Claimant law firms are seeking to increase their fees from personal injury claims by taking an increasing number of cases to court
The Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Laspo) reforms have resulted in an increase in the number of personal injury cases going to court because the level of damages cannot be agreed within the Ministry of Justice (MoJ) portal process.
In October this year, 3,289 claims reached stage three of the portal and went to court, compared to just 1,654 in October 2013 – a 99% increase (see below).
Furthermore, the October 2014 figures represent a 253% increase on the number of claims that proceeded to court in the same month in 2012 – before the reforms came into force – when only 932 cases went to court over disputed damages.
law firm DWF insurance partner Simon Denyer said that this is a result of claimant law firms seeking to increase their fees in the wake of the cuts made to stage one and two portal fees by the Laspo reforms.
“The number of court packs is very significantly higher than it used to be,” he said. “Some of the behaviour around this is probably influenced by the fact that the claimant lawyers would like a bit more money, and what you get from going to stage three is stage three costs and those were not reduced [as part of Laspo].
“Claimant lawyers on their new retainers are often getting 25% of damages now as well, and that would be another incentive for them to get a bit more on damages.”
“If you put those factors together, that could explain why layers are taking cases to stage three at double the rate they were before,” he added.
The news comes as the latest set of figures from the Claims Portal reveals a 17% increase in the number of claims being registered with the MoJ portal. Subscribers can read a full analysis of what this means for the insurance industry here.