In this article Optimal Solicitors discusses how claims for personal injury are changing and the effect this will have upon levels of damages and the availability of legal representation for injured Claimants.
Most people are aware that if they suffer injury because of someone else`s fault they can claim compensation. Years ago, the process of claiming compensation was a quiet, boring industry that did not attract very much attention from the media or the Government. However, following the virtual abolition of legal aid and the introduction of a “no win-no fee” system a new and somewhat less restrained market opened up. Very soon you could not switch on your radio or TV without someone offering to take your case on a no win no fee contract.
In the early days, this new system found favour with everyone except the insurance industry who largely had to foot the bill. Solicitors would take on a client`s case in the knowledge that if they won the client would receive the compensation due and the solicitor`s fees would be paid under a long-standing rule of law that says, in most cases, the loser must pay the winners legal bill. The Solicitor could charge a success fee (a bonus for winning) on top of the standard fee and the guilty party`s insurer had to pay the lot. A good scheme but one that was too good to last.
Claims for personal injury are changing
Reforms have been chipping away at the system for some time now. A few years ago, the rule that allowed the Claimant`s Solicitor to charge the success fee to the insurer was abolished. From then on, the success fee had to be paid by the Claimant personally. Around that time, a system of fixed fees was introduced which limited what a Solicitor could charge for such work. Solicitors complained bitterly about those changes at the time but worse was to come.
Changes currently before Parliament will tighten up even further by not only limiting what the Solicitor can charge the party to blame, but by also putting a cap on the amount of compensation that can be awarded. In the past Solicitors have been able to take on cases in the knowledge that the insurer will pay their bill if they win. When the reforms become law in most cases the insurer will no longer pay the Solicitors bill. Instead, those cases will fall into what is known as the small claims track (some still refer to it as the small claims court). Such claims fall outside of the rule that says the loser must pay the winner`s legal bill. Assuming these proposals become law, any motor accident injury claim with a value of £5000.00 or less will be a small claim. In non-motor cases the limit will be £2000.00. What that means in practice is that most routine personal injury claims will become small claims. Under such a regime the client must either pay the Solicitor`s fee or act alone without any legal representation.
The unwelcome news does not end there. There will also be what is known as a tariff system which means there will be fixed amounts of compensation allowed for certain injuries and they will not be generous. For example, a typical whiplash injury sustained in a motor accident will result in an award of £1,190.00. At present a court could award between £3000.00 and £5000.00 for such an injury.
There are challenging times ahead for both clients and their Solicitors. The profession is planning for these changes and it is hoped that with developing computer technology and improved efficiencies the more innovative firms will be able to help people manage their way through what is a complex process at an affordable cost.