Personal injury lawyers will cut the number of conditional fee agreements they offer to clients as a direct result of the civil justice funding reforms announced by the government last week, according to research seen exclusively by the Gazette.
A survey of 100 claimant personal injury lawyers by law firm referral service Contact Law revealed that 94% thought the reforms would have some impact on their business, and 94% thought it would have a ‘significant impact’.
Some 88% said they would offer fewer ‘pure’ conditional fee agreements as a result of the changes, which will limit the maximum success fee to 25% in personal injury cases.
Only 31% of respondents said they would continue to offer pure CFAs for all viable claims, while 69% said they would offer pure CFAs on very strong or very large claims, but ask for a financial contribution from clients on more marginal claims.
Some 88% of those polled said they thought the government’s reforms would inhibit access to justice for genuine claims.
Dan Watkins, director of Contact Law’s find-a-solicitor service, said: ‘We understand the government’s desire to protect businesses and public service organisations from spurious claims and excessive legal costs.
‘However, it should be very wary of the unintended consequences that will be caused by changing the economics consumers face when bringing a case.
‘Not only will these recommended changes reduce consumer access to justice, but it could mean that an employer with shoddy working practices may go unpunished, risking further accidents in the future.
‘For example, if someone has had a serious injury at work caused by a lack of workplace training or poorly maintained equipment, but the evidence surrounding the accident is limited, they might think twice about bringing the claim, however valid, because they wouldn’t want to risk paying out money to bring a claim that they might lose.’
He added: ‘By reducing the profitability of no win, no fee cases, this will disincentivise lawyers from taking cases on with marginal evidence, or even if they are prepared to run the case, they are more likely to ask for an up-front fee from the client to compensate for the reduced success fees.’
Under the government’s plans published last week government’s plans, success fees will be capped at 25% of damages in personal injury cases, and these will be recovered from a claimants’ damages rather than from losing defendants.
Claimants will no longer be able to recover after-the-event insurance premiums from losing defendants, except in relation to the cost of obtaining expert reports in clinical negligence cases, and general damages will rise by 10%.
Source: The Law Society Gazette
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