New Personal Injury Law may drive up quality of care

Guest PostEarlier this year there was a drastic change in the law concerning personal injury claims. The Legal Aid, Sentencing and Punishment of Offenders Act (LASPO) was introduced in April 2013 and now represents a profound change in aspects of Legal Aid.^. There are winners and losers with this new act but the reason it had to be done has a sound basis. It was basically to combat the many fraudulent claims being made in ‘crash for cash’ illegal groups who arrange ‘accidents’ just to claim and also the surprising amount of legal companies who were making money from this.

Before the New Act:
Previously a personal injury claim was done on a ‘No Win No Fee’ basis and nobody could fail to notice the intense media advertisement of the companies handling these claims. If you were injured you would actually receive the full amount of compensation due with no personal cost at all. The solicitor handling your claim would rake back any costs involved, e.g. medical reports and expenses, fees from the court etc from the other party being claimed against – via their insurance cover.

After the April Act:
There is now tougher regulation and a ban on the ability for solicitors and claims management companies to handle any referral fees. Some rogue companies previously also took fees from customers just on a verbal basis without there being any written and agreed contract. This is now also banned.

The client now has to pay any of these additional fees out of their compensation amount awarded; they will be totally responsible for all their expenses.

The crucial part of this regulation is that if there is a dispute fees may be anything from just a few hundred pounds up to thousands. Any complex cases may even result in the personal injury claimant having to pay the defendants costs too. Consequently small claims have to have substantial and hard evidence of proof of accident to make sure that their claim is proven. Even so the problem has to be faced that the claimants costs may rise substantially and even wipe out the amount they are awarded completely. Good legal advice is therefore advisable before any claim is pursued.

So is this Act working?
In July the government reported that many Claims Management Companies have now shut down – and this is not just an odd few – it is hundreds! The Claims Management Regulation Unit (CMRU) released figures that proved the efficiency of the new Act. In March 2012 there were 2,435 registered companies handling personal injury claims. In June 2013 – only 2 months after the new Act was introduced, this number had reduced to only 1,700.

There are still mixed views on the eventual outcome of the new regulations and only time will tell as to whether they have achieved all their goals. However conclusively it has to be said that these measures are bound to have an effect on the ‘compensation culture’ which was becoming far too open to misuse. Ordinary people who are honest have been suffering the consequences of dishonest claims through a rise in their insurance costs. It is therefore definitely now advisable for anyone who feels they have a right to make a personal injury claim from an accident, to consult a solicitor first before contacting a Claims Management Company. The quality of advice honest claimants need can be now almost guaranteed to be of higher quality and the company handling the claim will necessarily take more care in their judgements and legal advice.