The UK is changing how personal injury claims are paid. In 1995, the Conditional No Win No Fee agreement was ruled to allow more access to justice and transfer the funding back to the claimant. The claimant was then required to pay 25% of their compensation to the claim solicitor. This way, winning cases would offset losing cases that did not pay.
No Win No Fee
The compensation for these cases was calculated based on the claimant’s actual costs and losses. Therefore, many claimants were left undercompensated and unable to pay for ongoing care and therapies. In 1999, the government ruled to transfer the burden of funding from the claimant to the defendant.
Win No Fee, Lose No Fee
When the burden of funding was transferred to the defendant, they were required to pay the legal cost, insurance, and a success fee. This allowed Huddersfield Injury Claims solicitors to take on almost any case with no liability to the claimant or the solicitor. This is great for the claimant and the legal representatives.
Insurers complained about the number of claims, even though the increase has only been in automobile accidents, which decreased 4% this year. The other complaint was that they shouldn’t pay the claimant’s insurance and success fees.
New in 2013
The Ministers think that full compensation is not quite right and want claimants to contribute something towards the costs of bringing a case to court. So after April 2013, claimants will again have to pay a success fee, insurance, and up to 25% of damages; they are no longer recoverable from the defendant.
Is it going to work to go back to the pre-1995 ways of doing things? Legal counsel has the internet and advertising for filing claims, and the public perceives 100% compensation, without risk, because of the No Win No Fee.
For a small case that a person believes will involve no litigation and can be won quickly, clients will not want the cost of going to court. If the lawyer requires cost contributions from the client, they more than likely will not have many new clients filing.
Another example on the other side of the situation is a complicated high value case, with the legal costs being very high and the risk of losing also high. With the No Win No Fee rules, the solicitor could spend five to six figures litigating the case. If they lose, the claimant walks away with no costs, but the solicitor has all these expenses and hours that he cannot collect any compensation to cover.
The government has also decided to change the small claims limit from £1000 to 5000, meaning that the claimant will not be able to recover any legal fees in cases up to £5000. They would have to pay the solicitor themselves.
Also the government has announced they are doing away with 3,000 health and safety regulations.