The law about claims & how the Government is changing it

The Government has decided that the law for injury and other claims should be changed. The changes are being introduced between 1st April and 1st August 2013, so if you are thinking of making a claim, contact us straight away because we may be able to stop them affecting you.

What are the main changes and how will they affect me?

Legal aid is ended for all medical negligence claims, except for babies injured within 8 weeks of birth who are severely disabled. Legal aid has also been ended in most other areas of law.

• If you win your claim, any insurance premium you have paid to guard against the risk of having to pay the other party’s legal costs, will not now be repaid by the losing party, nor will any success fee in a no win, no fee claim. This means that if you are injured, you will not now receive the full compensation you were awarded, because part of it will be needed to cover these items.
• For most injury claims worth up to £25000, the legal costs to be paid by the party which caused the injury will be fixed at a low level.  This is likely in practice to limit the amount of work which your lawyers can do to present your claim properly – although insurance companies defending such claims can afford to spend what they like. It may also mean that part of the compensation will be used to pay legal fees.
• For non-injury claims the limit for a ‘small claim’ goes up from £5000 to £10000, and could soon rise to £15000. This means that very limited costs have to be paid by the losing party, and it is intended to encourage people to deal with such claims (involving substantial sums of money, and often difficult legal arguments) without lawyers. Many see this as unfair.
• For injury claims, the Government is thinking of increasing the ‘small claim’ limit from £1000 to £5000 or even £15000. This is again to discourage people who have been injured from getting independent legal help, and instead to encourage them to throw themselves on the mercy of the insurance company of the person who injured them. The track record of insurance companies in paying out fair compensation is poor: they see their main job is to save money for their shareholders and to increase their profits. For example, we recently obtained £37500 for a victim of a road accident who had been offered £1600 by the insurance company in full settlement.
• One piece of good news: compensation for injuries will rise by 10%. This is however unlikely to offset the problems mentioned above.

Why are they happening?

The Government says it wants to reduce the cost of making claims, and the insurance companies say it will enable them to reduce insurance premiums. Based on experience of previous changes, we would be most surprised if this happens. The overall effect will be to tilt the scales of justice away from individuals in favour of insurance companies, big business and the Government. It may also make it more difficult to bring claims which are not clear-cut, but which are still of immense importance to peoples’ lives.

Of course it is entirely coincidental that reportedly insurance companies have  paid to the Conservative Party £4.9 million since David Cameron became leader, and the founder of Direct Line Insurance paid to (now Minister of Justice) Chris Grayling £71000 for his office expenses when he was in opposition (source: Guardian 16.9.2011). Direct Line has announced increased profits for its motor business for 2012, up from £245 million to £261 million.

What are Davis Gregory doing about these changes?

We have lobbied the Government about them, but unfortunately without success. So we are working around them to make sure that as always we get you the best compensation and give you the best service we can, and we will do our utmost to minimise their effects. It means however that for new claims affected by the changes, when we work for you under a no win, no fee agreement, we will have to take a percentage of the compensation if you win, in return for you paying nothing if you lose. This will vary depending on the strength of the claim and the type of case. We guarantee that you will receive most of your compensation if you win, and your percentage will be guaranteed at the beginning: no hidden charges.

If you have been injured, or are thinking of making another type of claim, please email us now