Changes to personal injury legislation have resulted in victims in England and Wales being denied £1.3bn in 2014/15, according new research.
The analysis by Quittance Personal Injury suggests that victims lost out on an average on £1,500, while those with more serious injuries could have lost out on significantly greater sums.
These losses are due to the fact that defendants, or their insurance companies, no longer have to cover all of an injured person’s legal fees – a reform introduced as part of The Legal Aid, Sentencing and Punishing of Offenders Act 2012 (LASPO), which came into effect on 1 April 2013.
A number of commentators in the legal sector have that these changes undermine victims’ access to justice, including a report by the Bar Council, which noted that the reforms resulted in “a growing reluctance of solicitors and barristers to take on complex, low-value litigation, denying many access to legal advice and representation”.
A spokesperson for Quittance Personal Injury, Neil Wilson, said:
“Our research shows that people with valid personal injury claims are losing out on compensation that they deserve and, in some cases, desperately need. This compensation is awarded to cover the cost of medical treatment and ongoing care.
“People affected by serious injury may be facing months or even years of physical therapy, medical treatments and day-to-day care. Imagine you are told by a doctor that you need four months of physiotherapy to complete your recovery but you are only able to pay for three.”
LASPO prevents solicitors’ recovering success fees from defendants. Success fees are the fees the solicitor earns if they are successful and win the case for the defendant. This has been a mainstay of ’No Win No Fee’ which sees solicitors earn no success fee at all if they do not win the case.
Success fees were introduced to act and an incentive for solicitors and improve access to justice for more marginal cases after the government abolished legal aid for personal injury claimants in 2000.
However, under the new legislation, these success fees are now deducted from the compensation awarded to claimants, which typically results in victims having to pay 25% of their compensation to cover the cost of their own legal fees.
25% is the maximum success fee allowed by the Ministry of Justice, and the majority of solicitors charge the maximum amount.
Referring to LASPO in a recent 2015 court judgement, Judge Lumb commented:
“Whilst it is true to say that in the relevant Implementation [of LASPO]Lecture Sir Rupert Jackson anticipated that the deregulation of success fees would lead to a competitive market between solicitors to offer the lowest success fees to secure the work, it is equally true to observe that this has not transpired, at least not yet. This may be because the public have not been in a position to make an informed choice to shop around for the best deal.”
