Many reforms relating to the funding of personal injury claims come into force in April 2013 and these will affect the amount of accident compensation that Claimants will be able to recover.
One of the most significant reforms will see the end of No Win No Fee representation as we know it. Claimants will face having to pay up to 25% of their accident compensation to their solicitor as part of their costs. Currently, solicitors can recover all costs from the negligent Defendant.
To balance this out, it has been agreed that the injury compensation payable to the Claimant will be increased by 10% from April 2013.
However, less than 1% of personal injury claims actually end up before a Judge at trial and, unless there is a trial, there is no way for a Claimant to actually enforce this 10% uplift. In practice, it is very likely that defendants will simply start the negotiations lower than they normally would and the uplift will simply get lost in negotiations. Furthermore, even if the Claimant's solicitor is confident that the 10% uplift is not being reflected in the Defendant's offer, how many Claimant's will want to go to Court in the hope of achieving an extra 10% accident compensation, especially when there is a risk that a Judge will award an even lower amount of compensation?
The amounts awarded for accident compensation for injuries have not been reviewed properly for many years despite a commissioned report in 1999 confirming that personal injury compensation was too low. That report recommended an upward review of injury compensation over 13 years ago. Therefore, this 'increase' is now a token gesture. By applying the retail price index to compensation awards made in the 1960′s, it has been calculated that today's awards are around 50% lower.
Nevertheless, personal injury Claimants will stand to lose up to 25% of their accident compensation as costs from April 2013 and will find it much harder to get legal representation because solicitors will not be able to recover all costs from the negligent Defendant and will struggle to take on the riskier and lower value cases. And just to rub salt into the wound, the Government is now proposing to increase the Small Claims limit so that Claimants will effectively be unable to get legal representation for a personal injury claim worth less than 瞿5,000. Currently, a claimant cannot recover any legal costs for injury claims worth less than 瞿1,000. However, an increase in this limit from 瞿1,000 to 瞿5,000 will see an estimated 90% of cases fall into the Small Claims limit, meaning that a claimant would have to pay all legal costs privately to their solicitor.
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