Is a Reduction of Solicitors Costs in the Interests of the General Public?
As mentioned above, the new MoJ streamlined process came into force in April 2010 which had the effect of fixing solicitors fees no matter the length and complexity of the claim, providing the Claimant solicitor does not believe the claimants damages are likely to exceed £10,000.
The Ministry of Justice (MoJ) is now deliberating whether to extend this scheme to include higher value RTA PI claims of up to £25,000 or even £50,000. It is suggested that a £25,000 limit would capture about 90% of RTA PI claims: a £50,000 limit, 95%.
There is an argument that should, as Jack Straw has advocated, solicitors’ fixed costs for such claims be reduced further that mid-value claims would ‘simply not be financially viable for solicitors to run’. Indeed it is naïve to think that the cutting of fixed solicitors fees will get rid of whiplash claims, as the government seems to hope it will. It is more likely that straightforward whiplash claims and other such straightforward low value claims where a quick settlement is likely to be reached will be the only type of claim that is financially viable for solicitors to run. A lower fixed fee may discourage a solicitor from entering into lengthy negotiations with an insurer. In essence such a reform would create a market where a solicitor would be more likely inclined to accept the first offer put forward by an insurer, which is obviously against the best interests of the client and therefore a clear denial of the Access to Justice principle.
Ironically, given the government’s determination to drive down the number of whiplash claims, such claims may increase as solicitors are encouraged to source increased volume work in order to make the profession cost effective. Such claims would likely be run by unqualified, low paid paralegals whom would undoubtedly provide an inferior service to their clients and whom would be less likely to achieve appropriate an appropriate level of settlement. Importantly, it is likely they would be less able to identify cases of fraudulent claiming which is obviously a waste of time and money for all parties concerned.
For more information you can contact Jonathan Lavery on 0800 310 2222