Personal injury claims shake-up

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The government has implemented an overhaul of the way in which personal injury cases are funded and the way in which claims are run.

An automated computerised “portal” claims system has been operating with varied success for claims valued up to £10,000.00 for a few years, where the fee a claimant’s lawyer can recover from the defendants towards their client’s legal costs is fixed.  The amount of the fixed fee has now been drastically reduced leaving a potential shortfall the client will have to pay from his or her damages.  In addition, in successful cases which have been run on a “no win no fee” basis the claimant can no longer recover the costs of insuring his or her claim nor the success fee from the defendants.

These significant changes are included with a further raft of reforms in The Legal Aid, Sentencing and Punishment of Offenders Act 2012, which came into law on 1 April 2013. Personal injury, the majority of medical negligence cases and large areas of family disputes have been removed from the scope of public funding.

Commenting on the changes David Bott, a former President of the Association of Personal Injury Lawyers, said “Cutting legal aid for medical injuries at the same time as restricting ‘no win, no fee’ is a savage blow for patients whose lives may have been shattered by their injuries. The drive to cut costs by forcing injured people to give up part of their compensation to pay legal fees is unfair, unjust and unwarranted. People don’t choose to be injured, but when negligence happens, the guilty party – the losing defendant – must surely be held fully to account”.

For personal injury clients the key changes are:

1.    The value of road traffic accident claims dealt with through the portal system has increased from £10,000.00 to £25,000.00.  This will therefore cover the majority of significant personal injury cases which may be inherently unsuitable for the portal system.

2.    The fixed fee for lawyer’s work currently at £1,200.00 would be reduced to £500.00, leaving little scope for real or effective investigation and for the safeguarding of a claimant’s interests. 

3.    The portal scheme has been extended to cover most types of accident, not just road traffic accidents.  This includes public liability claims e.g. people injured on defective or dangerous pavements as well as employer’s liability claims such as employees injured at work through unsafe or defective equipment.

For claimants, this effectively creates a two-tier system. Only those whose claim is worth in excess of £25,000.00 will be able to secure experienced specialist legal representation. For the rest, including many vulnerable people who have sustained a significant injury which may prevent them from working but whose case falls within the portal and fixed fee scheme, they may not be able to afford a lawyer and will thus be left to deal with the matter themselves.

For solicitors, the challenge is to find ways of funding worthwhile claims, but the uncomfortable truth is that it is likely to be wholly uneconomic for many smaller firms to continue to run personal injury claims. However, we can confirm that Wiseman Lee will continue to provide a full personal injury claims service to our clients.

If you have been the victim of an accident or received negligent treatment from a medical professional please contact us today.

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