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New rules will affect compensation

It is now only just over a week before first set of reforms, through the Legal Aid, Sentencing and Punishment of Offenders Act 2012 are implemented. 

This will include the introduction of Qualified One-Way Costs Shifting (QOCS) which will see the end of the long running system, whereby the successful party in a case has been able to recover their legal costs in a personal injury claim. 

The move comes into effect on April 1 and is the first set of big changes to the way in which personal injury cases are funded and run, that will be coming in throughout the year. 

In addition, the act will bring an end to referral fees being paid to third parties in personal injury claims. It will also do away with what’s known as After The Event (ATE) insurance – which protects clients from being liable for the other sides legal costs if their case is unsuccessful.  And success fees, which have traditionally been paid to claimant’s solicitors by the losing defendant will no longer be payable by the defendant but by the claimant from their compensation.  

From April 1, anyone who has not already entered into a ‘no win no fee’ agreement will be subject to QOCS. As such, they will therefore not be responsible for paying the defendant’s legal costs if the defendant, being the party against whom the claim is brought and fault is alleged, successfully defeats their claim. 

The defendant will have to bear their own legal costs whether they win or lose, unless they are able to establish to the court that the claimant was “fundamentally dishonest” in their claim.  

In the current system, solicitors put in place a policy of ATE insurance to protect their clients, from having to pay anything if their case is unsuccessful. If they win, the premium for this insurance can, at present, be recovered from the defendant as part of the claimant’s legal costs. 

However, as the defendant will no longer be able to recover their costs in the cases they win, the insurance will no longer be necessary to cover those costs. So the premium will not be recoverable from the defendant, whatever the outcome. 

This is unlikely to be the end of ATE insurance however, as it is also there to protect claimants from having to pay for other fees incurred throughout their claim if they don’t win their case. This could be the cost of commissioning a medical report or to pay court fees. 

It is therefore likely that most solicitors will still recommend that their clients have a policy to protect them for this, as these fees can amount to thousands of pounds. The premium for this will therefore now be paid by the injured party if they win their case and will be deducted from the compensation they are awarded. 

This won’t be the only deduction to successful claimant’s compensation. They may also be required to pay towards their legal costs and the success fee that the defendant is currently required to pay. 

The success fee reflects the risk that solicitors take in pursuing a case which they could ultimately lose and not be paid for. From April 1, this will also be deducted from any compensation awarded. 

It is therefore highly recommended that anyone who has been contemplating making a claim should contact personal injury solicitors such as Harris Fowler immediately, if they want to recover as much of the compensation awarded as possible without the forthcoming deductions. 

Contact Harris Fowler now to start your claim for compensation before 1st April 2013. Free and friendly legal advice is available on 0800 213 214 or visit www.harrisfowler.co.uk

Harris Fowler is a trading name of Harris Fowler Limited and is authorised and regulated by the Solicitors Regulation Authority no. 558271.

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