Personal Injury Claims: A Brief Guide to the Changes Ahead
New laws which are to come into affect on 1st April 2013 will mean some big changes for personal injury claims and for the recovery of associated costs. With regular news reports and updates in the media, it can be quite mind-boggling to understand these changes and what effect they will have on current and future claims.
A new piece of legislation called the Legal Aid, Sentencing and Punishment of Offenders Act (LAPSO) will come into force in April. Under the new act, it is intended that a solicitor will be able to charge a client for a percentage based Success Fee.
A Success Fee is a percentage based risk fee (up to a maximum of 25%) that can be charged in addition to base costs incurred by a solicitor throughout the case. It used to be the position that this fee was recovered from the Defendant; however the Act is changing that.
In addition to the above, LAPSO will prevent a party from recovering the cost of an After-The-Event insurance premium from the other side (in most cases). This insurance policy protects a client against what could prove to be substantial costs in legal action, should their case be unsuccessful. The policy covers the opponent’s legal costs. Prior to the new legislation, a Claimant had been able to take out an insurance policy to cover them against the possibility of losing their claim and having to pay the Defendant’s costs – the cost of the premium payable by the Defendant. With the changes coming into affect, the Defendant will no longer have to pay for this.
The Act has also brought in a ban on referral fees by regulated persons in personal injury matters. Essentially this means that those Claims Management Companies who refer personal injury work to solicitors for a fee will be banned from doing so. This is to cut down on the number of “unlikely to succeed” claims that were passed on to solicitors with a fee being due. It is envisaged that this will eventually lead to a decline in the number of personal injury claims being made each year.
So, where does that leave you? The fact of the matter is, if you are injured as a result of an accident that was not your fault, you are still able to make enquires as to whether you have a claim. The new reforms are due to the political will in saving costs in personal injury claims. Whilst they will be somewhat challenging over the up and coming months, we do hope that these reforms do not restrict anyone in obtaining justice.
Watch this space…
5th April 2013