Personal Injury Claims will Increase in Value

by Guest injury law blogger on October 2, 2012

Anyone who claims compensation for a personal injury and they receive a judgement in their favour from April next year will receive 10% more than in previous years. The Association of British Insurers (ABI), who hope to re-balance the figures by a reduction in legal costs, is appealing the decision. The Master of the Rolls, Lord Chief Justice and the Vice President of the Court of Appeal are the three high-ranking judges who ruled that there should be an increase. It will be interesting to see how the changes to payouts affect both the claimant and the insurance industry. The increase will also apply to claims lodged before the April 1st date, so there are many in the industry who would have expected a quiet spell before the storm not to be over-stretched by a sudden rush of claims from April onwards.

A Balanced System is a Fairer System for Most

In many cases that have gone before the courts, the side awarded damages have been represented on a no-win no-fee basis and it is common for the victorious solicitor claim extra fees. These fees are not representative of their usual rates for counsel, but they are something like a win bonus known as ‘success fees’. While this is completely acceptable, it has meant that many people who have little way of denying responsibility, have been afraid to defend a claim because of the fear of escalating costs. In effect, there may have been cases successfully defended had the person accused of responsibility decided to contest the claim. Success fees are being abolished, making them no longer recoverable from conditional fee agreements under the new LASPO (Legal Aid, Sentencing and Punishment of Offenders) Act.

Whom will it affect?

In the most part, there will be no change at all for people who wish to claim personal injury. Solicitors fees will operate in much the same way, except there will be no bonuses to pay for contesting a case and losing. However, this does suggest that more cases will be contested and the courts may become a little busier. The only shift in costs will be payments from successful legal representatives finding their way to successful claimants. There are two ways of looking at this: there will be more people making claims because there are less costs involved (some success fees are double the counsel’s usual rates), but there will be similar earnings for solicitors who have to do a little more work to get the result. The big question is can you fill an appointment book more than once? In other words, solicitors will lose out if they are already operating at full capacity.

Civil Litigation Overhaul

The purpose of these changes in the cost structure of civil litigation has largely been to bring the earnings and losses of all parties in to a fairer and more proportionate level. The measures are also intended to reduce the number of hours wasted on claims that could be better dealt with before they reach court. In previous years, the solicitor acting on behalf of the pursuant of a claim, may have been acting as much for their own benefit as for the benefit of their client. The client may have no significant extra benefit from the case being heard than had they accepted an earlier offer of compensation. In essence, there process could be seen as less of a boom time for many personal injury solicitors and more profitable for happy clients who avoid the drawn out processes, to which we are accustomed.

Ethical Code of Conduct

In the United Kingdom, we are lucky enough to have one of the fairest and most respected legal systems in the world. This means that any prior cases where Counsel has recommended actions better suited to their own ends than their clients are few and far between. In many cases, there are many more motivating factors to take a responsible person or business to court seeking damages. To put a positive spin on the situation, it is thanks to people like Lord Justice Jackson who reviewed personal injury litigation that there have been so many positive advances since December 2009.  The approval of the defamation protocol, which is a pre-action protocol works as an alternative to court. This encourages more settlements at an earlier stage and that allows the courts more freedom to review cases that are more complicated.

Any injury solicitor will tell you that their clients are happier to receive compensation as early as possible, save for a minority where justice and the correct course of action are more important.

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