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No win, no fee reforms

In 2010, faced with a growing compensation culture, the Government commissioned two reports suggesting that action was needed to reduce the cost of civil claims. In April 2013 many of the recommended reforms are set to come into effect and it is important that you are made aware of these changes and their impacts.

The changes

With effect from April 2013 we shall see:

  • The abolition of the recoverability of After The Event (ATE) premiums and success fees from losing defendants, where agreements are entered into after 1 April. This means claimants will have to pay their lawyers’ success fees from their damages (up to 25% of their damages).
  • The banning of the payment of referral fees to claims management companies (CMCs) and other third parties.
  • A 10% increase in general damages for pain and suffering except for claimants who can still recover their success fee.
  • A new mechanism to fund claims, under which solicitor will take a percentage of the damages recovered by their client (‘Damages Based Agreements’)
  • Claimants to receive a ‘bonus’ of up to 10% on their damages where a defendant fails to beat the claimant’s Part 36 offer.
  • A stricter culture in the courts, with less leeway given to parties who do not comply with rules and directions, or who incur delays.
  • A greater focus on proportionality and the control of costs, with fixed costs for lower value claims and costs budgets to be set at the outset of multi track claims.
  • A simpler portal based claims process to apply to all Employer Liability, Public Liability and Road Traffic Act claims worth under £25,000 from the end of July, with as little as 3 weeks in which to investigate and reach a decision on liability, but with the benefit of substantially reduced claimant costs.

The emphasis of the reforms is clearly swifter justice and a reduction in the disparity between awards and solicitors’ costs (currently averaging 142% of the sums received by injured parties). We believe that (properly transacted) these reforms should ultimately reduce the cost of injury claims.

An expert view - Browne Jacobson

Bluefin Sport are pleased to be working in partnership with Browne Jacobson Solicitors, whose nationwide insurance litigation team offers a specialism in the defence of personal injury claims and employers and public liability matters. They have particular experience in claims against sports clubs and stadiums.Browne Jacobson suggest:

  • An approach that enables key decisions to be taken on portal cases in the new short time scales and with limited information will maximise the opportunity to settle valid claims quickly and economically.
  • Expert advice and management of economic risks will enable early liability decisions to be taken so that valid claims are settled quicker and cheaper within the portal but that claims that should be defended are identified and properly disputed. 

Recommended steps 

We would encourage you to look at your systems and processes now to ensure that they are in the best possible position to take full advantage of the reforms when they come into effect.Please contact Browne Jacobson solicitors or Bluefin Sport if you would like further guidance or information.

Juliette Shaw | Solicitor0121 237 3954
jshaw@brownejacobson.com

Steve Moore | Bluefin Sport Executive Director
020 8781 9252
steve.moore@bluefingroup.co.uk