Should injury victims have to use their damages to pay for legal costs?

No win, no fee cases, also known as Conditional Fee Agreements (CFAs), have become increasingly popular in recent years for people looking to pursue personal injury claims.

As the name suggests, these cases mean the claimant will not have to pay their lawyer if they lose the case and, although they have been around since 1990, the agreements only became popular after changes were made following the 1999 Access to Justice Act.

 

The act removed all personal injury cases from the legal aid system, making CFA’s the prime route of compensation recovery, while also introducing a provision which meant the success fee lawyers charge for winning the case could be recovered from the losing party.

Up to 100 per cent of the base costs could be claimed as a success fee, which was hoped would encourage more lawyers to take on cases without such a great chance of them winning. These success fees are capped depending on the different types of case being taken on and at which stage it is settled.

“There is a general consensus that CFAs have increased access to justice for those who might otherwise not have been able to afford to bring a claim… Recoverable costs represent a source of funding for the winning party and thus promote access to justice,” a recent report into the issue claimed.

However, the same report – entitled Reform of Civil Litigation Funding and Costs in England and Wales – called for the system where the losing party would pay the success fee to be changed, creating one where the claimant must foot the bill.

There were said to be a number of reasons behind a need for change in the system.

“Under the current arrangements claimants generally have no interest in the costs being incurred on their behalf because, win or lose, as they do not have to pay anything towards them,” Justice Minister Jonathan Djanogly said.

It is for these reasons that the report called on the government to end the existing system of recovering costs from the losing party.

As personal injury litigation is the greatest area where CFAs are used, the changes could have a profound effect. One potential problem raised was that complex cases, could become too costly for lawyers to take on with the 25 per cent cap in place.

The Law Society also said the effect the changes to civil litigation costs could have “are not yet clear”.  However, it added they “appear to make it much more difficult for ordinary people to have recourse to the courts to right wrongs”.

Hayward Baker’s point of view:  Is it right that a person who is injured by the negligence of someone else – therefore having to claim for injuries and losses which are no fault of their own – should have to pay a contribution to the legal costs?  While the argument is that they are bringing the claim therefore they should pay, it is not as if they have chosen to be injured or to be in a position where they require legal services.  

Further, the only beneficiaries of these changes are the insurance companies and the negligent businesses themselves:  Why should businesses and the profits of their shareholders be bolstered by clawing back money from innocent victims they have caused injury? 

Finally, this fundamental shift in the favour of profits over people relies on the belief that it will in some way stem a mythical ‘compensation culture’ or stop preventing so-called spurious claims.  We would suggest that if this is the aim then why hit those that have been injured and need it most? 

 

Should injury victims have to use their damages to pay for legal costs?

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