31 July 2013 heralds major changes in personal injury law which affect both client and lawyer.
Swain & Co Solicitors LLP, despite these changes, remain committed to providing the highest level of service for all our existing and future personal injury claims clients.
For that reason we believe it is important to advise clients of these changes and the impact they will have.
Clients are, by now, well used to the fact that Road Traffic Accidents (RTA) are progressed through the “RTA portal”, a computer system designed to allow the solicitor to send claims directly to the insurance company of the person responsible for the accident provided the value of that claim is £10,000 or less.
From 31 July 2013, this system will be extended to include RTA injury claims with a max value of £25,000 as well as all other personal injury claims including accidents at work or accidents in a public place.
This will now be known as “The Claims Portal”.
The Ministry of Justice are responsible for the new system as well deciding that the legal costs of pursuing the cases, whilst still recoverable from the other side, will be fixed in law. This is known as “Fixed Costs” and means that the costs will always be the same, “fixed”, whether a small amount or large amount of work was required.
The concern is that this may lead to some firms cutting corners to ensure the least amount of work possible is done to maximise costs and perhaps will employ case handlers who are not appropriately qualified.
The “Fixed Costs” system will apply to all personal injury claims. The fees are significantly lower than the existing system of costs recovery.
The introduction of “Fixed Fees” followed the ban on “referral fees”, a fee traditionally paid by some solicitors to a third party for the introduction to a client. This fee was expensive.
The Ministry of Justice argue that because solicitors no longer have to pay referral fees, they can now “afford” a reduction in fees.
On top of all of this, clients and solicitors are dealing with changes brought about by “LASPO”, Legal Aid, Sentencing and Punishment of Offenders Act, in April 2013 which introduced changes to “No Win No Fee” Agreements (Conditional Fee Agreements – CFA)
The Success Fee, a percentage of basic costs charged by the claimant’s solicitor to reflect the risk of taking a case on but not succeeding, and the premium for any after the event insurance policy used to be paid by the other side when the case was won.
Since April 2013, these fees have become the responsibility of the Client even though the accident was not their fault.
Hence, it is not guaranteed that a client will receive 100% of their compensation as deductions for the Success Fee and Insurance Premium, where applicable, will usually apply.
One small crumb of comfort – from July 2013 the amount of compensation awarded should increase by 10% – BUT will this be swallowed up by the cost of the Success Fee and Insurance Premium?
Despite these changes, Swain & Co Solicitors LLP WILL ALWAYS fight for ALL of our clients. We WILL ALWAYS ensure the best settlement possible. We will NOT cut corners, we will NOT employ under qualified staff and we will NOT allow our clients to be under compensated.
We WILL embrace these changes and we WILL optimistically look to the future.