New no win no fee rules ‘wrong and unfair’

Proposed changes to the way no win no fee legal claims work in libel and privacy cases would leave ordinary citizens having to deal with rules that are both ‘wrong and unfair,’ according to a libel reform campaigner group.

The prime minister has recently received a letter urging him to think twice about instituting changes to the no win no fee accident claims system,  as libel reform campaigners and ‘tabloid press victims’ have come together to protest the new changes.  The new bill, which includes restrictions on ‘after the event’ insurance and personal injury claims that use conditional fee arrangements, is set to have its final day in the House of Lords soon, with acceptance of the bill preventing claimants from recovering their insurance premiums and their solicitors’ success fees from the losing side.

The campaigners say in the open letter that the bill’s scope should be narrowed to exclude libel and privacy cases.  The campaigners have strong objections to the measure, which was called ‘unjust’ in the letter, as it will only result in severe restrictions to ordinary Brits in libel and privacy cases when it comes to access to justice.  Transparency in the public interest, free religious debate, and scientific breakthroughs could all be threatened under this new bill, with ordinary defendants finding it harder to find support for legal actions taken against them by large, deep-pocketed institutions that wish to silence whistle-blowers.

Moreover, victims of abuse from tabloids will have no recourse against tem for gross misrepresentation, false accusations, or phone hacking attempts, the letter also said.

Secretary sues no win no fee claims service for injuries

In an ironic twist of events, a no win no fee claims management firm finds themselves a defendant in a personal injury compensation case where a secretary fell down some office stairs, suffering a broken wrist.

No win no fee accident claims service firm Quantum, which provides help for those in need of making work accident claims against their employers, has been named as a defendant by Rose Clark, the 56 year old Aberdeen native and employee of the company who suffered an injury on the job in March of 2007.  Mrs Clark’s injuries were so severe that it was necessary for her to have plates surgically fitted within her wrist to facilitate her recovery from the fall, which she claims is the fault of her employer, as the staircase lacked adequate banisters and was too steep and narrow. She is asking for a £13,500 compensation award from Quantum at Edinburgh’s Court of Session.

Mrs Clark, who told the court that she was left ‘in mortal agony’ after the fall, and barely able to speak once she regained her feet, recounted how the colleague who discovered her in the wake of the injury suspected the woman had broken her neck due to the way she was lying at the bottom of the staircase.  The offices were visited in the wake of the accident by a council inspector, discovering that one of its steps had been loose at the time of the incident.

Quantum argued that the injured woman might have suffered the fall by one of her high-heel shoes catching on a trouser leg.  However, Mrs Clark rebutted the assertion, stating that she would have undoubtedly known if that was the cause of her fall.

Injury solicitors launching campaign against legal reforms

Injury solicitors have begun to strike back against legal reforms to be instituted by the Government by warning injured individuals to not tarry in making accident claims.

Accident victims need to stop wasting time and make personal injury claims as soon as they can, some solicitors have said, as the government is poised to make changes to no win no fee accident claims.  The changes in question are included in the new Legal Aid bill working its way through Parliament, and could go into effect as soon as this coming spring, experts say.

The planned reforms include an abolition of success fees as they exist currently, with the insurers of a losing defendant having to foot the legal bills for the solicitors of a successful claimant.  The aim of the current system was to encourage out of court settlements, solicitors say, adding that under the new rules, claimants will see their compensation payouts diminish because they will have to pay their own legal fees out of their claims awards.

The Government’s proposals to change the current scheme had been made in an attempt to put an end to the so-called ‘compensation culture’ gripping the UK, solicitors say.  However, only around 1 out of every 4 accident victims ever make a claim, indicating that the Government may be trying to eliminate a problem that is not nearly as prevalent as it may think, and the only one to benefit from these new changes will be rogue employers who fail to keep the health and safety of their workers in mind and and large insurance firms, as many injured people in the future will have extremely limited access to justice, even though they may have a valid claim for injuries they sustained due to a failure of on the part of their employers to provide their workers a safe work environment.

Local council rejects £17.6m in bogus accident claims

One local authority has rejected £17.6 million in bogus accident claims over the past six years after taking a tougher stand on personal injury compensation fraud in 2005.

Caerphilly Council prevented £6.4 million being paid out on what turned out to be bogus accident claims slips, trips, and falls over the past three years.  The local authority employed a dedicated team in order to reduce the number of no win no fee accident claims being made against the council to 350 annually, down from 1,600 a year in 2005, and also brought charges of contempt of court in five instances.

The council said that an estimated three out of every five claims are bogus based on the work of its six-person insurance team.  The team has worked hand-in-glove with private investigators and has used many methods, such as surveillance, in order to discover the veracity of these claims.

The local authority stands to lose approximately £50,000 for each compensation case it pays out on. This means that instead of wrongly paying out the funds, Caerphilly Council has instead reinvested the cash into frontline services, said Colin Mann, deputy leader.

Mr Mann said that the council was more than happy to pay in the event of a genuine claim. However, due to the huge volume of false claims, many of which may be encouraged by disreputable legal experts, the local authority needs to reinforce how trying to fleece the council will simply not be tolerated, the deputy leader added.

Claims proven to be false include one man who injured his elbow in a fight but instead claimed that his injury was caused by tripping on a pothole, while another was discovered to have both fallen from a bus and also tripped on pavement at the same time and half a mile away.

OFT launches investigation into insurance increases

The insurance industry, who has long since blamed rising premium prices on the so-called ‘compensation culture’ fostered by no win no fee accident claims, is under investigation by the Office of Fair Trading to determine the root causes of the issue.

