Advertorial feature

The changing face of UK injury claims

 

There is never a good time to suffer a life-changing injury. However, some occasions prove much more inconvenient than others. 2013 could be the year things get tough for accident victims.

In 1995, the government introduced Conditional (No Win No Fee) agreements in personal injury cases, to widen access to justice and transfer the burden of funding litigation from the state, back to the claimant. From that point on, the claimant was required to pay up to 25 per cent of their compensation to an accident claims solicitor. Accordingly, winning cases would pay for those that were lost, and law firms were able to take on all cases with reasonable prospects of success.

Personal injury awards, being compensatory, are calculated to meet the injured person's precise losses. Giving up 25 per cent therefore left injured people undercompensated, and in serious cases unable to afford the future care or therapy. Recognising this, in 1999 the Labour government legislated to transfer the burden of funding from the claimant to the defendant, so the insurers of the losing defendant would pay not only the base legal costs but also the claimant's costs insurance and the success fee. Good news for injured parties, as it meant that accident claims could be brought at no cost to the claimant: No Win No Fee became Win No Fee, Lose No Fee. Meaning a personal injury lawyer could take the case with the mildest of prospects, because they would get a success fee from winning cases to cover those lost. 

That is the current system, and it works well from a claimant perspective. Insurers complain at the number of claims under the current No Win No Fee system, but the increase has only been in road accident claims and those went down by 4 per cent this year. They also complain that they should not have to fund the opponent's insurance and success fee.

Ministers do not accept the principle of full compensation and want the injured claimant to contribute towards the cost of bringing a case. Claimants will effectively return to funding cases from April 2013 again, again being asked to pay for a success fee, insurance, and up to 25 per cent of damages, which will no longer be recoverable from the defendant.

But, can we now go back to the old system? The landscape has changed enormously since 1995, when there was no advertising of legal services and referral fees were prohibited. Now, there are financial inducements and advertising campaigns to bring claims and the public perception is that No Win No Fee now means 100 per cent compensation.

This depends on the type of case. Imagine that someone with a whiplash injury from a rear-shunt car crash has a personal injury claim that will win, and win quickly. They are not interested in litigating and certainly not in the cost associated with going down that particular route, a lawyer seeking a costs contribution from such a client will find they don't get many such clients.

The situation is very different in more complex and higher value claims, where the risk of losing is significant and the legal costs are high. In a brain injury case, the lawyer - acting on a No Win No Fee basis - may spend six figures bringing the case, but litigation is uncertain and he may end up losing on liability. In this scenario, the claimant would walk away but the lawyer would be left with a big hole in their books and a profound aversion to risk. So, either he charges a 25 per cent success fee to his client or stops doing the work. Put simply, a claimant with devastating permanent injuries is faced with either losing a quarter of his compensation or risks not finding a lawyer who can take on their case. 

With this in mind, the government will succeed in delivering some significant savings to the insurance industry in 2013, arguably at the expense of the seriously injured. The government has announced their intention to raise the small claims limit from £1,000 to £5,000. What this means is that an injured person will no longer be able to recover legal fees from the opponent in cases worth up to £5,000, so they will have to pay the lawyer themself, and risk ending up with little or nothing, or else run the case without legal representation.

So, our whiplash victim, who did not want to pay anything in legal fees, will end up having to pay all legal fees. In this climate, the best legal advice must be to avoid any accidental injury at all costs from April 2013, be that serious or minor. Oh, and do take extra care, because the government has just announced that it plans to scrap 3,000 health and safety regulations. 

Suggested Topics
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Life and Style
ebookNow available in paperback
Life and Style
ebooksA superb mix of recipes serving up the freshest of local produce in a delicious range of styles
News
Boxing promoter Kellie Maloney, formerly known as Frank Maloney, entered the 2014 Celebrity Big Brother house
people
Sport
Dwight Gayle (left) celebrates making it 1-1 with Crystal Palace captain Mile Jedinak
premier leagueReds falter to humbling defeat
Sport
Harry Kane
premier leagueLive minute-by-minute coverage
News
The letter, purported to be from the 1970s, offered a message of gender equality to parents

When it comes to promoting equality of the sexes, we tend to think that we’ve come a long way in the past 40 years.

News
video
Arts and Entertainment
Jerry Hall (Hand out press photograph provided by jackstanley@theambassadors.com)
theatre
News
peopleFormer civil rights activist who was jailed for smoking crack cocaine has died aged 78
Arts and Entertainment
tv
Arts and Entertainment
Damien Hirst
artCoalition's anti-culture policy and cuts in local authority spending to blame, says academic
News
i100
Arts and Entertainment
Kirk Cameron is begging his Facebook fans to give him positive reviews
film
Arts and Entertainment
Jason goes on a special mission for the queen
tvReview: Everyone loves a CGI Cyclops and the BBC's Saturday night charmer is getting epic
Sport
Jonny May scores for England
rugby unionEngland 28 Samoa 9: Wing scores twice to help England record their first win in six
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs General

    Reach Volunteering: Financial Trustee and Company Secretary

    Voluntary Only - Expenses Reimbursed: Reach Volunteering: A trustee (company d...

    Recruitment Genius: Senior Project Manager

    £45000 - £65000 per annum: Recruitment Genius: This is a fantastic opportunity...

    Recruitment Genius: Shopfitter

    Negotiable: Recruitment Genius: This is an opportunity to join a successful an...

    Recruitment Genius: Digital Sales Account Manager

    £25000 - £30000 per annum: Recruitment Genius: A Digital Sales Account Manager...

    Day In a Page

    Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

    Kenyans still waiting for justice over Mau Mau uprising

    Thousands join class action over Britain's role in the emergency
    Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

    The last Christians in Iraq

    After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
    Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

    Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

    Britain braced for Black Friday
    Bill Cosby's persona goes from America's dad to date-rape drugs

    From America's dad to date-rape drugs

    Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
    Clare Balding: 'Women's sport is kicking off at last'

    Clare Balding: 'Women's sport is kicking off at last'

    As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
    Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

    Oh come, all ye multi-faithful

    The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
    Dr Charles Heatley: The GP off to do battle in the war against Ebola

    The GP off to do battle in the war against Ebola

    Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
    Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

    Flogging vlogging

    First video bloggers conquered YouTube. Now they want us to buy their books
    Saturday Night Live vs The Daily Show: US channels wage comedy star wars

    Saturday Night Live vs The Daily Show

    US channels wage comedy star wars
    When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

    When is a wine made in Piedmont not a Piemonte wine?

    When EU rules make Italian vineyards invisible
    Look what's mushrooming now! Meat-free recipes and food scandals help one growing sector

    Look what's mushrooming now!

    Meat-free recipes and food scandals help one growing sector
    Neil Findlay is more a pink shrimp than a red firebrand

    More a pink shrimp than a red firebrand

    The vilification of the potential Scottish Labour leader Neil Findlay shows how one-note politics is today, says DJ Taylor
    Bill Granger recipes: Tenderstem broccoli omelette; Fried eggs with Mexican-style tomato and chilli sauce; Pan-fried cavolo nero with soft-boiled egg

    Oeuf quake

    Bill Granger's cracking egg recipes
    Terry Venables: Wayne Rooney is roaring again and the world knows that England are back

    Terry Venables column

    Wayne Rooney is roaring again and the world knows that England are back
    Michael Calvin: Abject leadership is allowing football’s age-old sores to fester

    Abject leadership is allowing football’s age-old sores to fester

    Those at the top are allowing the same issues to go unchallenged, says Michael Calvin