Thursday, September 27, 2012

Big changes are coming to the medical negligence sector in England and Wales

Most people believe that legal aid is the last bastion of hope for people in the UK who need legal help and cannot afford it. That would indeed be a fair assumption to make because legal aid has long since provided an outlet to those on the breadline who deserve justice whether this be for a criminal or civil matter.

In recent years, legal aid has only been available within the personal injury field for claims involving clinical negligence. This takes in a considerable amount of claims involving children, pensioners and those on low incomes who need financial backing to pursue a case against a negligent doctor or healthcare professional.

Unfortunately things are changing as from April 2013 the legal aid system is undergoing radical reform. From next April the Legal Services Commission who manage legal aid funding in England and Wales will become a new entity known as the "Legal Aid Agency". Legal aid will no longer be offered across the board for clinical claims. Instead only a narrow band of claims (for example claims for damages caused by a neurological injury to a baby, resulting in them being severely disabled) will continue to be covered as a clinical negligence case by legal aid.

The Legal Aid Agency unlike its former incarnation can now make profit, this is a hugely radical shift. If a claimant using legal aid is successful the Legal Services Commission will automatically take up to 25% of certain elements of the compensation award. There are some aspects which are ring-fenced but, compensation for pain and suffering is not.

This move will hit people hard as they are faced with losing a percentage of their award to cover some of the most serious claims on the spectrum. But worse still is the fact that many claims will not now get off the ground as people who would otherwise have received legal aid are now scared off by the prospect of No win No fee advice.

Sad times for the industry and for the country.

Friday, September 14, 2012

Admiral make £24.5m per annum on referral fees

Admiral, the well known UK insurer recently confirmed it rakes in £24.5 million in fees from solicitors who buy personal injury referrals from their vast accident network. This astonishing sum amounted to 25% of their revenues for 2011.

Now given that referral fees are being banned from April 2013 in the personal injury field, what will become of Admirals hugely profitable referral mechanism..? The answer is that they will no doubt set themselves up as an ABS and develop an offshoot law firm. Rather incongruous circular arrangement when you consider there might be thousands of passengers suing negligent Admiral drivers via their own network at some point in the future. 

The lie that the insurer lobbyists propagate is that they do not fuel the so called "compensation culture" by selling leads en-masse for profit. The fact that Admiral have published such huge figures underlines how crucial PI referrals are to big insurers.

But times will soon be changing and it will be interesting to see how the insurer market reacts.