Probing whether there is a lack of competition between major insurance providers, the OFT is leaving off their claims that no win no fee lawyers have been the driving force behind the 40 per cent increase in car insurance premium prices over the last 12 months.  However, insurers are still crying foul over an increased number of car accident claims, stating that the increased costs of paying out on the rising number of claims is crippling them financially.

The consumer watchdog will instead be focusing its investigative efforts on the impact insurance comparison sites have had upon the marketplace.  Some of these price comparison sites are actually owned by major insurers, such as Admiral Group-owned

The OFT will also be investigating what kinds of impact additional insurance products, such as the provision of replacement cars, approved repairers, how claims are dealt with, and legal protection on premiums, have had on the insurance marketplace.  The results of the study will be collected and published this December.

Otto Thoresen, the Association of British Insurers’ director general, said he ‘welcomed’ the OFT’s probe, as it will give the industry in general another chance to showcase the kinds of pressures car insurance providers are facing in regards to costs.  Mr Thoresen also said that the probe will further bring to light the steps the industry has undertaken to ensure their policyholders get the most complete and comprehensive cover they can.

No win no fee lawyers dealt a blow by European court

In a recent case brought by the Daily Mirror‘s publisher, the European court of human rights ruled that success fees recovered by no win no fee lawyers in defamation and privacy cases represented a significant freedom of expression violation.

The Strasbourg court found that the nature and depth of the flaws in the no win no fee payment system is breach of European human rights conventions.  Legal experts predict that the ramifications for future libel and privacy cases in the UK will be significant. However the popularity of no win no fee accident claims will most likely be unaffected or affected only tangentially, these same experts maintain.

The court case stems from an appeal made by the Daily Mirror after they were subject to more than £360,000 in success fees on a £500,000 libel settlement.  The Strasbourg court stated that requiring the publisher to pay the success fees was out of proportion with the total settlement.  The original conditional fee agreement for the plaintiff in the case entitled it to receive a success fee of 95 per cent in addition to 100 per cent of its base costs.

MGN, the paper’s publishing group, stated that the recent court ruling in their favour has vindicated their long, hard fight regarding the case’s success fees. An MGN spokesperson also stated that the court found the entire conditional fee agreement system with success fees to be a flawed one.

The MGN spokesperson continued, stating that the firm hoped the judgment would increase the amount of pressure on the government in efforts towards the abolition of such recovery fees from defendants.  The spokesperson expressed MGN’s hopes that such an occurrence would be happening sometime in the near future.

One Ministry of Justice spokesman stated that the government has taken the court’s ruling into consideration and will be responding with its observations in due time.

No win no fee accident claims may rise after Christmas

According to one firm, no win no fee accident claims may rise after the Christmas celebration season.

According to one insurer, the threat of traffic accident claims is heightened by more than drink drivers.  Passengers who exceed the legal limit also account for a rise in claims as well.

Swift Cover stated recently that individuals that are behind the wheel are no more in danger of suffering road accident claims than are those who ride as passengers in the same car.

In a study recently conducted by the insurance firm, passengers over the legal limit were found to contribute to 100,00 accidents. The study also found that 650,000 near misses can be attributable to inebriated passengers as well.  With an estimated 35 million tipsy partygoers set to beg a ride by the New Year, these figures could be set to increase.

Swift Cover’s claims director Robin Reames commented on the firm’s research.  Reames stated that the study sheds new light onto a hitherto-unknown danger that motorists may face in driving their intoxicated relatives or friends home from Christmas or New Years celebrations.

With the recent bout of ice and snow the UK has been experiencing, the weather may only exacerbate things even more.  Fellow insurer AA Insurance recently revealed that road accident claims have risen by as much as 100 per cent during the wintry weather.

The insurer indicated that due to the snow and ice blanketing the country, even sober motorists have been having extreme difficulty in keeping their cars on the road.  Drivers have been losing control on hills and sharp turns and have been barreling into kerbs , other motorists, and even parked cars.

Insurance companies have stated that foul weather should be taken very seriously.  They recommend heeding the warnings of local authorities and limiting car trips to only when strictly necessary.

Criticism for Justice Secretary’s “no win no fee” restrictions

The introduction to a green paper that recommends restrictions to so-called “no win no fee” litigation arrangements in an effort to reduce the costs of civil litigation has been criticised by the Association of Personal Injury Lawyers.

The introduction, which was penned by Justice Secretary Kenneth Clarke, prompted responses from several personal injury lawyers that doing so would put an undue burden on those accident victims with very little resources, which would be most in need of the no win no fee accident claim programme.

The key proposal of the green paper is an abolition of the ability to recover success fees and any costs associated with a claim in an agreement using the “no win, no fee” scheme.  This means that a claimant is responsible for paying the success fee of their lawyer.

Such a move would encourage claimants to take a more active role in the costs accrued on their behalf in the pursuit of their claim, according to Mr Clarke.

However Muris Lyons, president of the APIL, stated that the only people who would benefit from such a proposal is both the negligent party and his or her insurer, since they had collected a premium in the event of the payment of such a cost becoming necessary.

Mr Lyons added that any proposal to increase compensation awards in order to offset the efficacy of this move is a so-called “white elephant” due to both the underperforming nature of current damages awards, which have never been increased as recommended by the Law Commission, and also the proposed increases not necessarily covering the costs that would be borne by the injured party, which would leave them worse off than when they started.

Those who are most likely to be affected would be people suffering catastrophic or serious injury where the damages involved are quite high, according to Mr Lyons.