New 'no win no fee' rule changes could damage the relationship between solicitor and claimant

Posted: 28/02/2013

New legislation coming into effect on 1 April could deny proper access to justice for people with genuine injury or medical negligence claims. Philippa Luscombe looks at how these changes could cause problems between solicitors and their clients.

Until 1 April 2013, if you have been injured in an accident or suffered from the potentially devastating effects of medical negligence following surgery or treatment, you can bring a claim at no personal cost under a ‘no win no fee’ agreement. This means that you, the claimant, do not have to pay anything - whatever the outcome – and, if unsuccessful, your lawyers receive no fees. If they win your case, most of their costs, fees and insurance premium are met by the defendant (the hospital, doctor or person responsible for your accident).

The system balances itself out because the success fees paid for the winning cases are paid by the losing defendants so that you and your lawyer can work together towards the best possible outcome and, if you win, you keep every penny of your damages.

While there is little sympathy with people such as the three scaffolders who tried to claim £70,000 in compensation after a council van collided with their lorry - at one mile an hour - or the ‘ambulance chasing’ lawyers who fight for them, only a very small proportion of today's cases are due to the accident victim's lack of common sense. The vast majority of claims are perfectly legitimate and are caused by the serious negligence of an individual or business.

The types of claims that I see as a lawyer are much more like this. You go into hospital for routine abdominal surgery. You sign the consent form and it is mentioned that there is a small risk of vessel or organ damage during the ‘keyhole’ procedure. During the procedure, the bowel is damaged but the surgeon doesn’t notice. After the operation, you are in pain and feel sick. The staff are busy and don’t listen to you.

Two days later you deteriorate rapidly, are rushed back into theatre and undergo extensive emergency surgery. You are in hospital for three weeks and off work for six months. Your employer can’t afford to pay you after a few weeks so you have to take a payment holiday on the mortgage and use your savings. You are told you need another procedure now and one in the future because of issues with wound healing.

Would you now consider a claim? Not because you are vindictive or out to make a quick buck but because, instead of 36 hours in hospital and back at work in a week, you have been off work for six months, are still not recovered and are getting into financial difficulty.

Before 1 April, a medical negligence lawyer will tell you that you can recover all of your loss of earnings including for the help you have had to pay for at home to look after your family, possibly for the extra mortgage interest, a sum for your injury and that, rather than being on a waiting list and going back to the same hospital for the further surgery, you can claim for the cost of having that done privately by a specialist.

All change after 1 April

But this will all change after 1 April when the new legislation comes into effect. All claimants will have to take some risk and pay towards their legal costs, meaning that the recovery of costs in successful claims will be significantly reduced. Not only does this seem fundamentally wrong - why should compensation be spent on fees which wouldn’t have been required but for negligence? – but claimants with difficult or low value cases could well struggle to find solicitors who will take the risk of losing.

It is likely that claimants will face two different approaches. The first group of solicitors will still be willing to work without charge but they will encourage claimants to accept the first offer from the other side in order to secure recovery of some costs rather than holding out for a fair settlement.

The second group will be solicitors who recognise that, to run the case properly and stay in business, they have to charge some costs and run the risk of being perceived as greedy by claimants who have not heard about the legal changes and do not expect to pay out any of their damages on legal costs.

Either way, solicitors will be caught between a rock and a hard place and will face difficult business decisions over which cases to accept. They will probably have to turn away people with difficult cases that they would have previously helped and will face potential conflicts when poor offers to settle are made and the costs become disproportionate to the likely amount of the damages that their client will receive.

It will be crucial that solicitors clearly explain the costs position at the outset and are candid about where their interests are aligned with the claimant and where there may be conflict. Claimants need to find specialist solicitors who are accredited by the Law Society personal injury or clinical negligence panels, the Association of Personal Injury Lawyers (APIL), or Action against Medical Accidents (AvMa) and may have to choose between paying nothing - and possibly receiving a low settlement - or paying something by way of legal costs but ending up with a better settlement.