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Personal injury claimant lawyers hit back at CFA reforms

28 March 2011

Personal injury claimant lawyers have hit back at the government's decision to endorse Lord Justice Jackson's 'no win, no fee' reforms, saying it will lead to denial of access to justice for more than 50,000 potential claimants and that the plan is "ideologically rather than evidence driven".

Justice secretary Kenneth Clarke is due to make an announcement tomorrow expected to confirm the government’s support for the Jackson report on costs in civil litigation.

If adopted the proposal would scrap the recoverability of after-the-event premiums, cap success fees at 25 per cent and increase damages by ten per cent.

The Jackson proposals are being examined in combination with the proposed reform of legal aid as part of the government’s wider review of access to justice and the costs associated with it.

Speaking on the eve of the government’s announcement, Andrew Dismore MP (pictured), coordinator of the Access to Justice Action Group (AJAG), suggested the government would not have had the time to consider properly the 800 responses it received on the proposal in the six weeks since the consultation closed.

“The legal aid cuts are serious, but the impact of their wider cuts in civil justice funding will affect far more claimants,” Dismore said.

He continued: “Accident victims will end up paying up to 25 per cent of their compensation in legal fees, costs that until now were paid by those responsible for the injuries, through their insurance companies.”

Conditional fee arrangements have grown in popularity outside the personal injury sphere in the past few years, with a number of civil and commercial cases being brought on a ‘no win, no fee’ basis.

The case brought by Ivorian villagers against Trafigura, which later settled out of court, has been the biggest case to be CFA-funded, but others, from Naomi Campbell to Christine Gill – who fought off the RSPCA over her mother’s will – have relied on ‘no win, no fee’ agreements for bringing claims.

CFAs have also been used by defendants, including journalist Simon Singh in the libel case brought by the British Chiropractic Associations.

AJAG said the ten per cent increase in general damages for pain and suffering will not be adequate to compensate for the cap on success fees.

“Ten per cent is the margin of error in negotiations, so the uplift will be meaningless and will not happen in practice,” AJAG said in a statement disclosing separate finding that claimants would be five per cent worse off.

AJAG also disputes government figures, saying the same costs will be incurred on a case worth £2,500 – which includes most work accident cases – as one worth £9,000 or £10,000, because the amount of work is roughly the same.

“There is an irreducible minimum that needs to be done in any case, and that has already been established in RTA cases by the fixed costs agreement,” the group said.

“Inevitably, the less the damages, the closer the ratio between costs and damages. The only way that can be avoided is by not allowing claimants in lower-value cases to have lawyers to pursue their claims and to make them do it as litigants in person, where they will be up against experienced insurance company reps.”

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