Why are changes coming to personal injury compensation claims?
The insurance industry lobby has won its argument that too many people are claiming compensation or personal injury and that the legal costs they pay are too high. If you do not change the rules insurance for drivers and employers will become even more expensive.
I do not agree with the arguments of the insurance industry but congratulations to them for persuading the politicians. Despite the country facing a major financial crisis the politicians are dedicating huge amounts of time to personal injury compensation claims.
The changes likely are:
- Legal aid will be more limited than it is today.
- If your lawyer is working under a conditional fee agreement, or no win no fee as it is called, the success fee will no longer be recovered from the other side. If solicitors and barristers want their success fee then the client will be paying it.
- If you buy after the event litigation insurance you will pay the premium win, lose or draw. To day you can recover it with your solicitor’s fees, expenses, and success fee.
- The reasons for these changes are the insurance industry complains it is costing them too much money, and the politicians believe someone claiming compensation should be at some financial risk.
- The risk of a claimant paying the other side’s costs if a case fails is to be limited. There may be no liability to pay those costs at all, or a financial limit may be set, and this may depend on how much money you have.
As a claimant personal injury solicitor it has always been great to explain to a client they can be protected from the risk of paying the other sides costs. It is also good that a client does not pay me, as when the case succeeds my fees are effectively paid by the insurance company of the other side. This leaves an easy relationship with the client as he is not waiting for my bill. The changes proposed mean this may change.
I cannot be precise about the changes as they are making their way through Parliament and the various groups set up to help. The indication given is that the changes will all be in place by October 2012. When such changes take place they usually only apply to cases which start after the change, so the current system will be with us for some time yet until the cases started before the changes run their course.
The purpose of these changes is not access to justice, a much mis-used phrase, it is to cut the cost of personal injury cases to the insurance companies. Insurance companies are very important to our social system as without insurance, and that means affordable insurance, those unfortunate enough to be the innocent victims of accidents would have to rely on the State. The State wants to rely on insurance which we all pay for, so when the insurance industry makes enough noise the politicians running a cash strapped country ask how high they should jump.
You will be able to bring a personal injury compensation case after these changes, but you will need to know:
1. That you have a good experienced personal injury solicitor on your side.
2. If you are to pay a success fee to your solicitor and if so how much.
3. If you need insurance to cover any risk of paying the other side’s costs and if so how much.
My own preference is always to represent a client in a way which means the fees are mine and all compensation goes to the client. Not all solicitors will follow this line so claimants will have to take care who they instruct to pursue their personal injury compensation case.