Research published yesterday suggests that personal injury solicitors will be less likely to offer No Win No Fee Agreements to accident victims as a direct result of the civil justice funding reforms announced by the government last week.  The Law Society Gazette reported on 4th April that a survey of 100 claimant personal injury lawyers by law firm referral service Contact Law revealed that 94% thought that the reforms would have a significant impact on their business.

The government intends to reduce the profitability of no win no fee cases.  It is proposed that success fees (which compensate solicitors for the risk of taking on no win no fee cases) will be capped at 25% of compensation and will be taken from an accident victim’s damages rather than from the losing defendant as at present.  Likewise claimants will no longer be able to recover after the event insurance premiums from losing defendants and will have to pay for it themselves.

To give an example: at the moment if an injured person is awarded £10,000.00 then that is the amount that they receive.  Under the government’s proposals compensation will be increased by 10% so the claimant would actually be awarded £11,000.00 – but the sting in the tale is that 25% of this will go to his solicitor leaving £8,250.00 and even less once the insurance premium is deducted (the amount of that is variable depending on the type of accident).

According to the Contact Law survey 69% of personal injury solicitors said that they would continue to offer normal no win no fee agreements on very strong or very large claims, but they would ask for a financial contribution from clients on more marginal (ie difficult to prove) claims. 88% of those polled said that they thought the government’s reforms would inhibit access to justice for genuine claims.

Dan Watkins, director of Contact Law’s find a solicitor service said “Not only will these recommended changes reduce consumer access to justice but it could mean that an employer with shoddy working practices may go unpunished risking further accidents in future”.

Janet Watson, senior legal executive with Ridley & Hall solicitors said:

“Ken Clarke, the Secretary of State for Justice says that he is trying to stamp out the compensation culture and criticises so called “fat cat” lawyers.  But the government’s proposals will mean that innocent victims of accidents may find it harder to get a solicitor to act for them and then will receive less than they do at the moment.  It’s important that the general public know that these proposals will help insurers make bigger profits at their expense and I would urge the public to contact their MP”.

For further information please contact Janet Watson on 01484 53842.  Janet is a Senior Legal Executive specialising in personal injury law handling a variety of cases from road traffic accidents to complex accidents at work. Janet is a member of APIL and is committed to achieving maximum damages for her clients. She believes that it is important that each client receives a personal friendly service.
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For more information on the reforms please see the Law Society website – Civil Litigation Reforms: Law Society response.