Drivers benefit after lawyers agree to cut fees

From The Times

DRIVERS will benefit from a deal that cuts the fees for lawyers acting for victims of road traffic accidents.

Lawyers have agreed to cap charges under a new “fixed fees” scale for the thousands of road accident claims of up to £10,000 that are made each year. The deal will end the war between personal injury lawyers and the insurance industry after fees rose by half over 18 months.

In cases that are settled before legal proceedings begin, there will be a basic charge of £1,400, compared with the present average of £3,000.

Solicitors will be paid on a sliding scale, so that they would receive £1,000 for a case settling for £1,000; £1,200 for a case settling for £2,000; and £1,950 for a case that is settled for £6,000.

They have traded higher fees in exchange for certainty over costs and speed of settlement, which will improve cash flow and end time-consuming court battles over what they should be paid.

Accident victims will receive damages more quickly: up to 200,000 claims have been delayed in the system during the past two years by technical legal challenges in the courts over costs.

The deal could save millions of pounds a year for the insurance industry. Had the deal not been agreed, motorists’ insurance premiums would have had to rise exponentially to fund the “costs war” between claimants’ solicitors and the insurers.

The new deal has been brokered by the Civil Justice Council under the chairmanship of the Master of the Rolls, Lord Phillips of Worth Matravers, who is Head of Civil Justice. On several occasions Lord Phillips has condemned the costs inflation. He said last year: “Litigation about costs is not by and large devoted to the interests of the client.” It was “unproductive and a terrible waste of money” and a “very considerable blot on our civil justice system”. The costs war began after the Access to Justice Act 2000 came into force, clearing the way for “no-win, no-fee” work.

Solicitors are able to charge an “uplift” or “success fee” on top of their normal fees in “no-win, no-fee” cases. But the insurance industry resented paying the extra fees.