BY Richard Craig, Accident Advice Helpline
No win, no fee reforms
Let’s take a brief look at the effect that Ken Clarke’s no win no fee reforms will have on personal injury claimants.
The most common type of PI case in the UK is an RTA-related whiplash claim. Legal fees, on average, amount to £1540 or thereabouts for each case. The mean value of a successful compensation package is £2500. If victims now have to pay their own counsel’s fees, this means that Joe Bloggs will now take home £960. Is this fair?
Mr Clarke’s 25% cap on fees, an apparent act of benevolence, actually makes it the case that a PI claimant would have to be awarded compensation of £6200 before the cap would ‘cut in.’ Most RTA cases do not meet this threshold unless a fairly serious injury is sustained.
The Justice Minister also says that compensation should be raised by 10% to offset this downturn. But again, this will not do much. Say a worker breaks his finger at the factory and is awarded £2000. Under the new system, he will lose £500 of that to his lawyer and then regain 10% of the total sum, leaving him with £1650. Essentially, he has been charged VAT on top of his claim.
These new proposals risk taking the most from those with the least, and need serious reappraisal before they are enshrined in the law.