Insult to Injury

The Ministry of Justice has asked stakeholders for their views on proposals to slash legal fees by around 60%, starting from April 2013.

The move forms part of the Governments proposed reforms to deal with the “spiralling cost” of personal injury claims by slashing fees and making clients pay for representation.

Solicitor’s fees for certain personal injury cases have been fixed by the Government for several years, but the new figures suggest that from April 2013 the fixed fees for a Road Traffic Accidents will drop by just under 60%.  In addition, Accidents at Work and Public Liability (Slips and Trips) cases will also be brought within the fixed fee regime, despite the fact that they are much more complex with a correspondingly lower success rate.

The changes have been brought about following pressure from insurance groups, such as the Association of British Insurers, who claim that insurance remains at an all time high as a result of “greedy” lawyers using “no win no fee” agreements and that they are unable to reduce premiums until something is done about it.  Both insurers and the Government have conveniently ingored the fact that costs in RTA cases have been fixed for many years, and a new streamlined process, which was even cheaper, was introduced only two years ago to cut costs further.  The ABI and insurance industry promised to bring down premiums if those systems were implemented, which is why we now all enjoy cut-price car insurance….. Sorry, I have just been informed that I am mistaken and that over the last two years my car insurance premiums have actually risen, despite the cut in fees.  Oh dear.

You would have thought that the Government would be collectively bright enough to realise that reducing an insurance company’s outlay does not bring down the cost of motor insurance, it just increases the profit.  Unfortunately, nobody involved in the reform process appears to be familiar enough with how personal injury cases actually work in practice to be able to deal with the matter coherently.

Most worryingly, the Government plans to offset some of the losses that Solicitors will face by making the injured person pay for their own legal costs.  The present “no win no fee” system was brought in to replace legal aid, and it works by allowing Solicitors to run a case without charging their client anything at all.  If the client wins his case, the law says that he is entitled to payment of his legal costs, so the Solicitor sends his bill to the opponent insurers.  We are allowed to add on a “success fee”, which is again set by the Government.  The rationale behind that uplift is to compensate us for having to wait (sometimes years) for payment, and to put pressure on insurers to settle cases early whilst the success fee is reduced.  After all, if there are no consequences of defending a case to trial and losing, why bother admitting liability and paying up at an early stage?  The system works well, and if insurers approach investigation of the claim on a sensible basis then the success fee percentage is relatively small.

The Government will remove the ability for Solicitors to claim the success fee from the other side.  Instead, it will need to be paid by the client.  From April 2013, if you have an accident that was not your fault you can bring a claim for damages against the other side, but if you win you will have to pay your Solicitor a percentage of whatever you receive for certain heads of loss.  The point of damages is to “compensate” your for your losses, or what you have been through as a result of somebody else’s negligence, but instead you will not actually receive all of the compensation that you deserve.

It is not in force yet but if previous history is anything to go by this Government will simply ignore our pleas and blunder on with the proposals regardless.  The result?  If you have an accident after April 2013 you will only recover some of your damages from the opponent and you will have to pay the rest to your Solicitor.  Now that is adding an insult to injury.

If you have sustained personal injuries in an accident call David Mayor or any of our Personal Injury Solicitors for a free consultation on freephone 0800 975 2463, or contact us by email for free expert legal advice.

David Mayor

About David Mayor

David is Head of the Preston Office's Civil Litigation team and deals with all types of private Civil Court disputes. David’s blogs cover his expertise in all aspects of personal injury law from low value Road Traffic Accidents right through to complex large loss claims. David also writes and has a vast array of experience in Public Liability (trips and slips), Employer's Liability (accidents at work), and Motor Claims (motor vehicle accidents, pedestrian accidents).
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