The changes to Legal Aid, Sentencing and Punishment Act 2012 would affect the funding of claims

by duncan12 on October 19, 2012

The Legal Aid, Sentencing and Punishment Act 2012 is a legislation which would have a cascading impact on professional negligence claimants says experts in the field.

According to leading professional negligence solicitors the changes being introduced by the Act coming into force from next April would have deep impact on the way such claims could be funded.

Claims against professionals for negligence such as a solicitor, accountant, architect or a doctor would change. Until now solicitors were entering into Conditional Fee Agreements or no win no fee agreements with clients to fight their cases. Solicitors were taking the risk of getting paid only if they won. They are paid their fees and a success fee which can be recovered from the negligent professionals insurers.

In addition, solicitors routinely obtain what is called “after the event insurance”. This is a policy that will pay the other side’s costs if the claim is unsuccessful. The premium for this insurance could be claimed from the losing party.

The combination of insurance and the no win no fee agreements have helped level the playing field in claims against insurers, who inevitably have massive resources to deploy against these types of claim.

But from April 1, 2013, the Legal Aid, Sentencing and Punishment Act will change the landscape of professional negligence work. On any insurance policy or conditional fee agreement entered after that date, the insurance premium and success fee cannot be recovered from the losing party. In other words, the claimant has to meet these liabilities which could be significant costs.

Without insurance many claimants would have second thoughts of taking a risk of litigation. The insurance industry would see this change to in the law to be choking claims against negligent professionals.

The advice by the negligence professional lawyers to those claimants is that it would be crucial for them to claim any negligence claims well in advance and contact their solicitors before April 1, 2013. It is also important to ensure that they get an insurance policy and enter a conditional fee agreement before the cut off date to get the best chance of securing a just result in their claims.

All those claimants should seek professional advice before they act on this, as circumstance of individual claims could be different and this article should be taken only as information and not a professional advice.

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