Q: I have heard that the rules for claiming compensation are changing and that people will get less compensation for a personal injury. I have read so many different things about it, but am still unclear. Can you explain exactly what it means?
A: Currently people who have suffered an injury through no fault of their own, e.g. in a road traffic accident, are able to claim compensation in full under a No-Win No-Fee Agreement. Under the existing No-Win No-Fee Agreements, when a case wins the solicitors will be paid an extra percentage of their costs (success fee) by the losing insurance company. This means that usually the injured person receives 100% of the compensation awarded.
The legislation due to be brought in by the Government in April will mean that the success fee will be limited and will be paid from the compensation, so the days of 100% compensation recovery will be over. This may well mean that (a) there will be fewer solicitors prepared to take on personal injury claim cases and (b) claimants may find themselves losing up to 25% of their compensation award to help pay the legal costs of bringing the case. The Government has said this move is necessary as too many bogus claims were being made due to No-Win No-Fee Agreements making it too easy to pursue a claim. What it will do is give the insurance companies a windfall as they have already calculated and collected their premiums.
Anyone who feels that they have a case to bring should consult a solicitor as soon as possible and seek to enter a No-Win-No-Fee Agreement before the end of March in order to avoid the impact of these changes.