In the UK a new law will come into effect from April 1st 2013 called the LASPO – which stands for The Legal Aid, Sentencing and Punishment of Offences Act. This has come about following an ongoing investigation regarding pricing by Lord Jackson, which started 3 years ago.
There will also be other changes taking place including the possibility of reduction to Road Traffic Accidents fixed pricing, from £1200 to £500, although this hasn’t been confirmed just yet.
The overall compensation commission to solicitors schedule to rise by 10% after April 1st. This contradicts the contingency fees which are in place at present where a solicitor can charge any fee “up to a maximum of 25%”, this is known as a success fee. This is to cover the risk element that the solicitor takes if the case is unsuccessful and therefore the solicitor doesn’t make any money.
‘Referral fees’ will also come to an end from April 1st 2013 which will largely affect how Claims Management Companies will deal with new claims.
This will have a huge impact on the “compensation culture” some suggest has come over from the way things work in the USA. It has been reported that Claims Management Companies were passing on claims without being checked first, on to solicitors to obtain a referral fee.
Under the new legislation on April 1st, a person will no longer be in a position to become insured to cover them losing if their case is unsuccessful and so will be liable for their own cost.
Despite these plans, the future of personal injury claims remain unpredictable as it is still important to promote justice to innocent and trustworthy people who have genuine cases of personal injury. What will happen still remains to be seen.