As a result of Lord Jackson’s Civil Litigation Reforms the Legal Aid Sentencing and Punishment of Offenders Act 2012 (LASPO) was implemented on the 1 April 2013.
There were a number of fundamental changes in the way that the funding of litigation can now be pursued. The main changes meant that lawyers are not now able to charge a success fee to the Defendant insurer on conclusion of a claim. Any success fee now has to be deducted from the client’s damages and this is limited to 25%. The client’s future losses were “ring fenced” and the 25% success fee was not deductible from that amount. In addition the legislation means that After the Event Insurance (taken out to protect a Claimant against having to pay the Defendant’s costs should the legal action prove unsuccessful), is no longer recoverable - that too has to be deducted from the client’s damages.
A recent survey carried out by ARAG UK claims that 80% of the law firms surveyed believe that the Claimants’ access to justice has been restricted as a result of these reforms and 64% believe that there has been a significant restriction as a result.
To counteract the possible deductions from the client’s damages (the 25% success fee and the insurance premium) awards for pain and suffering (General Damages) have been increased by 10%. However, this has not really put the Claimant in the same position that he would have been prior to the reforms. 72% of the firms in the ARAG survey believe that the 10% uplift on General Damages was insufficient.
It remains to be seen when the level of awards for General Damages will be reviewed and assessed. Compared to the U.S. awards here in the U.K. are much lower and do not reflect the level of pain and suffering which is encountered by many Claimants. Therefore, a wholesale review of the amount awarded is more than warranted.
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