Legal Aid, Sentencing and Punishment of Offenders Act – One Year On!

100% compensation, referral fee ban, and no win, no fee claims

So we’re almost at the 12 month anniversary since the government drastically changed the law which turned the personal injury claiming world upside down. For personal injury claims, solicitors are no longer able to recover a Success Fee or an After The Event insurance premium from the other side.

So how’s this affected solicitors and the victims claiming for compensation?

What the changes meant

The changes meant that lawyers are not able to recover all fees from the other side, which for most law firms has stopped them being able to offer 100% compensation agreements. Now, a lawyer can take up to 25% from your payout to cover their Success Fee, and can charge you for the premium of insurance.

Many law firms are struggling as there were also severe slashes in legal fees made by the government as well (don’t worry – we’re fine though).

Sadly, many accident victims are losing out on thousands of pounds in compensation that should rightfully be theirs because of the government rule changes. The insurers are, I imagine, very happy – with Direct Line recently being in the press for seeing profits soar by more than 70% but only reducing premiums by just 3%.

So all this talk of lower premiums following the changes seems to be utter rubbish I’m afraid – the victims are losing, and the responsible companies are cashing in.

Referral Fee Ban

Now this, we loved! Insurers have been cashing in millions in selling claims to solicitors for fees of up to £1,000.00 per case, which was what really led to the increase in premiums and people being pushed in to claiming for personal injury when they didn’t necessarily want to.  Middleman claims agencies were also making a killing from selling claims to solicitors as well.

Now, we’ve never paid referral fees and have always been against it. It reduces the quality of legal services on offer and limits access to justice as solicitors can’t afford to provide a proper service having paid such a huge referral fee, and the victim doesn’t choose their lawyer. We have always spoken out against it as there are countless victims of the faceless market who will have under settled their claims because their cash strapped solicitors couldn’t afford to fight for a higher payout.

However, people are still unknowingly using referral companies who can now take a cut from your claim for passing you to a solicitor. As most lawyers take a cut as well due to the Success Fee problem, people can end up facing huge deductions they may not have been fully aware of when going ahead with a case.

On top of that, we’re aware that there are still some black market firms and people who are still prepared to negotiate referral with solicitors. It’s illegal, so avoid them.

The best way to avoid getting caught out is simple – go to a law firm directly!

100% compensation a thing of the past?

For most firms, yes. But we still offer 100% compensation agreements for most types of cases like work accidents and public liability claims. We have been taking on a lot of cases on as a result, and we offer it because we take on and win high volumes of cases when compared to other firms anyway. We have become the envy of the legal world with our unique 100% compensation offering, and we have already saved victims thousands of pounds in compensation by not taking a deduction from our clients.

For more info on how we do it, click here.

Myth-busting

Some law firms have misguided people when it comes to what the changes mean. Here are some myths that are simply not true in any way shape of form:

  • “It is illegal to offer 100% compensation agreements” – It is not illegal to offer 100% compensation agreements at all.
  • “Its impossible to offer 100% compensation” – It is not impossible to offer 100% compensation, and it does not compromise the service or value of the claim.
  • “Lawyers have to charge a Success Fee” – A law firm doesn’t have to charge a Success Fee to their client now they can’t get it from the other side.
  • No Win, No Fee has been banned” – No Win, No Fee hasn’t been banned.
  • “100% No Win, No Fee” – does not necessarily mean 100% compensation!

 

Related Post

This website uses cookies.