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How the changes to personal injury law will affect us all

August 13, 2012

The government is bent on changing the way people who have been injured in an accident that was not their fault recover compensation. At this stage, few people outside of the legal and insurance industry are really aware of the consequences.

Accidents can happen to anybody at any time and even the most careful of people can be involved in a collision while driving or slip up or fall over while at work. Despite the ever present threat of an accident, most of us really never think what is likely to happen if they are involved in one that they never bargained for.

The main thrust of the government’s changes mean that the cost of claiming compensation will shift from the person or body at fault to the victim of the accident. For many people who have average incomes the cost may very well mean that it is unacceptably high and therefore not worth trying in the first place.

The changes are not at this stage very coherent and this is partly due to the fact that the arguments have not crystallised within the coalition itself and there is also considerable disagreement about the rights and wrongs of all the changes outside of government.

It might at this stage be worth reiterating the value of any compensation claim to an innocent victim of an accident. Firstly, it helps to repay all those expenses or lost income, which are brought about by the consequences of the accident, while secondly it helps to influence the way in which people act and behave in society.

Employers are more likely to take health and safety issues more seriously when they are liable to pay up for accidents caused by their own negligence. Motorists may drive more carefully when they are liable to lose their no claims bonuses or pay more in insurance. Store keepers or local authorities take the condition of their floors and pavements more seriously when they may have to pay out compensation if somebody slips over on them.

Despite the well known value of the personal injury claims system, the changes in progress seem to take no heed. While the value of compensation claims are relatively low in this country compared to elsewhere in the industrialised world, the changes that will eventuate in April next year will see a further reduction. This is because all claimants will have to pay the legal fees out of the claim rather than the legal fees being paid by the insurer.

The latter will have several consequences. It will mean that victims will have to decide more carefully whether they want to take the case to court as the legal fees if they win may make the whole claim unprofitable. Similarly, changes will mean that solicitors will be able to charge “contingency fees” which would mean even less claim going to the victim.

The legal fees for minor accidents may also be fixed in future and this may mean that many personal injury solicitors may judge a claim that was worth fighting for in the past simply too uneconomic. As the “no win no fee” system will still be kept, every solicitor makes a gamble when it comes to taking on a claim. The stakes simply become more loaded towards the guilty party with changes such as this.

Worst of all are changes in the pipeline which have not yet been passed in parliament. The majority of personal injury claims could end up being heard in the small claims court. This means that it would be the victims themselves who would have to represent themselves without any legal help. They would have to compile witness statements, medical records and technical reports. They would have to fight on their own against an insurance company. It is unlikely that many accident victims, unless they have an absolutely open and shut case or are extremely determined, would even bother to put themselves through this process.

These changes, looked at together, mean a wholesale shift in the personal injury system and one which puts the vast majority of innocent victims of accidents in a worse situation than they have experienced in the recent past.