‘No Win, No Fee’ rules are changing

13th December 2012

Personal injury claimants must contribute to costs, says Furley Page

With deteriorating weather and darker evenings, winter is a dangerous time for drivers, with more accidents likely to occur than at any other time of the year.

Until now, those unfortunate enough to be injured in a crash have not had to pay legal costs if they have entered a ‘No win, No fee’ agreement with a lawyer, even if their claim for compensation has been unsuccessful.

But imminent changes to the law concerning the way personal injury litigation is funded mean claimants will soon have to contribute to the cost of making a claim, whether they win or lose, warns leading south east law firm Furley Page.

“Anyone who suffers an injury through no fault of their own only has until the end of March 2013 to bring a compensation claim under a ‘No win, No fee’ agreement if they want to avoid contributing towards the cost of bringing that claim,” says Chartered Legal Executive Ross Rowland.

“So it’s vital that anyone thinking about making a claim seeks legal advice before these changes come into force,” urges Ross, who has many years’ experience advising clients on personal injury claims.

Under current ‘No win, No fee’ rules, if a claim is successful then the claimant’s legal costs can be recovered from the losing party; and if it’s unsuccessful, the claimant’s solicitor does not get paid.

To compensate the lawyer for not being paid in unsuccessful cases, they can claim a ‘success fee’ from the other party in successful claims.

“The theory is that if the lawyer gets things right then, across a number of cases, these success fees cover the cost of the claims that they lose and aren’t paid on,” explains Ross. “However, for ‘No win, No fee’ agreements entered into from April 2013, it will no longer be permitted to recover success fees from the other party – but law firms will still have the same overheads and carry the same risks.

“The Government believes it’s time for claimants to start contributing towards the cost of bringing a claim, so it’s likely they will have to make up this shortfall by giving up a percentage of their damages.”

To reflect the fact that the claimant is going to have to pay some of their legal costs, a 10% increase in damages awarded for the injury sustained is also going to be implemented, though it’s unclear how that increase will be enforced.

Even if it does happen, the chances are that in many cases it won’t be enough to make up for the amount the claimant has to contribute towards costs.

Says Ross: “Some people might think it unfair that claimants who have been negligently injured by another, and whose damages have been appropriately calculated to compensate them for their injuries, should have to give up some of their award to pay towards their own legal fees. Others may agree with the Government that it’s about time claimants started taking some financial responsibility for their claim.

“But whatever your opinion, the one thing that’s certain is that anyone entering a ‘No win, No fee’ agreement from April 2013 can no longer be sure they’ll recover 100% of their compensation.”

Ross Rowland is a Fellow of the Chartered Institute of Legal Executives and a member of the Association of Personal Injury Lawyers. For further advice on personal injury claims, call Ross on 01227 763939.

Notes to editors

Furley Page Personal Injury Team

Ross Rowland joined the personal injury team at Furley Page in 2002, and was admitted as a Chartered Legal Executive earlier this year. The personal injury team is recommended by Chambers and Partners and The Legal 500 and is renowned in the South East for successful accident and injury compensation claims. The team includes members of the Association of Personal Injury Lawyers and two Law Society Personal Injury Panel members.

Chartered Institute of Legal Executives (CILEx)

CILEx was formed in 1892, becoming the Institute of Legal Executives (ILEX) in 1963, and then the Chartered Institute of Legal Executives (CILEx) in January 2012. CILEx has around 20,000 members who are either trainee or qualified Chartered Legal Executive Lawyers (7,500 are Fellows and so fully qualified lawyers). Around 92,500 people have chosen CILEx as their route to become a lawyer since 1989.

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