20 April 2015
The Effects of Civil Justice Reforms on Personal Injury Claims
Since the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO) became law in April 2013 access to justice has been reduced. Has its aim of making civil litigation cheaper and fairer gone too far and made things more difficult for people making a personal injury claim?
LASPO implemented reforms proposed in 2010 by Lord Justice Jackson in his report on civil litigation costs, entitled ‘The Jackson Review’. The reforms proposed aimed to ensure that civil litigation costs are reduced, more proportionate between both parties and, as Lord Neuberger put it, “civil justice will be more efficient and fairer.”
This all sounds very commendable but since LASPO came into force there have been changes to the legal aid system which affect people wishing to pursue a claim in the civil courts.
In his report Lord Jackson stated, “The legal aid system plays a crucial role in promoting access to justice at proportionate costs in key areas”. Since April 2013 when LASPO became law there has been a reduction in the categories for which civil legal aid is available and a narrowing of the means-test criteria. This means that fewer people qualify for legal aid.
So what does this mean for people wanting to make a personal injury claim? There could be a reduced access to justice for people that have a claim with real merit but the prospects of success are a little more difficult or uncertain. Some personal injury lawyers might be more averse to risk in cases where there is a valid claim but it’s more risky or complicated, e.g. where there is disputed liability or a complex point of law.
Costs recoverable between parties have also been significantly reduced with the introduction of fixed costs for personal injury fast track cases. Although the impact of this change is not yet wholly understood the effect could be that some fast-track cases could become less viable unless larger caseloads are conducted.
In addition to the fixed-costs regime for fast track cases there have been changes to litigation funding as success fees and after-the-event insurance premiums now have to be paid out of the successful claimant’s damages. Lord Justice Jackson thought that people bringing personal injury claims weren’t interested in keeping their own costs down as, under No Win No Fee arrangements, they wouldn’t have to pay these costs. He also thought that there was too much pressure on defendants to settle cases due to the huge costs involved.
The changes to litigation funding under LASPO therefore could make smaller personal injury claims less viable because the compensation paid to successful claimants must be enough to pay the success fee and the insurance premium.
Michael Hardacre is a Senior Personal Injury Solicitor at Slater and Gordon Lawyers UK.
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