Personal Injury Solicitors Fees and the future
17 August 2009
There are potential changes being looked into by various people/government departments, which are examining the whole question of solicitors costs and, more particularly, solicitors costs in personal injury claims. The effect of the changes could lead to solicitors no longer being able to guarantee that their clients will receive 100% of their compensation.
To understand how we have been able to give this pledge to our clients in the first place, it is necessary to look at the existing system. At present, as long as clients receive compensation of more than £1,000.00 for their injuries, then the cost and expenses of engaging a solicitor are not actually borne by them but paid by their opponents (or more accurately their opponents’ insurer). It is the insurers then who pay compensation and the claimant’s solicitors’ costs. Because the bill generated for working for a client is not actually given to the client for payment but, instead, is given to the client’s opponent, then we can guarantee there is nothing to take from the client’s compensation. At the moment, the law allows solicitors to recover a fixed amount for road traffic accidents, where compensation is less than £10,000.00, or a “reasonable” amount in all other claims. At the moment, the fixed costs in road traffic accident claims are by no means generous but they are sufficient (just) to ensure clients’ compensation is kept intact. It is right to say that these fixed costs have not been reviewed since their introduction in 2003 in any event.
There is now great pressure being brought to bear on the government to look at the whole question of recoverability of solicitors’ costs, and the amounts that solicitors actually recover. The Ministry of Justice is currently looking at a new fixed costs system for road traffic accidents which, it is understood, will not offer solicitors any increase in costs (despite there being no review since 2003) and it is anticipated that those fees will be driven down on the back of some notional “streamlined” claims system. The new scheme was supposed to be introduced in October 2009 but has proved so potentially controversial that the likely implementation date is April 2010. Furthermore, Lord Justice Jackson has produced a preliminary report on the question of costs which, again, focuses on reducing solicitors’ costs and/or the principles of the recovery of those costs. At the moment, Lord Jackson’s paper is at a consultative stage but, if some of his reforms are adopted, then this may well lead to a significant reduction in the amount that solicitors can charge to their clients’ opponents and may even lead to some, if not all, of those costs being unable to be recovered at all. The inevitable consequence of this will be for solicitors to have to look to their clients, in successful cases, meeting some and possibly all of their solicitor’s costs. This will have to come out of the client’s compensation, which will clearly mean that the 100% guarantee will become a thing of the past.
You may wonder why it is the innocent victims of accidents who should have to bear the cost of bringing a claim, rather than the wrong-doer or, more particularly, their large, wealthy insurance company!!!??
