes to a typical case and the cases we are talking about here and now. That order, I believe, we shall maintain and develop.
Several of the proposals that have come from Anna-Belle Strömberg's side are, in and of themselves, worthy of further discussion. I think that legal aid issues and legal protection issues, not only in this area but also in others, are issues that are worthy of further discussion.
We announced last week that we will have a very specific issue investigated regarding legal costs, namely the possibility of obtaining compensation for legal costs at all in administrative cases when the state is the opposing party. It is an extremely important issue on that theme.
I also think that we should continue the discussion on how the order of the boards can both be strengthened and developed so that the individual receives a good and fair review.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.