With the news that Lord Justice Jackson’s recommendations for small value road traffic accident injury claims are going to be implemented in England & Wales on the 30th April 2010, questions must be asked as to whether his recommendations are driving UK road users further down the path of US litigation methods.

Until 2001, if you had been injured in a road traffic accident (RTA) you simply made arrangements with a Solicitor to obtain compensation on your behalf. The question of costs was very rarely mentioned as it was an unspoken truth that the Solicitors expected to recover their costs in full from the negligent driver’s insurance company.

When Lord Woolf reformed the framework surrounding compensation claims in 2001, the system of No Win No Fee (NWNF) was introduced, which in theory allowed claimants to bring claims without the fear of accumulating large legal costs bills if they lost the claim, thus providing access to justice to individuals who previously may have been put off from claiming.

This access to justice was protected by the issuing of what was known as After the Event Insurance (ATE), an insurance policy that guaranteed that the legal costs would be paid in the event of the claim not succeeding.

In legal circles this type of arrangement is governed by a Conditional Fee Agreement (CFA) which in layman’s terms basically means, that the lawyer agrees to take the clients case on, work for free for the duration of the claim, irrespective of the length of the case, before ultimately getting paid their costs on a fixed fee regime, with the possibility of achieving a success fee, if indeed the claim succeeded (therefore the fees are paid conditional upon success in the case!).

Quite were this system of accessing legal services and obtaining compensation came from is a bit of a mystery now in 2010, although I’m sure that at the time it made some sense. In any event the system was introduced and has been utilised for 9 years until now, albeit utilised in what can only be described as a battlefield, as claimant lawyers and insurance lawyers have knocked lumps out of each other arguing as to the rights and wrongs of the system.

This battle has raged for 9 years and has now led to a further change in the legal framework surrounding these claims, from Conditional Fee Agreements (CFA’s) to Contingency Fee Agreements (COFA’s).

In the newly proposed regime, the claimant will now have to commit to giving his lawyer a percentage of his recovered compensation to contribute towards the lawyers costs in the event of a successful claim.

So if £2000 is recovered on a 20% COFA, the lawyer will deduct £200 from the compensation award to contribute towards their costs of acting for the client. This process is widely used throughout the United States and has been for very many years.

via Evolution Legal.

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