Changes to the personal injury industry

Published: 15/03/2013

After months of scrutiny and debate the personal injury industry is now set to undergo a series of changes, the first poised to be introduced in just a matter of weeks.

The changes originally stem from the Jackson Reforms, a set of recommendation to help extinguish fraudulent claims which are widely believed to be the driving force behind rising insurance premiums.

The first set of changes is scheduled to launch from 1st April 2013 and includes the following:

  • The banning of referral fees
  • Small Claims Limit (non PI) will increase to £10,000
  • Damage based agreements (DBAs) can now be entered into
  • Rule changes to Conditional Fee Agreements
  • After the Event (ATE) insurance will cease.

The second set of changes focuses on RTA Portal fees. From the end of April (we await confirmation of the exact date) portal fees for road traffic accident cases valued between £1,000 and £10,000 will decrease to a maximum £500.

The third set of changes, planned for the end of July, will again centre around the RTA portal; the system expanding to not only accommodate road traffic accident claims worth up to £25,000 but also to now include both employer liability (accidents at work) and public liability (slips, trips and falls in a public place) cases of up to the same changes.

Upon initial proposal of these changes there was great concern from The Law Society and personal injury solicitors surrounding the potential impact could have on law firms for whom, even under the current structure, profit margins are minimal. The changes to the portal fees at the end of April, for example, see a reduction of more than 50% compared to current fixed fees. As a result solicitors may have to consider how they will atone for this financial deficit.

Content correct at time of publication

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