Legal firms prepare for job cuts as civil litigation reforms draw near

This article was published on: 01/10/13

The logo for the Association of Personal Injury Lawyers (APIL)

Nearly three quarters of personal injury firms are planning to cut their staff numbers due to the government’s civil litigation reforms.

In response to the government’s proposals to reduce fixed recoverable costs (FRC), the Association of Personal Injury Lawyers (APIL) carried out a survey of 155 personal injury firms.

The findings have found that one in six of the solicitor firms said they would stop doing personal injury work under £25,000 altogether if the proposals are carried out while 118 firms revealed that they were already planning to cut their workforce this year.

The lowering of FRCs would mean those cases of apparently lesser worth, such as whiplash claims, would become financially untenable for many solicitors. Without the facility to reclaim costs, it simply would not be worthwhile for solicitors to take on these cases, leaving the genuine claimant, who has been injured at the hands of another, without the access to justice they are entitled to.

This is something that the lobby group the Consumer Justice Alliance hopes can be avoided. Chairman, Nigel Muers Raby said: “Lord Dyson, Master of the Rolls and Head of Civil Justice, has said that he does not want the changes to the civil justice system to deny access to justice. However, the government must recognise that any attempt to reduce fixed recoverable costs associated with Road Traffic Accident (RTA) cases would likely result in such cases becoming commercially unviable, leaving consumers finding themselves unable to find legal support following an accident.”

APIL has also pointed out in their response to the consultation, that the government has no evidence that a £700 cut in costs would be balanced out by firms not paying for referral fees and more to the argument, more than half of personal injury firms do not even pay referral fees and would see no savings from the ban at all.

The response said: “The government continues to draw conclusion about the link between referral fees and lawyers’ cost which are illogical and flawed.”

The consultation closed on January 4th and there is now an uncertain wait regarding a response as it not clear how long this will take but it is possible that the new fees could be in place in time for the implementation of the Jackson reforms on the 1st of April, despite plans for the extension of the RTA Portal being postponed, without being rescheduled.

Image source(s)

1. APIL;