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How will Fixed Fees Affect Accident Claims?

in Legal

Every year, many people fall victim to personal injury caused in one of a variety of ways. This includes injuries sustained at work, outdoors, in public places and on roads among others. In many of these cases, victims of personal injury may be entitled to compensation and can benefit from expert legal assistance from experienced lawyers.

However, from April this year, there could be some radical changes stemming from the controversial injury claim reforms put forward by the government. As part of the plan, which is due to come into force in April 2013, the payment and receipt of referral fees will be banned while recoverable costs for injury lawyers will be dramatically reduced.

Some of the effects of these changes

These plans will result in a number of changes when it comes to accident claims. This includes:

  • Success fees and premiums: In 2000, it was deemed that success fees and premiums could be recovered from the losing party. However, under the new plans, this is reversed and legal costs will come out of the claimant’s damages.
  • Amount of compensation: As a result of the claimant having to foot legal costs from their damages, the amount of compensation that claimants will end up receiving could be seriously affected.
  • Reduction in numbers of claims: The fixed fee system and new reforms could see a reduction in the number of people who make a claim for personal injury. Some may question whether it is worth them making a claim, as they have no idea how much they will receive in compensation but will still have to pay legal costs.
  • Slashed fees for injury solicitors: Under the new system, personal injury solicitors will see their fees slashed, which will have a big impact on the ability of some of these legal services providers to operate profitably and provide valuable personal injury claims services.
  • Difficulties in representation: For those looking to make a claim, the fee structure changes could mean that it becomes more difficult to find legal representation, as fewer lawyers will find it viable to take on cases for dramatically reduced fees.

The changes that are set to take effect from April of this year will come as good news for the insurance industry, as it means a reduction in the payment of legal costs and claims. However, they are likely to equate to a variety of problems and issues for personal injury lawyers and for the many people who may be entitled to compensation following genuine injury, harm and loss of earnings.

It is worth noting that claims made before the new regulations come into force will not be affected, which means that those who are considering making a personal injury claim should act quickly before the new regulations come in.

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