Legal Aid, Sentencing and Punishment of Offenders or LASPO to give it its slightly more catchy title is set for a radical overhaul
On 1 April 2013, the main provisions of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 will come into force. New Civil Procedure Rules will also come into force on that day, implementing changes much referred to by the media, known as the “Jackson Reforms”. These will fundamentally alter the way most personal injury cases are run. From that date, payment of referrals fees for injury claims will be banned.
Any claim arising from a road traffic accident where the damages for the injury are valued under £10,000, are dealt with through the RTA portal system. This will be extended for claims valued up to £25,000, and also accidents at work and public liability accidents, such as slip and trip. Those changes were originally to be introduced on 1st April 2013 but have been put back, possibly to July 2013 or later.
Civil Procedure Rules, Conditional Fee Agreements and Damage Based Agreements
Since 1990 most injury claims have been run under Conditional Fee Agreements, also known as no-win no-fee agreements. Under a CFA, solicitors could claim a success fee. After 1st April 2013, these are no longer recoverable from the defendant and will be the responsibility of the claimant. Claimants may therefore have legal costs deducted from the damages they are awarded for their injuries and other financial losses.
Claimants will also have to pay for any insurance policy taken out to cover costs. These are essential where county court proceedings are issued. There may be cases where an insurance premium is too high for a claimant and may prevent them from taking a claim further. Fortunately, there is one small light at the end of the tunnel for claimants. They no longer have to pay the defendant’s costs if the claim fails.
Damage Based Agreements are a type of no win no fee agreement. If the claim is lost, no damages are recovered, and the solicitor recovers no costs. If the claimant wins, the solicitor is entitled to a percentage of damages recovered. In personal injury claims that would be restricted to 25%. Agreement must be reached between solicitor and claimant at the start of the claim and terms set out in writing. Under a DBA, the claimant can still recover their base costs from the defendant if they are successful. Any costs that are recovered in that way are then set off against any fee due under the DBA, meaning the claimant may still recover the whole of their damages.
With this number of alterations in the law imminent we certainly do live in interesting times. Most claimant lawyers fear that these alterations will be detrimental to the claimant and restrict their ability to pursue claims, particularly due to the new costs responsibilities imposed upon them.
It may be some time before the full consequences are seen.
Author: Lynne Muscroft – Partner at Slater Heelis LLP
Published on 14th March 2013
(Last updated 13th June 2014)