What exactly are no win no fee arrangements and why is there such a hoo-hah about Lord Justice Jackson’s recommendations to change the system?
Before the introduction of the no win no fee system in 1995, people wanting to make a personal injury claim had three choices. They could apply for legal aid if they were on a low income, they could get support from their union if they were a member or they could pay their own legal fees.
The idea behind no win no fee is that the defendant, rather than the victim, pays the personal injury solicitors costs when a judge rules against him.
This system works well for people who want to make a claim for personal injury compensation because they know they will not be stuck with a huge bill regardless of the outcome of the case.
However, last year Lord Justice Jackson recommended that all that should change. Jackson believes that it’s unfair for defendants or their insurance company to pay these success fees. Instead, he wants to see the system go back to the old way whereby the claimant pays the costs. To compensate for this, damage awards would be increased by 10% and success fees capped at 25%.
Jackson believes his recommendations would put an end to the compensation culture that is so prevalent in the UK at the moment but opponents of the new proposals say they will deny access to justice for many lower-income families. The argument is likely to rage on for awhile to come…