How will Clarke’s reforms affect personal injury victims?

Kenneth Clarke is going to crackdown hard on ambulance chasing personal injury solicitors as well as reducing the UK’s legal aid bill by hundreds of millions of pounds.

He will also end the practice whereby losing defendants in personal injury claims are left with crippling legal bills. Under the present system, losing defendants have to pay a ‘success fee’ on behalf of the winning solicitor, as well as an insurance premium. Many parties have been encouraged to seek an out-of-court settlement rather than face the astronomical cost of losing in court.

Mr Clarke would rather see people who win ‘no win no fee’ cases paying their own solicitor’s fees out of their personal injury compensation award. The government believes such a move would cut down on the amount of purely speculative claims that end up in court.

Under the new regime, 25% of an accident victim’s award would go towards the costs of his solicitor. Clarke will also put a stop to the practice of taking out insurance policies to protect against paying costs in the case of a court loss.

When Mr Clarke first mentioned the changes last year, he said it was ridiculous to have a situation where defendants settle up out of court in frivolous cases just to avoid mounting legal costs.

Not surprisingly, personal injury lawyers are opposed to the cuts. Emma Costin from Simpson Millar pointed out that many people with valid claims will not proceed because they are concerned about future cost liability.

The Justice Secretary’s plans are due to be published either today or on Monday.

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