Reform of the personal injury process announced by the ministry of justice; MyClaim fears increase economic pressure on solicitors

August 21, 2008 (PRLEAP.COM) Business News
Southampton, Hampshire (MyClaim) August 21th, 2008 - The long awaited Ministry of Justice reforms on personal injury were released at the end of last month, and MyClaim is pleased that many of the proposed changes have not been implemented. MyClaim expects an increased economic pressure on solicitors, which will have an adversely affected on Claimants.

These reforms were instigated by Lord Falconer in 2004 when he expressed that the "claims-friendly culture" was having a negative impact on the UK. The culture he said "creates a fear of legislation, can make organisations risk adverse, and cause local authorities to cancel events and cause doctors to practice defence medicine".

Essentially, he was saying it has become too easy for people to bring claims. Also at the heart of these reforms were concerns that the litigation process has become too lengthy; and solicitors' costs are too high and often disproportionate to the amount of damages awarded. It was feared that these costs were becoming an increasing economic drain on the insurance companies, having to foot the bill.

Perhaps most concerning from the Claimant's point of view was the proposal to raise the small claims limit in personal injury cases from £1,000 to £5,000. This would have been disastrous for the Claimant whose injuries were worth less than this. It would have meant the Conditional Fee method of funding commonly known as the No Win No Fee would not have been available to them, as solicitors would not have been able to recover their fees from the Defendant or the Defendant insurers. With Legal Aid no longer available for personal injury cases, this would have left a huge number of people uncompensated for their injuries. Clearly, some Claimants would have attempted to bring the claims themselves. However, without professional legal representation, many would have ended up accepting inadequate offers, and the court's time and resources would have been wasted assisting countless people unfamiliar with legal procedures and practice. Fortunately, this proposal has not been implemented.

There has however, been significant proposed changes made to the system and fee structure for Road Traffic Accident cases worth under £10,000. Claimant solicitors will now only have 5 days after they have been instructed to notify Defendant insurers of the claim, and the Defendant insurers will only have 15 days to provide a decision on liability. This is in contrast to the current system which places no time limit on Claimant solicitors to notify the Defendant insurers within limitation, and a system that allows the Defendant insurers 3 months to investigate liability. While, My Claim is a strong advocate for streamlining the claims system, these reforms raise concerns.

The strict time limits and fixed fees will only make it increasingly difficult for Claimant solicitors to thoroughly investigate claims, and Defendant insurers are likely to be faced with the burden and cost of claims which Claimant solicitors might not have previously brought, having had the opportunity to 'filter them out.' However, until the still pending fee structure for these cases is announced, it is hard to speculate on the true impact of the reforms.

Fixed fees and time limits had been proposed for all types of cases; however these proposals have not been implemented. MyClaim can only support this decision as these proposals would have undoubtedly put economic pressure on solicitors, and could have only adversely affected Claimants.

My Claim guarantees that through us your claim will be handled by a firm of solicitors with the experience and technology to face these changes; and that in turn your case will be conducted with maximum efficiency.