Civil Justice Reforms

17th May 2013

The government has made changes to personal injury claims as a result of the Legal Aid Sentencing and Punishment of Offenders Act (LASPO) which came into force on 1 April 2013.

 

Success fee

The successful Claimant can no longer recover any success fee from the Defendant. Before the reforms were implemented, the Claimant’s representative could receive a success fee on top of their costs. This would be paid by the Defendant. This success fee would reflect the risk to the Claimant’s representative in taking the case on a conditional fee agreement (no win no fee).

Depending on the terms of the Conditional Fee Agreement (CFA/No Win No Fee), the Claimant may still have to pay a success fee out of the damages he receives. This is capped at 25% of general damages (i.e. injury compensation) and special damages (i.e. out of pocket expenses) that have been incurred at the date of settlement.

 

10% increase on the award of general damages

To compensate the Claimants who have to pay a success fee, they will now be awarded 10% extra in general damages. This will therefore cushion any loss the Claimant makes in relation to paying the success fee.

 

After the Event Legal Expenses Insurance (ATE)

This too is no longer recoverable from the Defendant and has been replaced by Qualified One-Way Costs Shifting (QOCS).

 

Qualified One-Way Costs Shifting (QOCS)

QOCS will operate so that a genuine, losing claimant will not be at risk of paying the successful defendant’s costs, save in limited circumstances. QOCS aims to remove the need for a claimant to take out and fund an ATE insurance policy – but the claimant will still face costs risks where QOCS is disapplied – for example through failing to beat a defendant’s offer.

QOCS protection will also be lost if:

• the claim is found to be fundamentally dishonest or
• the case has been struck out on the basis of no reasonable cause of action or abuse of the court’s process.