The Government yesterday announced that it intends to change the rules governing costs recovery in civil litigation claims, especially in cases involving No Win No Fee Agreements. (Source: BBC) The proposed changes will hit accident victims hard and will restrict access to justice for all but the very wealthy.
A No Win No Fee Agreement (properly called a Conditional Fee Agreement) is an agreement between a solicitor and his client under which the solicitor does not get paid unless his client wins his case. If he wins, a solicitor can charge a success fee (to reflect the risk that he may not get paid anything at all). In cases where liability has been disputed the client will often take out an After The Event Insurance (AEI) Policy which will pay his opponents legal costs if the claim fails.
If the client wins then the losing side (in reality their insurance company) pays all the client's legal costs, including the success fee and any AEI premium.
To any reasonable person that is a fair system. The person who is at fault pays compensation and costs. The innocent party pays nothing.
But it is now proposed that even when they win their case should have to pay the success fee and the AEI premium themselves out of their own compensation. Is that fair? Obviously not.
The government justifies the proposed changes by suggesting that it will stop "spurious” claims and help to reduce insurance premiums. This is nonsense and the government has simply put the interests of the insurance industry ahead of the interest of innocent victims.
This really is a disgrace! And it could really be bad news for the people I represent in personal injury claims who could end up receiving far less compensation because they have to fund success fees and AEI premiums themselves. Why should the insurance industry benefit from these changes at the expense of the innocent victims of accidents?
The details of the proposals are awaited but the only winners here are the insurance companies.
What this does underline is the need for those who are injured in accidents to ensure that they are represented by a specialist personal injury solicitor who can protect their interests.
Watch this space for further developments.
Chris Macwilliam is an experienced personal injury specialist and is the partner who heads the firm's personal injury department. He is a member of the Law Society Personal Injury Panel and holds Senior Litigator status with the Association of Personal Injury Lawyers (APIL).