"No Win No Fee" and "receive 100% of your compensation" are statements that we hear hand-in-hand, thanks to years of advertising campaigns by Claims Management companies. However from 1 April 2013 change is a coming!
Under the current system Conditional Fee Agreements or "No Win No Fee" Agreements (as they are commonly known) work on the basis that if a claim is unsuccessful then the client will not have to pay any solicitor costs. If the claim is successful the client's costs will then (subject to limited circumstances) be paid by the Defendant. Thus the client will receive 100% of his compensation.
In addition to these basic solicitor costs, if the claim is successful, the Defendant will also have to pay a 'success fee'. This is a fee that represents the solicitor's risk of taking on a claim under a No Win No Fee agreement. For example, if there are two claims and both, on balance, have a 50/50 chance of succeeding then one case would succeed and one would fail. The notion of the success fee means that a solicitor can investigate and pursue both claims allowing both clients' access to justice. If success fees were not available such client's would be unlikely to obtain legal representation.
Unfortunately the Government no longer believes in the principle of a client receiving 100% of his compensation and wants the client to contribute towards the costs of brining a case. From the 1 April 2013 any client in a personal injury or clinical negligence action will now be expected to pay their own success fee which will be up 25% of any compensation awarded (in addition to now also paying his own insurance premium).
Unfortunately personal injury claims are calculated very carefully to meet the injured person's precise losses. Despite what the newspapers may have you believe, the system of claims in the United Kingdom is not anything like the compensation culture found in countries such as America. Losing 25% of your compensation will leave you severely undercompensated. In serious cases, this could put a client in the position where he is not able to afford necessary lifelong care or treatment.
To add to this radical post-April 2013 shake up, Legal Aid will no longer be available in medical negligence claims, except for in very limited circumstances where somebody has been injured during pregnancy, labour or the first eight weeks of life. So that means clients who don't have legal insurance will either have to pay privately for their legal representation or lose a large percentage of their compensation.
Unfortunately the risk of losing in clinical negligence and high value personal injury claims is high and the legal costs are significant. It is not uncommon for a law firm to run a claim for over 5 years, for the claim to subsequently fail at trial. In this scenario, the new regime will allow a client to walk away from the claim without having to pay any money. Unfortunately, the solicitor involved will receive nothing and will likely have spent his firm's funds litigating the claim. Therefore, the only way law firms will be able to continue funding such claims will be to take a cut out of their client's compensation or to simply stop undertaking such work altogether. Neither being a particularly attractive solution to the new funding problem.
Where does that leave us then? Put simply a child involved in a car accident, which causes severe brain injury, from April 2013, will either face losing a large percentage of his compensation perhaps meaning he will not be able to afford his future care or treatment, or alternatively, he will not be able to access justice through a solicitor at all!
Our advice? After April 2013 avoid any accidental personal or medical injury at all costs. Unfortunately, the current government also intends to cut costs by cutting over 3000 health and safety regulations in addition to the well-advertised cuts to the NHS, so this may not be as easy as it sounds. It's not a pretty picture.
If you have suffered clinical negligence or any type of personal injury we would strongly suggest that you seek legal advice as soon as possible and certainly before 1 April 2013, to discuss whether you may have a claim.
Please contact us on 0114 2666660 and ask to speak to one of our specialist advisors, or alternatively contact John Vallance on [email protected] or call 0114 266 6660
