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Changes to Personal Injury claims law could see genuine victims lose out

The “radical” new law affecting the management of personal injury claims could see genuine victims lose access to justice, says a Merseyside lawyer.

The Legal Aid Sentencing and Punishments of Offenders Act became law in May, bringing radical changes to the way PI claims are managed. The Act will come into force in April 2013.

The Act has been widely criticised by the legal profession. David Wooding, a personal injury solicitor at Maxwell Hodge, is warning anyone considering making a claim to do so as matter of urgency to avoid falling into the traps of the new law.

He says: “Whilst the Act deals with a number of matters, including Legal Aid and the sentencing of offenders, issues surrounding the management of personal injury claims have been met with much criticism. The major concern is that the changes will prevent victims of injuries from having access to justice. Lord Bach has said that such legislation ‘puts Britain back at least 25 years’.”

One of the fundamental changes regards the success fee, an additional cost calculated on a percentage basis and dependant upon a number of factors, including the strength of the evidence in the case.  The new law states that such fees are to be paid by the client, rather than the losing party as things currently stand, to encourage cost saving. 

To reflect this, it has been proposed that general damages --awards made for pain and suffering -- be increased by 10%.  However, this has been met with much criticism, stating that it would be impossible to know if the proposed 10% is being added to damages in cases that settle outside the Courts.  Under the new law, statistics show that 40% of clients will now be worse off.

David adds: “Often, claims are only pursued by lawyers because of the possible recovery of the success fee upon conclusion of the claim. However, there is mounting concern amongst the legal profession that, as a result of the new law capping success fees, not only will this mean victims of harm will lose a significant proportion of their damages, but it may also amount to claims being uneconomical to pursue -- particularly lower value claims -- resulting in victims being unable to access justice.”

The new law also prohibits the recovery of after-the-event (ATE) insurance premiums, which cover clients against the cost of an unsuccessful action. This, too, may amount to victims of accidents not pursuing genuine claims, while unsuccessful clients could lose their homes, face bankruptcy or even fall into serious debt. 

Maxwell Hodge is one of the region’s leading law firms, operating from eight offices stretching from the head office on Castle Street, Liverpool, to Formby and the Wirral.