News

As of April 1st 2013 the way in which people can make a claim for personal injury is set to fundamentally change, and those who have a claim to make should make sure they understand the implications of the changes.

Put simply, the new guidelines make it a regulatory offence to pay or receive referral fees in personal injury cases. This ban applies to all companies which could be involved in the process of making a claim, including solicitors, and a breach of the ban leaves people open to regulatory action by the Solicitors Regulation Authority (SRA), Financial Services Authority (FSA), the Bar Council and the Claims Management Regulator.

Why is the ban being introduced?
When claims management companies pass on cases to solicitors they are currently awarded a fee, regardless of the success of a case. This has led to cases which have no merit or chance of success being passed on just so a fee can be made, allowing unscrupulous firms to make money.

There is a concern that the UK is following in the footsteps of the US with a “claims culture” under which people feel entitled to make money for even the most insignificant injuries, and where claims companies push forward with cases which they know have no real grounds. While this is often not the case, and those seriously injured have a genuine claim to make and a real need for a payout to maintain their quality of life, anyone making a claim could be affected by the legislation changes.

What about my claim?
If your claim is already ongoing then the ban will not apply to your case. If you have a compensation claim to make it is strongly recommended that you pursue it as soon as possible before April 3rd. The full impact of the ban is yet to be seen but it is likely that it will lead to a drastic reduction in the number of personal injury compensation claims made.

Making a claim before and after the changes - the difference

Example case - claiming before April
A man was injured at work and the accident was the fault of his employer. His injuries were valued at £6,000. After making a no win no fee claim he was awarded the full amount and his solicitor recovered legal costs and his insurance premium from the man’s workplace.

Example case - claiming after April
Under the new legislation the man would still be awarded the same compensation amount - £6,000. However, his solicitor would not be able to recover some legal costs and disbursements and would instead have to take them from the payout. A maximum of 25 per cent can be taken, so the compensation amount could fall to £4,500.

Contact Alkers Solicitors
For more details about the regulatory changes and more legal advice on making a claim call Alkers Solicitors today on 0800 00 55 44