New claims calculator highlights impact of success fees
It is now very clear that George Osborne’s recent Autumn Statement is set to have a huge impact on personal injury solicitors. By raising the personal injury small claims limit and removing the right to general damages for whiplash, a large volume of lower-value PI work may no longer be worth handling through more traditional models.
Smart firms will be seeking both better sources of work and more cost-effective solutions for handling that work.
With innovation in consumer marketing likely to be a key element determining the survival of PI firms, now may be the best time to revisit the consumer-focused objectives of LASPO.
Quittance Personal Injury’s recently developed Calculator aims to do this by promoting the services of innovative solicitors and empowering consumers.
Following LASPO, personal injury solicitors can no longer recover success fees from defendants. Claimants funding a claim with a conditional fee agreement now typically agree to success fees deductions equating to 25% of their compensation settlement or award if the claim is successful.
25% is the maximum success fee allowed by the MOJ and has become a market standard.
In a recent ruling District Judge Lumb, a regional costs judge, noted that “Whilst it is true to say that in the relevant Implementation Lecture Sir Rupert Jackson anticipated that the deregulation of success fees would lead to a competitive market between solicitors to offer the lowest success fees to secure the work, it is equally true to observe that this has not transpired, at least not yet. This may be because the public have not been in a position to make an informed choice to shop around for the best deal.”
When choosing a solicitor potential claimants tend to me more focussed on ‘No Win No Fee’ and less aware of the ‘Win, Fee’ consequences. The levels of success fees and other potential deductions are somewhat opaque in the general marketing of personal injury services.
Judge Lumb added “Until solicitors incorporate within their marketing an intention to be competitive with other firms concerning success fees Sir Rupert Jackson’s aspirational forecast is unlikely to come to pass.”
Quittance Personal Injury have developed a new online compensation calculator that offers clarity around success fees.
Speaking on behalf of Quittance, Chris Salmon said, “Other calculators provide a useful estimate of the level of compensation a claimant can expect to receive for their injury. However, we wanted to develop a tool that would give claimants the whole story – particularly with regard to success fees. The amount of compensation that a claimant gets to keep is the key figure.”
“We are not making a statement about the level of success fees charged by the market per se. Success fees provide the incentive for solicitors to take on more marginal cases. However it is imperative that claimants are empowered to make a more informed decision about their claim.”
The Quittance Compensation Calculator is available here: www.quittance.co.uk/personal-injury-compensation-claims-calculator.