Impending Changes to Compensation Claims

In July 2012, the UK’s most senior judges passed down a ruling through the Court of Appeal which decreed that people who successfully pursue damages through civil action will receive 10 per cent more in compensation. This change comes into effect on April 1st 2013. After this date, victims of car crashes and accidents in work or public places will be able to receive greater damages amounts for their suffering.

Lord Chief Justice Lord Judge decided on this legal amendment along with Lord Justice Maurice Kay, vice president of the civil division of the Court of Appeal and Lord Neuberger, the Master of the Rolls. The reform, which has been made as part of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, will also apply to successful claimants in instances of defamation and other cases involving ‘suffering, inconvenience or distress’.

How Will This Affect the Law?

This new act will supersede the current Conditional Fee Agreement, which is a ‘no-win, no-fee’-type system whereby a claimant’s legal representative is able to recover a fee of up to 100 per cent of their standard service charge. Under the terms of the existing system, solicitors are able to claim this fee even after unsuccessful proceedings. This means that individuals can face significantly higher charges for representation than they had first anticipated.

However, the Legal Aid, Sentencing and Punishment of Offenders Act 2012 has changed this process to a fairer system which will see claimants pay an additional sum to their lawyer if they are successful. However, this fee will be capped to a maximum of 25 per cent of the total amount of compensation they are awarded.

Will This Send Shock Waves Through the Injury Compensation Claims Industry?

In truth, the Court of Appeal’s decision to boost damages settlements by 10 per cent has come as no great surprise to those in the industry. Indeed, many people involved in the personal injury sector have known that the system has been in need of reform for quite some time.

In fact, conscientious personal injury lawyers have been arguing for a while that compensation claims need to reflect claimants concerns about recovering ATE (after the event) insurance premiums or successful fees from wrongdoers. Many industry professionals believed that an increase in the level of general damages was the best way to achieve this – and eventually the Court of Appeal agreed.

However, whilst this news was not greeted with any great shock back in July of last year, it was greeted with praise.  Indeed, most solicitors working in this field would have been incredulous if the Court of Appeal had not recognised that compensation needed to be increased.

PHC Law Ltd

If you would like to find out more about this potentially significant change to the law, or discuss a potential compensation claim of your own, please feel free to call 0800 612 7 612 and speak to one of our expert injury compensation claim experts here at PHC Law Ltd.