Wanstalls Solicitors

The Personal Injury World is Changing – Post 3

In a previous blog I looked at the changes in relation to the recoverability of the success fee in a conditional fee agreement (no win no fee agreement). This blog looks at how the new changes that come into legislation in April 2013 will affect how personal injury claims are funded now and in the future. The blog post is quite complicated so if you have any questions, please do give me a call. By claiming through Wanstalls rather than your insurance company we can explain all of this to you and advise you on the best personal course of action for you.

Conditional Fee Agreements – The current “No win, No Fee” Arrangements

Currently, a conditional fee agreement (CFA) protects the client from having to pay their own solicitors costs in the event of their claim being unsuccessful. For this reason CFA’s are best known by the public as “no win no fee” agreements.

No Win, No Fee agreements cover the claimants costs but what it doesn’t cover is the other parties costs if the claim is unsuccessful. This in most cases is not important as most personal injury cases are dealt with by the insurance company and therefore there are no external costs.

However, if court proceedings have been issued and served then the other party will have costs that need to be covered. The sums involved could be very considerable if the case has gone all the way to a trial and then been lost.

The other thing that a CFA does not protect against are the client’s own disbursements. Disbursements are payments that a solicitor makes to other parties on behalf of their client and will include such things as medical report fees, barristers fees and court fees. In an unsuccessful claim the client could be responsible for paying the disbursements which cannot be recovered from the other side.

After the event Insurance Policy – Client Peace of Mind

To protect the client from the risk of having to pay the other sides costs and their own disbursement there are insurance products available. These policies are called after the event insurance (ATE) policies and are taken out by your solicitor to ensure the claim does not cost the claimant should they win or lose.

ATE insurance policies are carefully designed so that the client does not have to pay the premium and with most ATE policies the premium does not have to be paid till the end of the case.

At the moment if the case is successful then the other side has to pay the premium for the ATE policy as part of the costs recovered from them.

If the claim is unsuccessful and it is necessary to claim on the policy to recover either the client’s disbursements or the other side’s costs then most ATE policies also cover the premium. In other words in an unsuccessful personal injury case the policy also covers the premium so that the client even in an unsuccessful case does not have to pay the premium.

The policies can operate this way as ATE insurance is generally taken out at the beginning of the case when the conditional fee agreement is first signed. As the majority of personal injury claims are successful most premiums are recovered from the other side. This enables the insurers to take the risk of having to cover the premiums in unsuccessful cases.

The key to the whole system of ATE insurance is the fact that the other side has to pay the premium in successful cases. It is this that is due to change with the legislation that comes into effect in April 2013.

How is this going to change in April 2013?

When the legislation comes into effect the other side will no longer be required to pay the ATE insurance premium even in a successful case. This will mean that if a clients CFA is to be protected by insurance then the client will be responsible for the premium. The cost of ATE premiums can be considerable ranging from a few hundred pounds to several thousand depending on the type of claim to be insured.

It is likely that the insurers who provide ATE insurance will have to look at their products and it may well be that cheaper premiums will become available. However, the cost of ATE insurance will undoubtedly be a cost that a client will have to pay.

If the ATE premium is not payable till the end of the case and only payable in successful cases the client may have to pay the premium out of their damages which might make a significant dent in what they receive.

This is one of the changes in the law relating to personal injury claims that will potentially bring an end to the current situation where most claims are pursued at no risk of cost to the client where the client receives their damages in full.

There are other changes that impact on the area of ATE insurance but I will deal with these in a subsequent blog as they are complex and will require yet another lengthy blog.

Ian Wanstall

Why should I ring Wanstalls Solicitors before my insurance company?

You may have noticed that many firms of solicitors who deal with road traffic accidents recommend that in the event of a road traffic accident you should call the solicitor before your own insurers. At Wanstalls we give the same advice to prospective clients but why?

In this country the automatic reaction of most people involved in a road traffic accident is to call their own insurance company. If you have fully comprehensive insurance your own insurers will arrange for the repairs to your car, they may provide a replacement vehicle and if you have been injured they will want to refer your personal injury claim to their own chosen solicitors.

If the accident was your fault then the only choice that you will have is to get your own insurers to deal with the repairs to your car or pay you the value of your car if it is written off.

If the accident was not your fault then by calling your own insurers you are quite likely to have to pay your excess when your car is repaired or it will be deducted from the amount you receive for your car if it is written off. Until the cost of repairs or the value of the vehicle is recovered from the other driver’s insurers then your no claims discount will be affected unless it is protected.

By contrast if you call Wanstalls first after your accident we can advise you straight away on the options available to you. Only one of which is to contact your own insurers.

If the accident is quite clearly not your fault then one option that might be best for you is for Wanstalls to contact the other driver’s insurers and get them to deal with the repairs to your car or pay the value should your car be a write off. If the other driver’s insurers can see that their insured is clearly at fault then they will usually be very happy to deal with getting your car repaired.

The other driver’s insurers will also be very keen to provide you with a replacement vehicle as this will enable them to control the cost of providing a replacement rather than running the risk of the replacement being provided by another company which would cost them more.

I have helped many client’s in this way by contacting the other driver’s insurers and arranging repair of my client’s car and a replacement vehicle either immediately after the accident if the car is undriveable or while the car is away being repaired. In this way my client has not had to pay their excess nor has there been any affect on their no claims discount as they have not made a claim on their own insurance.

Many solicitors also have contacts with accident management companies who represent a third option. An accident management company can arrange vehicle replacement and repairs to the vehicle recovering the cost of the vehicle and the repairs form the at fault driver’s insurers. Again the client does not have to pay their excess and their no claims discount is not affected.

Your own insurers will be very keen to deal with your personal injury claim by referring it to their own chosen solicitors. The reason for this is that they will receive a substantial referral fee from the solicitors they refer your case too. The solicitors that your claim is referred too may be anywhere in the country and invariably will be one of the very large firms where your claim will be handled by an unqualified junior member of staff.

By calling Wanstalls first you are making your own choice of solicitor and can benefit from having your claim handled by an experienced solicitor where communication between you and the person dealing with your claim will be much better.

Wanstalls will discuss with you what is the best option for you to get your car back on the road with the minimum of inconvenience and without paying your excess or causing problems with your no claims discount.

There is an obligation to report your accident to your own insurance company but we will advise you on this as you may only need to report it for “information purposes only” once we have agreed with you the best course of action for you.

The bottom line is that by calling Wanstalls first you have access to a range of choices and an experienced solicitor to advise you on what the choices are and the best way forward for you.

Call us first after your road traffic accident as we will advise you without charge or obligation on the best way forward for you.

Ian Wanstall – Contact me at ian.wanstall@wanstalls.co.uk

Wanstalls Solicitors are based in County Durham in the North East of England. We represent clients both locally and nationwide and offer a friendly personalised service. If you would like to discuss any aspect of a personal injury claim, we would be delighted to hear from you.