You call it reform, we call it unjust.
Recent changes made to our compensation system hurt victims. We highlighted this in our 2011 Autumn newsletter.
Much damage has been done in the interest to reduce fraudulent claims and insurance premiums. This stemmed from the mis-belief that we suffer from a compensation culture. Yet the advisor appointed by Prime Minister Cameron concluded that
The problem of the compensation culture prevalent in society today is, however, one of perception rather than reality
Lord Young, (2010), Common Sense, Common Safety
With other organisations supporting and representing victims, RoadPeace opposed the recent changes to our compensation system.
Key changes to civil compensation occurred in 2012 – 2013.
As a result of changes, both through new legislation and ministerial decisions, there has been a radical change, almost entirely to the detriment of claimants and their solicitors, to the field of personal injury compensation following a crash. These included:
• Changes to the RTA portal which affect personal injury claims from £1 up to £25,000. The government, following a consultation, decided to reduce the fixed recoverable costs of solicitors (the costs they are able to claim back to cover the expense of their work) to £500 for claims of up to £10,000 (where it was formerly £1,200) and to £1,200 for claims of between £10,001 and £25,000.
• The Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) introduced far ranging changes to the legal system within the UK. It has, in effect, brought an end to the era of ‘no win, no fee’ arrangements (conditional fee agreements) and the ability for a successful claimant to keep 100 percent of their compensation (damages).
o Under the post-LASPO system, solicitors will be able to take up to 25 percent of the compensation from the claimant as a ‘success-fee’; solicitors are only able to take 25 percent of the compensation awarded for damages, they cannot take any portion of the amount the court has allocated for future care needs. Previously solicitors were able to claim a success-fee from the losing side.
o The government has also introduced, as part of the above LASPO changes, a system of ‘qualified one way costs shifting’ (QOCS), which ensures that a claimant who is unsuccessful is unlikely to be made to pay the legal costs unless the claim is: thrown out (because it is fraudulent) or the award of damages, by the court, fails to meet a out-of-court offer by the defendant (almost always the insurance company).
• Whiplash has also been targeted for reform. The government’s consultation document labelled the UK as the ‘whiplash capital of the world’, this despite a study by APIL which confirmed that an estimated 7 percent of whiplash claims are believed to be fraudulent. Government proposals included an independent medical assessment of claimants (despite the apparent failure of these within the sphere of welfare benefits where 40% of appeals are successful).
• The government’s whiplash consultation also looks at whether to allow for whiplash/other personal injury claims, which amount to up no more than £5,000 to be dealt with through the small claims track, where claimants are unrepresented. But unrepresented claimants, known as ‘litigants-in-person’, will have to face lawyers acting on behalf of insurance companies.