Funding Personal Injury Claims in the new regime from 1 April 2013

From 1 April 2013, injured people will no longer have access to a ‘no win, no fee’ Funding arrangement under the ‘Jackson Reforms’. The Government and Ministry of Justice have decided that victims of accidents who have been injured as a result of someone else’s negligence should no longer be entitled to the fair and reasonable compensation that they deserve, thereby restricting their Access to Justice.
Prior to 1 April, Solicitors acting under a ‘no win, no fee’ Conditional Fee Agreement were entitled to charge a Success Fee on the basis that there is a risk that they will take on claims which will be unsuccessful and they will not get paid for the work that they have done. This Success Fee was previously recoverable from the Defendant in successful cases. From 1 April, if Solicitors wish to charge a Success Fee, this will now need to be taken from the Claimant’s/injured person’s damages in successful cases limited to 25%. As a consequence, where Solicitors elect to do this, the Claimant will receive reduced damages and not the full compensation that they deserve.
Prior to 1 April, Solicitors could also take out what is known as ‘After The Event Insurance’ on behalf of their clients’ to protect them against the risk of adverse costs being awarded against them should their claim be unsuccessful or they are ordered to pay the other side’s costs, or a proportion thereof, for any reason. This was also recoverable from the Defendant in successful cases as an Additional Liability. The Government and MOJ have decided that deserved Claimants’ should not be afforded protection by such policies. If they wish to take such policies out from 1 April 2013, they will need to pay for it out of their own pocket or their damages.
The Association of Personal Injury Lawyers and Claimant Solicitors’ have been campaigning relentlessly against these reforms on the basis that these changes will have the effect of significantly reducing compensation awarded to Claimants’ and severely limit their Access to Justice. In addition, the MOJ has sought to further restrict and limit the recoverability of Solicitors costs in such cases, introducing very low fixed costs in cases which can be very complex on issues of Liability and Quantum (damages). As a consequence of this, Solicitors will be limited in the types of cases that they can afford to take on, the effect of which, will be to deny the deserved Claimant proper, fair and impartial Legal Representation.