A survey has revealed that the 10% uplift awarded on damages in personal injury claims is not enough to cover the additional costs that LASPO has forced claimants to meet.
From the 1st of April 2013, claimants were told that they would now be required to cover their own legal costs, rather than the defendants who caused them to seek legal proceedings in the first place but the ‘good news’ was that they would receive 10% more on top of their awarded damages.
This was supposed to act as a sweetener and to help them cover their legal bills but a recent survey carried out among personal injury specialist solicitors has exposed the 10% uplift as being insufficient to cover the additional costs.
The survey was carried out late last year by MSS for legal expenses insurer ARAG, inviting 100 senior solicitors from within the profession to give their view on how the reforms were taking shape and the results were unsurprising.
Nearly three quarters of those claimants solicitors asked revealed that the uplift did not cover the additional legal costs while just 11% thought they were routinely securing the additional uplift on all successful cases, with only one solicitor declaring that the 10% covered the extra cost of ATE premiums and success fees.
In addition to this, almost two thirds of claimants solicitors disagreed with the view former FOIL President, Andrew Parker, that the Jackson reforms had improved access to justice.
Scott Rees and Co partner, David Byrne, claimed that the time has come for a proper review of the Jackson Reforms and LASPO. He said: “The purpose of compensation and the whole claims system is to return the victim, who has been wronged by the defendant, as close to the way they lived their lives before the accident.”
“Clearly this is no longer happening since the introduction of the reforms as claimants are not getting the compensation they firstly are entitled to and secondly need in order to cover the cost of their recovery and rehabilitation.”
“There has been a lot of noise from the insurance industry on how we should bring in a care base compensation program for injuries such as whiplash. The problem with this is that it shows complete ignorance for additional costs incurred by an injury, such as loss of earnings.”
“The balance has clearly swung in the favour of the defendant which is ludicrous when you think the only reason that the victim is in court in the first place is because of their negligence.”
“A review of the reforms is clearly what is required moving forward as is action to ensure that the victim doesn’t continue to lose out altogether while the guilty party gets off lightly.”
These words mirrored those of ARAG’s, Head of ATE, Paul Hurley’s who was quoted by the Litigations Futures website to say: “With legal aid only available in exceptional cases, ATE insurance is the only recognised form of protection that can safeguard the claimant against adverse costs in pursuing a claim, and so the cost of premium should be recoverable from the losing party.”