Stephen Brookes reviews the changes to the no win no fee system which came into operation on the 1st April 2013
The no-win no-fee case funding method for personal injury claims was radically altered on the 1st April 2013 following pressure on the Government by the insurance industry to reduce the cost of claims by transferring a proportion of the expense of such claims from the guilty party or his insurers to the injured person who now has to meet that expense from his compensation funds though certain parts are ring-fenced.
No-win no-fee funding, originally introduced in 1995, was made almost cost – free for the injured claimant after legal aid was all but abolished for injury cases in 1999 and it has been a phenomenal success, in spite of valiant efforts by the insurance lobby to scupper the system entirely. In those pre no win no fee days, in order to bring a claim, a claimant had to be injured at work and in a union, or to qualify for legal aid or to just be rich.
Under the new changes, the success fee and the premium for the insurance which underwrites these cases is changed from being a liability of the Defendant, and must now be paid by the claimant out of the compensation.
Insurers asked the Government to make these changes in order to reduce car insurance premiums, and have we all seen big car insurance premium reductions? Of course not! And nor shall we! The only think surprising about that is the foolishness of the Government.
In addition to the claimant having to pay the success fees and insurance premium, the Government has also introduced fixed recoverable costs for the work actually undertaken by a claimant’s solicitor so that will operate as a third deduction.
To offset this slightly, compensation will be going up by 10%. It needs to be nearer to a 25% rise!
This is no longer access to justice – but the Government does not care about that – that is why it is dismantling the Legal Aid system and threatening to turn the clock back on health and safety law to the Victorian Age by abolishing civil liability for breaches of health and safety legislation.