The “No Win, No Fee” system began in 1995 when the advertisement of legal services and referral fees were prohibited, so the public were under no illusion that they would be entitled to 100 per cent of the compensation. This all changed in 1999, when the Labour government decreed that the burden of litigation would be transferred from the person making the claim to the defendant.
This is now effectively reversed following new legislation that came into effect on 1 April 2013. Now however, advertising generates claims and the public is largely still under the assumption that they will receive 100 per cent compensation for a successful claim. This is simply not the case.
As illustrated by Express Solicitors in this diagram, a victim of negligence suffering two fractured wrists, a lacerated elbow and severe lower back pain could now receive £8,250 as opposed to the £7,500 that they might have received under the old system.
However, whereas a claimant receiving £7,500 would have received exactly that prior to April 2013, now they receive £8,250 less the 25 per cent of the total for legal costs, giving them only £6187.
Certainly, this new legislation will save the insurance industry a lot of money, but this comes arguably at the expense of those with genuine claims and who have been seriously injured, and who will now not only be made to be pay for litigation but for costly medical assessments as well.
Of course, not all of those making personal injury claims are completely honest, and unfortunately there are also perhaps a number of unscrupulous law firms that encourage this type of behaviour.
However, companies such as the aforementioned Express Solicitors make it their business to ensure that they take on genuine cases.