Nearly three years on from LASPO – time for an increase in claims?

On April 1 2013 the rules changed in relation to claimant funding and success fees in personal injury claims. Most notably, claimants who entered into a conditional fee agreement (CFA) on or after 1 April 2013 would not be entitled to claim a success fee or payment of any after-the-event (ATE) premium from the defendant. This has resulted in the majority of claimants having to pay the success fee and ATE premium to their solicitor from their own damages.

These changes were been brought about by sections 44 and 46 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 and the Conditional Fee Agreements Order 2013.

Many claimant firms made a concerted effort to sign up their clients to a CFA before April 2013 and take advantage of the success fee being payable by the paying party. We now approach the third anniversary of the April 2013 changes which ties in with limitation for many of the personal injury (PI) claims. We are already noting an increase in the number of older cases being reopened and proceedings being commenced.

As a result of this, clients should anticipate a potential increase in the litigation rate across the board for motor PI cases as claimant solicitors seek to maximise their potential costs from the previous regime. In addition, solicitors are resurrecting old cases and are making low part 36 offers in order to try to secure a settlement from insurers with higher costs payable.

The Hill Dickinson counter fraud unit anticipated the implementation of such tactics by claimant solicitors some months ago as part of our strategic review and advance strategy committee discussions. Having set down and implemented a defendant strategy, we are using both our knowledge of the opponents’ representatives acquired as part of our ‘Know your Opponent’ strategy and our general counterfraud procedures in resisting these claims.

We will be checking that the funding arrangements have been implemented correctly where claims are funded by way of ATE insurance or are subject to the old regime CFAs that attract a success fee. We suspect that many would have been entered into hastily and may have an improper retainer in place which leaves an avenue for challenge.

Over the course of the next few months we envisage more claims being issued and then served, as they may be issued prior to the end of April 2016 and then served within four months of the issue date. This will leave many of these claims open to technical challenge as well as the regular defences that are used when claimants serve a claim defectively or fall foul of some other requirement of the Civil Procedure Rules.

Clients should be aware of this in the coming months and we will continue to monitor the litigation to see whether any particular trends can be observed. If you have any questions in the meantime then please do not hesitate to contact us.