Would Labour really rescind the Jackson Reforms if they gained power?

July 1, 2013

There have been many criticisms of the reforms imposed following the Jackson review of the Personal Injury system in the UK.

Not least by solicitors themselves, many of whom had welcomed the opportunity to utilise their legal qualifications where there was otherwise little hope of doing so in order to help members of the public claim due compensation upon falling victim of accidents that weren’t their fault.

The capping of fees claimable by solicitors has made both sides now think twice about approaching a claim. Andy Slaughter, a former barrister himself, branded the volumes of changes adopted by the Government “foolhardy”.

Moreover, should the Labour party gain control at the next election, there was no small hint that some of the reforms would be rescinded should Slaughter assume the role of Justice Minister proper.

Too early to judge whether Jackson reforms will work

The Shadow Justice Minister did concede that it was far too early to judge the changes given that they’re only just coming to the end of their first quarter as law.

However, he did question whether, if the personal injury sector itself was struggling to cope with so many new challenges, how the public were supposed to understand the raft of changes.

Solicitors fees have been capped for small claims; that’s the biggest chagrin that both the public and personal injury solicitors have in light of the Jackson Reforms taking effect.

For law firms that have adapted their business model to operate on a no win, no fee basis, there’s had to be a sharp rethink of tactics.

Whereas prior to the reforms, fees were recovered from the losing party, solicitors’ fees are now detracted from the successful plaintiff’s compensation award.

The bar for the amount of compensation that can be awarded has been raised by 10% to accommodate the solicitor’s fees being detracted from any award.

Damages Based Agreement could mean less compensation going to claimant

However, with personal injury claimants having to agree a percentage payable to their representative solicitor under the Damages Based Agreement protocol subsequently imposed, they stand to win less compensation as this fee can be set up to a maximum of a quarter of the total award.

It’s likely that this will be the course of action, too. With victims having to pass on some of their compensation claim to the solicitor, many may think twice about taking a small claim to court.

The nett effect will be personal injury solicitors having to take a bigger percentage from successful claimants simply to maintain their income in light of a reduced number of cases making it to court.

Whereas the solicitor was guaranteed £1,200 fee from the at fault party in a personal injury claim prior to the Jackson Reforms’ implementation – and it’s highly unlikely they’d take on a case in such circumstances if the outcome wasn’t a nailed on cert – the fee is now capped at £500 for a small claim.

Is this the end of the no win, no fee claim culture?

As Andy Slaughter alluded, it’s too early to tell the long-term impact of the reforms. But if it was the government’s plan to make small claims ‘more hassle than they’re worth’, rather than look at ways of dissuading fraudulent claimants from pursuing compensation, it looks like they could well succeed.

What the reforms have failed to take into account is that those making spurious claims really have nothing to lose, having suffered no personal injury in the first instance.

It’s these crooks more likely to persist with a claim than genuine victims, which makes a mockery of the entire process. Changes adopted since the reform will neither attack the root cause of the UK’s ‘compensation culture’ nor ensure that those who warrant compensation actually get it.