3 OCTOBER 2011

PUBLIC BILL COMMITTEE TO SCRUTINISE BILL IN OCTOBER

The Public Bill Committee will meet on the 11th October to scrutinise proposed legislation which is set to have a massive impact on people seeking compensation after being involved in an accident.

Under the Ministry of Justice's Legal Aid Sentencing and Punishment of Offenders' Bill, No Win No Fee agreements, also known as Conditional Fee Agreements, will not exist in their current format.

Claimant's ability to recover insurance premiums which are part of Conditional Fee Agreements as well as their own solicitor's success fee from the losing defendant will no longer be possible. Instead, these costs will have to be paid out of any final award for damages and could amount to as much as 25 per cent; damages will be increased by 10 per cent to accommodate this. 

The Public Bill Committee is also expected to report to the House of Commons on 13th October.

Scrutiny of the bill comes as the parents of murdered school girl Milly Dowler met with David Cameron to voice their objections to the proposals. According to newspaper reports, they told the Prime Minister that they were only able to sue the News of the World over the phone-hacking scandal because they did not have to pay for the After the Event insurance.

The planned reforms have attracted widespread criticism and have raised concerns that many potential claimants may simply find that there is no viable route for them to seek justice and compensation.

It is expected that those who do pursue claims are more likely to look at how solicitors structure their costs rather than the quality of service they are likely to receive. It is also expected that solicitors will be less likely to take on lower value claims or high risk claims.

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