Success Fee Reforms

By on May 31, 2013

The Legal Aid, Sentencing and Punishing of Offenders Act 2012 (LASPO) came into force on the 1st April 2013 and drastically reformed civil litigation and particularly personal injury litigation. As a result of LASPO, success fees, which are the fees which solicitors are paid if their case is successful, will no longer be paid by losing defendant parties. Instead, they will now be paid out of the compensation which winning claimant parties are awarded. Furthermore, after the event (ATE) insurance premiums will also now be paid out of claimant’s compensation.

LASPO is aimed at reducing the number of personal injury claims and also fraudulent claims which are made each year and reducing the cost of insurance premiums. The government also wishes to make the whole litigation process fairer for defendant parties and ultimately reduce the ‘compensation culture’ which it believes to exist in the UK. However, while the reforms certainly make the litigation process fairer for defendants, as they no longer have to pay success fees or ATE insurance premiums, it is definitely arguable that the reforms have made the process unduly unfair for claimants. After all, the claimants in cases are the parties who may have been badly injured because of the negligent acts of defendants.

To compensate for the fact that claimants now have to pay out success fees and ATE insurance premiums, LASPO has increased all general damages to be awarded by 10%. In addition, as success fees are now paid out of claimant’s damages, the amount that solicitors can charge in success fees has been capped at 25% and it is up to individual law firms whether they wish to charge the full amount. Law firm Irwin Mitchell, for example, are going to charge their clients the full 25% in successful cases. However, personal injury specialists, Bolt Burdon Kemp, will only charge 15% of their client’s compensation.

If you have suffered injury through no fault of your own and you have been thinking about claiming compensation, then you shouldn’t let the LASPO reforms discourage you. The 10% increase in general damages has been put in place to ensure that claimants are not in a worse position than they would have been before the reforms.

Law firm Bolt Burdon Kemp are personal injury specialists with over 25 years of experience claiming compensation for a variety of cases including accidents at work, motorbike accidents and accidents overseas. They understand their client’s needs and progress claims sensitively whilst paying regard to rehabilitation and time off work costs.

 

 

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