Three quarters of personal injury law firms are planning to cut staff numbers in the near future unless the government retracts plans to reform civil litigation.
The Association of Personal Injury Lawyers (APIL) carried out a survey that found 118 of the 155 firms questioned were planning to cut their staff this year.
The survey forms part of the APIL’s full response to the government plans to cut fixed fees for low-value personal injury claims.
The new recoverable costs for road traffic accident claims valued under £10,000 would be reduced from £1200 to £500. Plus, there are also fixed fees for claims up to £25,000 and employer and public liability claims that would be by an electronic portal for the first time.
1 in 6 of the firms surveyed said they would stop personal injury work under £25,000 if proposals remain unchecked. More than half were undecided on what they will do.
In its response, the APIL argue that the government is letting independent advice be eroded to the detriment of innocent victims of personal injury. It also claimed the government has ignored or forgotten the irreducible minimum amount of work that is required in personal injury cases.
Law firms will be unable to run successful practices advising people for minor injury claims and instead claims management companies would move to running the claims themselves.
The response goes on to claim that the £700 cut in costs has no evidence from the government that it will be balanced by no longer paying referral fees.
PLUS, like Swain & Co, more than half of personal injury firms do not pay referral fees so will not see a saving from the ban, only losses.
At the moment, we are all unsure how quickly the government intends to respond to the consultation on fixed costs. The extension of the RTA portal has been put on hold indefinitely; however, the new low fees for low value work could come into force as soon as April.