The government has published provisional statistics on injuries on public roads in Great Britain...
Insurance companies have been celebrating major changes to the rules governing the payment of legal costs for the vast majority of personal injury claims which start on 1 April with further changes starting at the beginning of August.
From 1 April, the element of the claimant’s solicitor’s costs under ‘No Win No Fee’ agreements, known as ‘success fees’, will be payable by the client, not the defendant’s insurer. To make up for the fact that a proportion of cases are unsuccessful, success fees ensure that this type of agreement remains profitable and until now, the claimant kept all their compensation at the end of the claim. This change will save the insurance industry a considerable amount of money and has been brought in as a response by the government to the so called ‘compensation culture’ associated with the proliferation of whiplash claims following minor road accidents. Ironically, the major insurers were central to this mushrooming of small claims by referring accident victims to their ‘panel’ solicitors to pursue claims for injuries they had often not even complained of, charging the solicitors around £700 for each case they referred.
To add to the insurers’ delight, the government have now confirmed that in non road accident claims, so injuries suffered at work and in public places, where liability is admitted and where the value does not exceed £25,000, the compensating insurer will not have to contribute more than £1,600 towards the claimant’s costs. To put this into perspective, CWJ were recently instructed in a case where the claimant had, up to that point, been dealing directly with the insurers. They had offered £3,500 in full and final settlement. Eventually, close to trial and after a considerable amount of work, we achieved settlement at £35,000 for our client. The costs were considerably more than £1,600 but were all payable by the insurer.
In future, where the £1,600 budget has been exhausted, the client will be left to fight the insurer alone and conduct the whole case to trial through an electronic portal on the internet. The chances are that they simply won’t feel confident to take the case to trial such that it will be open season for insurers to under settle claims direct with unrepresented claimants who have no way of knowing that their claim is worth vastly more than they are being paid. Given that a £25,000 claim can involve quite serious injuries involving complex fractures and months of lost earnings, the fact that the government is allowing this to happen is utterly staggering.
For further information or advice relating to this or other personal injury/clinical negligence matters, contact David Greenhalgh on 01689 887806 or email him at david.greenhalgh@cwj.co.uk