A life-changing accident is the last thing anyone wants, but with the new changes to personal injury law, things are about to get a lot tougher for victims.
After a time of state-funded personal injury litigation, the government introduced conditional agreements (no-win, no-fee) in 1995 to shift the buck from the state, back to the claimant. But with a large chunk of a claimant’s damages going on lawyer’s fees, when the case was a success, victims were left undercompensated, and in some instances, unable to afford future care.
In 1999, Labour solved this issue by transferring the bill from the claimant to the defendant. Injured parties popped open the champagne and celebrated – finally, victims were receiving all the damages they deserved. From a claimant’s perspective, this system is ideal.
Even though insurers complain about a rise in cases and MPs weep over the ‘claims culture,’ personal injury claims have only increased in the road accident department by a whopping… 4%. Insurance companies hate having to cover an opponent’s costs and don’t feel that they should have to, whereas many ministers don’t believe in full compensation for victims of life-changing accidents.
As of April 2013, injured parties will have to contribute towards bringing a personal injury case to court. This means forking out for the success fee, insurance, and as much as 25% of damages.
A Blow to the ‘No-Win, No-Fee’ Industry
But can we smoothly slip the bill back to the claimant? The current ‘no-win, no-fee’ sector runs off its 100% compensation promise. Adverts everywhere hope to reel in personal injury victims because the conditional agreement industry is a profitable business. Will people continue to pursue claims if most of their compensation is absorbed by legal charges?
Huge Compensation Losses
‘No-win, no-fee’ law firms are unlikely to charge anything below the 25% mark, especially with high risk cases, such as brain injury or spinal damage. When the legal costs can reach heights of six figure sums, losing is not an option. However, it does happen. Although the claimant can walk away, the ‘no-win, no-fee’ solicitors always leave those cases with a massive hole in their profit margins. Consequently, the firm has to charge high prices to recoup losses.
Although ‘no-win, no-fee’ companies will need to compete for the smallest chunk of the client’s compensation, in reality, this may be impossible for most businesses due to the risks involved.
When all is said and done, it’s the most vulnerable victims (who are in the greatest need of compensation) that get a huge chunk of their damages taken from them to pay for extortionate legal costs. With these changes, we’ll not have a claims culture, but a culture of undercompensation.
When many people are dissuaded from following through with personal injury claims, companies are given more power to be negligent in the workplace without any repercussions. While individuals suffer, businesses will be free to exploit employees, if they cause injury.
Produced for Jigsaw Law solicitors who are personal injury specialists who focus mainly on accidents at work, road accident claim and specific injuries such as leg injury claims.
Or write to them at: Jigsaw Law Ltd, Pioneer House, Pioneer Business Park, North Road, Ellesmere Port, Cheshire CH65 1AD or follow them at or follow them at @jigsaw_law