In an effort to cut down on so-called “frivolous” personal injury compensation cases, the Coalition government has been considering reforming the highly prevalent “no win, no fee” system used by lawyers who litigate injury cases in the UK.
Justice Secretary Ken Clarke recently announced his intention to enact the reforms on the personal injury solicitor community after acting on Lord Justice Jackson’s report which first proposed them in January of this year.
Under the current regulations, claimants that are successful in a “no win, no fee” case are permitted to retain the entire compensation reward since their lawyers claim costs from their losing adversaries.
As originally proposed by Lord Justice Jackson, and supported by Mr Clarke, the new system would see legal fees recovered instead from the damages that are awarded to their clients by the courts. The system is based very closely on the model used in the US in regards to legal fees.
In a recent interview on Law in Action on BBC Radio 4, Mr Clarke stated that regardless of whether or not any given claim is frivolous, there should never be a situation where the most sensible and cost-effective action for any given defendant is to settle out of court in order to avoid mounting legal costs that could potentially financially cripple a legal firm.
A spokesman for the Ministry of Justice did recently confirm that the Coalition government was taking the reform recommendations into full consideration. The spokesman also stated that the Ministry will be consulting very soon on how conditional fee arrangements such as “no win, no fee” arrangements can be improved to prevent and discourage frivolous lawsuits.
Many industry experts are quick to point out the irony of adopting an American standard in regards to fee structuring since a large majority of detractors look to the US as the originator of frivolous lawsuits on a global scale.