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Personal Injury

Personal Injury - 2013 Changes 

January 2013
 
In the field of personal injury there will be numerous changes made which will affect the funding of personal injury cases.   These have been brought about by the introduction of the Legal Aid Sentencing & Punishment of Offenders Act 2012, as well as Rules of Court.   Unfortunately, it is still unclear what the final Rules will be which does, to some extent, make it difficult to plan.   However, the government propose introducing many of the changes by 1 April and probably the remainder of them some time during the course of 2013.
 
So, what are these changes?
 
FUNDING
 
  • Success fees will no longer be recoverable from the Defendants.
  • They may be recoverable from the client but up to a maximum of 25% of their past losses.
  • Qualified one way cost shifting is being introduced.   This means that in the event of the Defendants winning, they will not be entitled to recover costs.   However, there will be exceptions to this but it is not clear what these will be.
 
PART 36
 
  • The Rules on Part 36 will also change and if the Claimant goes under a Part 36 he will become responsible to pay the Defendants’ costs from his damages.   Again, the Rules are awaited to identify the detail.
 
DAMAGES BASED AGREEMENTS
 
  • This enables agreements to be entered into with clients whereby a sum can be deducted from damages less any costs recovered.     Again, Rules are awaited to determine the parameters .
 
THE FAST TRACK
 
  • Portal for RTA to be extended to £25,000.
  • Portal for employers’ liability and public liability likely to be introduced.
  • Consultation on whether to increase the Small Claims limit currently being considered.
  • Consultation on the level of portal fees along with fixed costs in the FastTrack currently under consideration.
 
The effect of these reforms is most likely to be to reduce the amount that can be recovered on these claims.   For example, the government propose a £500 limit on portal costs for an RTA.
 
PROPORTIONALITY
 
CPR will be amended so that, in effect, proportionality will trump necessity.   It is not clear how this Rule will operate, for example, will the Court say that any costs above 50% of the value of the claim will not be allowed recoverable from the Defendants?   This is only going to be resolved by satellite litigation.
 
COSTS BUDGETING
 
This will be introduced for all multitrack cases.
 
REFERRAL FEES
 
Referral fees will be banned.   The Solicitors’ Regulation Authority is currently considering guidance for solicitors that should be followed regarding such a ban.
 
The impact of all of these changes is likely to be very significant.   Research has suggested that the level of income will be reduced by 25% and the number of cases taken up will fall by 20%.   We shall have to see.   It is really up to those who represent Claimants to be imaginative and innovative in their approach in order to ensure that not only do their businesses stay intact but, more importantly, that people continue to have access to justice.
 
H. W. Wood Limited says: “The above changes could have a profound effect in re-shaping the Personal Injury sector. Practices, already running tight margins, will be forced to further scrutinise the efficiencies of their systems and the work they wish to take on.
 
From a PII perspective, Personal Injury firms have actually experienced significantly reduced premiums over the last few years and insurer appetite is high for specialists in the sector. It is worth bearing in mind that premiums will not necessarily reduce in line with any reduction in profitability. Insurers will be looking to insure firms who can demonstrate that the proposed changes won’t result in a drop in quality of the service they provide. Missed deadlines still results in a large proportion of claims so ensuring your processes negate this risk will be key.”
 

About the Author: Colin Ettinger is a Partner at Irwrin Mitchell. He started practice in personal injury cases in May 1976 when he was articled to Robin Thompson & Partners. He was made a partner there in 1980 and became part of their senior management team.

In 1995 he left with two colleagues to set up the London office of Irwin Mitchell. The personal injury practice in the London office has grown from strength to strength. For a few years now this office has been regarded as one of, if not the, strongest Claimant personal injury practice in London

He specialises in acting for those who have been seriously injured. He also has a particular interest in cases involving Health and Safety at Work issues He has considerable expertise in dealing with these types of cases. Colin has been described as a “Claimant’s champion”, and has been given particular praise for his receptiveness to client rehabilitation issues. For a number of years he has been rated as one of the top Claimant lawyers in London, and now, in England.