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Personal injury claims
[ch 1: pages 26-27]Most personal injury claims must be brought in the civil courts, although where the personal injury (for example, psychiatric injury) is the result of discrimination or harassment under the Equality Act 2010, a claim can be brought in the employment tribunal (see Chapter 7).
Most employers are legally required to insure against liability for injury or disease to their employees related to their work (The Employer’s Liability (Compulsory Insurance) Act 1969).
In April 2013, significant changes were made to the funding of personal injury claims in the civil courts under the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPOA). This Act abolished the “no-win-no-fee” regime that was operated by most personal injury lawyers. Under this regime, claimant lawyers were only paid for their legal representation if their client won their case. To cover the cost and risk of running unsuccessful claims, when a claim succeeded the claimant’s lawyers were allowed to charge the losing party a percentage-based “success fee”, on top of the cost of their work. In claims for work-related injury, the success fee was usually paid by the employer’s insurer.
These rules worked by enabling personal injury claims to be run by specialist lawyers at no cost to the injured client, because the insurers to the party at fault paid all the fees. They enabled people injured at work to afford legal representation for claims against their employer. The LASPOA regime undid this system. It abolished the “success fees” paid by the employer’s insurer. Instead, the injured party must now pay up to 25% of their compensation to their lawyer to fund their legal representation.
The practical impact of these changes has been to reduce access to affordable legal representation for workplace injury or illness, especially for “low-value” or very complex claims. But as Hugh Robertson, senior TUC policy officer for health and safety notes: “Although a claim of £3,000 or £4,000 may be considered to be low value by the government, it is not low value to a cleaner who earns £6 an hour.”
Legal aid has not been available to fund personal injury claims since 2000.
Personal injury claims in the small claims court
In the small claims court, each side pays their own legal fees, and claimants are usually unrepresented. There is no provision for one side to pay the other’s legal fees, even if the claim is successful.
The small claims court limit for personal injury compensation cases is currently £1,000. The threshold is low because the small claims court is designed for minor injuries that cause only short absences from work. The government has, however, announced that it will shortly be raising the small claims personal injury limit to:
• £5,000 for all road traffic accident (RTA) claims for personal injury – including work-related vehicle accidents; and
• £2,000 for all other types of personal injury claim.
Regulations will be needed to bring these changes into effect. As Law at Work goes to press, the timetable for the regulations has not yet been announced.
The government made the case for these changes by publicising the need to crack down on fraudulent road traffic accident claims for “whiplash”. This was misleading, since these changes impact on all accidents and injuries – including workplace injuries – however caused.
Personal injury claims are often complex and they usually include the need to organise medical evidence. Under the new regime, the employer and insurer will continue to have ready access to their own in-house legal advice and representation, but injured workers will have to fund their own legal fees, instead of these fees being paid by the person who caused their injury. In a claim valued at £2,000, fees are likely to eat up most, if not all the compensation.
The change in the law also challenges the ability of trade unions to fund personal injury claims for their members, which to date have relied on the recovery of legal fees from the insurer in a successful claim. Union solicitors Thompsons estimate that the change will impact on around 95% of personal injury claimants in the UK, whether injured on the roads or at work.