Legislation set to change the world of compensation claims

Peers in the House of Lords debated the Legal Aid, Sentencing and Punishment of Offenders Bill on December 20th last year, discussing a number of amendments which could change the legal landscape, particularly when it comes to personal injury claims.

The bill includes the scrapping of indeterminate sentences for dangerous offenders, a new offence of squatting, and most importantly for compensation claims, a number of restrictions on legal aid.

David Cameron’s government is hoping to shave GBP 290 million from the GBP 2 billion annual legal aid bill as part of its efforts to cut the ministry’s budget by 25 per cent over the course of the parliament.

However, the measures could have a significant impact on personal injury claims in the UK, with a number of experts highlighting a range of problems that could be created if they are implemented.

One expert claimed that the government is committed to reducing the perceived view of out of control compensation and health and safety legislation on the back of a recent Lord Justice Jackson report into the costs of civil litigation.

Ministers say legal aid will end for most family cases, clinical negligence and employment law but remain for criminal cases, and the bill will also make a number of changes to no-win no-fee cases.

Jon Rees, a personal injury expert, noted that more than ten years ago the then government removed legal aid for almost all personal injury claims, but legislated that success fees, which are claimed by solicitors working on conditional fee agreements in successful claims so as to cover the costs, have to be written off in unsuccessful cases.

This legislation was crucial as it meant people were able to access justice as they could meet the costs of pursuing the case if they won, but did not have to if the case went against them.

However, the new bill going before parliament will implement new rules that would see the claimant paying an opponent’s costs in the event that the case was unsuccessful.

Mr Rees added: “The package of measures being considered also seeks to introduce fixed fees for solicitors and also makes the success fee element of the solicitor’s bill irrecoverable from the losing opponents, as well. 

It is proposed that the success fee would be recovered from the claimant’s damages once again, which many legal experts believe could lead to solicitors losing out.

Many expect that changes to the market will force lawyers to resist taking any reduction from a client’s compensation award, which in turn could throw business models built around success fees paying for losing cases into chaos.

“It seems possible that lawyers will be more risk-averse than they are now so that only cases with very strong prospects of success would be taken on, as the costs of funding losing cases would not be covered by success fees available in successful cases and because a related proposal would see costs being fixed at a lower level,” the expert added.

The new legislation could potentially run against the previously stated aim of making the justice system more accessible to those who need it most, people who have been involved in a car accident or an accident at work.

Legal experts fear the changes being pushed through by the government could tilt the current balance away from the injured individual and towards the party to blame for the injury.

Justice secretary Kenneth Clarke has defended the new legislation, saying that the bill will “start to address some of the problems” left behind by the previous government, but the opposition argues that it will make it harder for ordinary people to seek justice.

Posted by Verity Taylor

Legislation set to change the world of compensation claims

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