2013 could go down in history as the year that changed the future of personal injury for both claimants and law firms.
This year, the top law firms are adapting and evolving to not only cope with new challenges but to face them head on. This desire to change will give modern-thinking law firms an advantage, giving them the best chance to continue to offer their clients the best service available.
No more ‘No Win No Fee’ claims
1st April 2013. That was the day that sent shockwaves throughout the compensation claims industry; new legislation was introduced and as a result traditional ‘No Win No Fee’ claims became a thing of the past and new claimants began facing an uncertain future.
The big changes in this new legislation mean that:
- ‘No Win No Fee’ CFAs (Conditional Fee Agreements) will remain available in civil cases, but additional costs – success fees and insurance premiums – are no longer payable by the losing side.
- ‘No Win No Fee’ DBAs (Damages Based Agreements) are available in civil litigation for the first time.
- Referral fees are banned in personal injury cases.
- Claimants’ damages are protected: the fee that a successful claimant has to pay the lawyer – the lawyer’s ‘success fee’ in CFAs, or ‘payment’ in DBAs – is capped at 25% of the damages recovered, excluding damages for future care and loss.
- Claimants who lose, but whose claims are conducted in accordance with the rules, are protected from having to pay the defendants costs in personal injury cases that cap the amount that claimants may have to pay to defendants.
This new legislation does not affect current claimants but will affect anyone making a claim after 1st April 2013. After this date, claimants will no longer receive 100% of any compensation they receive. This compensation will now need to be used in part to pay legal fees that would previously have been recovered from the losing side – these amounts can range from a few hundred to a few thousand pounds, depending on the circumstances of the case. These changes have been introduced to try and discourage people, injured through no fault of their own, from claiming compensation. A far cry from the noble ideology set out in 1995 when, then minister, Geoff Hoon introduced
‘No Win No Fee’ claims by saying:
“No-win no-fee conditional agreements will result in better access to justice. Access will be given to the many people who fall between those who are very rich or those who are so poor that they qualify for legal aid. In future, the question of whether one gets one’s case to court will no longer depend on whether one can afford it, but on whether one’s case is a strong one
Somehow, today’s government feels that it’s appropriate to try and deny the same people this access to justice by condemning them to suffer in silence rather than taking action. This current shift in legislation will unfairly make it harder for claimants to receive all the compensation they rightly deserve.
It’s widely perceived that the lobbying from insurance companies concerned with bogus claims and the government’s desire to avoid an American style ‘claim culture’ were to blame for this new legislation. Their response could be perceived as an overreaction as it has potentially forced thousands of people to suffer needlessly with less chance of compensation. But however unfair people may find the new system, one thing is certain; it’s here to stay. We just need to move forward together and keep fighting for our clients and fighting for justice.
No more referral fees
Aside from the changes to ‘No Win No Fee’ claims this legislation has also banned the payment of referral fees to third parties. A large proportion of law firms relied heavily upon referral fees and following this change, law firms will need to think about a positive way to move forward without losing money or reducing the quality of their service.
This change will cause great financial hardship to hundreds of law firms across the industry and potentially cause the loss of thousands of jobs. When you examine this new legislation more closely it becomes more and more apparent how tough and widespread the ramifications of these changes will be to the compensation claims industry.
Now, the average person in the street may be unsympathetic to this plight but if specialist personal injury law firms start to struggle financially these costs will unfortunately be passed on to claimants – people whom, let’s not forget, are innocent victims who have been injured through no fault of their own. Now that doesn’t seem fair does it?
The government and the media can sometimes paint a picture of claims companies as dodgy geezers who are just looking to make a quick buck regardless of the consequences. But this simply is not the case; we’re not a nation of ambulance chasers and it’s unfair for someone, who’s genuinely injured, to be denied help and compensation because the law firms who are there to help them are being vilified as such.
The future of compensation claims
The months and years to come could be an uncertain time for law firms, insurers and claimants alike, but don’t worry, the best injury specialist solicitors are defiant in the face of this challenge. Companies like The Compensation Group will continue to offer their clients a friendly, expert service to anyone who has been injured in the last 3 years, through no fault of their own and is in need of help.
The Compensation Group is here to help and refuse to allow any red tape or bureaucracy to stand in their way. With a wide range of solicitors and experts they’re impressively equipped to overcome any challenges they face in order to give you the best possible result with your claim.
If the recent legislation changes have made you unsure about making a claim just speak to one of the friendly advisors at www.thecompensationgroup.co.uk without obligation to find out how they can help you.