The legal landscape in personal injury law is changing significantly from April 2013 with the introduction of the Legal Aid , Sentencing and Punishment of Offenders Act 2012. This legislation is designed to slash £350m from the £2.2bn legal aid budget and also radically reform the current ‘ no win – no fee ‘ system.
The Act implements the proposals of Lord Justice Jackson in respect of conditional fee agreements which are more commonly known as ‘no win –no fee’ agreements. Solicitors will no longer be entitled to recover the ’success fee’ element of their legal costs from the at fault insurer. As the ‘no win –no fee’ model does not allow a solicitor to recover any legal costs if a case is unsuccessful they are entitled to charge a ‘success fee’ on the cases they win ( which in the majority of cases is 12.5% of their costs ).
This ‘success fee’ helps to pay towards the cost of running cases which are lost and the solicitor has to waive all of their fees. However from April 2013 the burden is shifted from the insurer to the injured Claimant to make up this shortfall in legal costs.
Similarly , any insurance premium which is taken out by a solicitor to protect a Claimant from paying any legal costs in an unsuccessful case will have to be paid by the injured party rather than the Claimant. The impact of this new legislation will mean insurers saving millions to the detriment of injured Claimants.
The Government have announced that from April 2013 personal injury damages will increase by 10%. However , we at Jones Kinvig Lawyers feel that this will be insufficient to offset what Claimants will have to pay under these new reforms. We believe that those who have been genuinely injured need every penny to help them make a full recovery and assist with their quality of life.
An accident can have devastating effects on an individual and they shouldn’t have to worry about paying legal fees when they are not at fault. Insurers are happy to take people’s premiums therefore they should accept that they will have to pay what a genuine Claimant is entitled to if their insured is at fault. As insurers will be making massive savings from April 2013 we would expect their premiums to decrease significantly. Let’s wait and see !
Article written by Ged Jones on 30/10/2012