Proposals to ban no win no fee conditional fee arrangements have been put before Parliament, said Justice Minister Jonathan Djanogly recently.
Claiming that the current personal injury claims system was symptomatic of the ‘compensation culture’ afflicting the UK, the Justice Minister said that middle men have been taking it to the bank as the rest of the country ends up paying through the nose for higher prices and increased insurance prices. Mr Djanogly said that many of these personal injury compensation claims are completely contrived, only getting through the courts due to the current system’s design, which allows altogether too many to profiteer off of minor incidents and traffic accident claims.
People have no stake in the legal costs associated bringing claims, a situation which the Justice Minister called ‘bizarre.’ The proposals currently before Parliament aim to change this, which could result in claimants thinking long and hard about whether they wish to bring suit.
Insurers have faced tough criticism for passing on the details of their customers to legal firms in return for a fee payment. Meanwhile, those referral fees can be reclaimed against an insurer or a defendant if a lawyer is successful.
Between 2002 and 2010, the number of personal injury compensation claims rose by 72 per cent. The government maintains that the results of this has resulted in the NHS, local authorities, and consumers all experiencing higher costs.
The new personal injury claims policy followed on the heels of news that motor insurance costs will be investigated by the Office of Fair Trading after it was found that premium prices increased by 30 per cent over the past 12 months through May.