'It is all about perception’ is a truism that stands the test of time. And people’s perceptions can take a long time to change. The perception that there is a compensation culture perpetuated by no win no fee lawyers still seems to persist at least to some extent.
Yet most people who have cause (and in the cases we deal with ‘need’) to make a claim for compensation after they have suffered life changing injury would say no win no fee agreements were a good thing.
Without no win no fee arrangements and with no Legal Aid for virtually all personal injury cases, it is difficult to see how making a compensation claim (that is accessing justice) would be viable.
Even cases supported by trade unions or legal expenses insurance often proceed with no win no fee arrangements.
When Legal Aid was taken away for almost all classes of personal injury litigation more than 20 years ago, conditional fee agreements were tweaked. Whereas previously they had operated as an alternative for those who didn’t qualify financially for Legal Aid, suddenly the legal landscape was altered dramatically. CFAs had to work. No client would choose to pay a solicitor by the hour when a no win no fee arrangement might be offered.
Insurers meeting claims suddenly had to adjust to having to pay their own solicitors’ costs, plus the compensation sum if the claim against their insured was successful and the Claimant’s legal costs (including ‘additional liabilities’ being the legal expenses insurance premium and the success fee charged by the solicitor representing the Claimant).
So began the costs wars (more satellite litigation being undertaken about how much was to be paid as legal costs than on what was to be paid as damages). Not long after, the feeling that the floodgates had opened and everyone was claiming compensation (and indeed health and safety had gone mad) was not diminished by the removal of barriers to entry to what was seen as a closed shop. Advertising and indeed cold calling; claims management companies cold calling and referral fees were all hot topics. Little wonder the perception was that everyone was claiming compensation; suing for the slightest loss. Insurers played on that in order to sell cover in case their insured was sued; and indeed many profited from their own referral fee arrangements selling claims to panel firms.
The idea that no win no fee was the fuel behind the compensation culture was a genie that would not go back in the bottle.
In subsequent years referral fees were eventually outlawed; claims management companies were thwarted by prescribed and fixed costs being introduced to lower value claims (larger firms needed more and more volumes of cases to make the tiny ‘per case profit’ they could make having paid for the work to amount to something worth having); cold calling, that had done nothing to make the public sympathetic to those needing to bring claims, was vilified.
Insurers also won reforms (in return for a promise that customers would see lower premiums) so that they no longer had to pay additional liabilities (legal expenses cover and success fees incurred by Claimants). Those now have to be met by the Claimant in return for a modest increase in the compensation paid; the promise that they will not ordinarily be responsible for paying their opponent’s costs in the event their case is unsuccessful (so in theory a need for a different, cheaper indemnity from legal expenses insurers); and restrictions on the amount of success fees that can be charged to them.
More recently lower value claims are now cases which essentially work like small claims Court cases do – the Claimant is encouraged to pursue the claim themselves without a solicitor by rules that now prohibit the recovery of the Claimant’s legal costs from the losing opponent.
In the last 10 years the UK population has grown by 5-10%, (and 15-20% since 2000). Despite that the number of compensation claims has steadily declined year on year and every year in the last 10 years. The impact of the latest reforms, and indeed the Covid19 pandemic suggest that the downward trend will not change and that we have seen the high water mark of personal injury compensation claims being made. 1,048,309 claims were made in 2012/13 – approximately 1.6% of the then population had a claim registered with the DWP, the central ‘authority’ on claims numbers. In 2021 there were 564,359 claims registered which would be equate to approximately 0.8% of the population.
Have things become safer – did ‘health and safety gone mad’ bring about changes? Probably not – people still get injured – the figures showing how many made a compensation claim is not confirmation of how many were injured. That we have probably eroded people’s routes to justice – and by doing so heaped a larger burden on the State upon which those people depend more than they might otherwise have seems inescapable; but exploring that further is beyond the scope of this article.
What seems indisputable is that despite everything that has changed, no win no fee arrangements are still the way most (if not all) Claimants would be advised to access justice. If it is possible to assess the risk of the case being unsuccessful – and to find a supplier of legal services willing to accept taking on that risk – why would a Claimant ever choose to take the risk and pay by the hour or otherwise and irrespective of whether their claim is successful or not?
Financial compensation is the best the law can do to achieve some measure of justice for those injured by other people’s negligence. No win no fee arrangements are the keys to accessing it. Solicitors specialising in serious injuries litigation will always consider no win fee agreements as likely to be the only way their clients might be able to access justice and recover compensation. For the increasingly small number of people who need them, and despite the spin that wove them into the popular, negative but perhaps misleading perception; no win no fee agreements are a good (indeed essential) thing.
To read more about Brethertons Spinal Cord Injuries Team - https://www.brethertons.co.uk/site/services/life-changing-injury-solicitors/spinal-injury-solicitors/
To follow us on Twitter - @neurolawyer
To contact us – telephone 01788 557617, or email jonrees@brethertons.co.uk or sianbuxton@brethertons.co.uk or allisonfitchett@brethertons.co.uk.
