PERSONAL INJURY - 14.04.2011

No win, no fee changes announced

What’s happening? We previously informed you that plans were afoot to shake up the “no win, no fee” system (yr.8, iss.11, pg.1, see The next step). Now, over a year later, they finally appear to be coming to fruition. The Justice Secretary, Ken Clarke, recently made the following statement in the Commons: “We plan to end the recoverability of success fees and insurance premiums, which drive legal costs, award claimants a 10% uplift in general damages where they have suffered loss, and then ensure that they take an interest in controlling the bills being run up on their behalf by expecting them to pay their own lawyer’s success fee.”

What impact will this have? Effectively, this move puts an end to the “no win, no fee” deals that have been available to claimants. This is because the new deal will be much less appealing for solicitors. Currently, they can’t lose: regardless of whether they get compensation for the claimant, they get paid. However, under this new proposal, not only will their potential earnings be significantly clipped if they win, but if they lose, they won’t make any money from either the courts or insurers. Note. In future, solicitors’ fees will have to come from the compensation paid, the proportion of which will be capped at 25%. At present, fees are added to the compensation.

Good news. The fact that it’s going to be much more expensive for claimants to bring a personal injury claim should see a dramatic reduction in the number of cases. In particular, this move should weed out unscrupulous claimants, which, in turn, should hopefully lead to cheaper employers’ liability insurance.

Tip. Although it’s going to be harder to bring a claim, this doesn’t mean that you should treat accidents less seriously. If a claim is brought, to limit your liability, you will still need to provide evidence that you had safe systems of work in place.

For a link to the previous article, visit http://healthandsafety.indicator.co.uk (HS 09.15.01).