In 2013, the government introduced a raft of reforms designed to reduce the number and cost of personal injury claims being made.
As part of those reforms, successful claimants became unable to recover their full legal costs. In addition, the amount of legal costs payable by the defendant’s insurer in most cases became fixed. This meant that (a) the vast majority of successful claimants became responsible for paying some costs out of their own compensation, and (b) the claimant’s solicitor would no longer be paid for their actual time or work done as only a fixed fee would be recoverable from the defendant.
A long overdue analysis of the impact of those reforms has shown that this has resulted in claimants now recovering 17% less in compensation in higher value cases. What’s more, claimants now have to pay legal costs out of that reduced compensation.
Why? A few different factors are at play:
Non-specialist firms have started providing personal injury legal services, with many of those firms failing to achieve the same results for their clients as more experienced firms.
Furthermore, the reduced recoverable fixed costs paid to claimant lawyers can result in cases being handled by less experienced lawyers. There is also less incentive for claimant lawyers to spend the extra time and effort doing everything possible to maximize the amount of compensation for the client, when the lawyer knows that they will not be paid for that additional work.
A review by the Ministry of Justice also briefly examined the effect that these 2013 reforms have had on claimants being able to find a lawyer to take on their case. Claimant lawyers suggested that they used to be willing to represent clients with cases that had a +40% chance of winning but now most firms require prospects to be much higher (often +60%). This makes it harder for those with less straightforward cases to access justice.
With the Civil Liability Act due to prevent claimants from being to recover ANY legal costs for the vast majority of injury claims relating to motor accidents, this reduction in compensation levels will
almost definitely get worse as injured claimants will be unable to use lawyers to assist them with their claims and, in soft tissue injury claims, the levels of compensation will be fixed by a new tariff which will reduce compensation levels in most cases
to hundreds of pounds, rather than thousands.
That is why it is important to ensure that, if you are seeking a lawyer to represent you in an injury claim, you look to instruct a firm that prides itself on getting the best possible results for their clients – a firm that will go the extra mile for clients despite the restrictions that these reforms seek to impose.