By Finlo Rohrer
BBC News Magazine
It's a decade since no-win no-fee rules were extended to most civil court cases, but what change has the now notorious "conditional fee agreement" brought?
If you've got a television and ever watch it during the day, you'll have seen the adverts.
These feature people falling off ladders, suffering whiplash at traffic lights, slipping on wet floors and other utterly mundane mishaps.
And the message is constant. You can take legal action to right a wrong with very little risk of incurring costs. Just dial an 0800 number to be well on your way to a healthy cheque as well as exacting retribution on a careless employer or branch of government.
It is far from age-old stereotypes of engaging a solicitor where the wronged party's first port of call was a dusty office over a shop.
Conditional fee agreements (CFAs), or no-win no-fee deals, were first allowed for a range of court cases in England and Wales in 1995. Three years later a move was made to extend these to all civil cases, with the exception of action in the family courts.
At the time then-minister Geoff Hoon said: "No-win no-fee conditional agreements will result in better access to justice. Access will be given to the many people who fall between those who are very rich or those who are so poor that they qualify for legal aid.
"In future, the question of whether one gets one's case to court will no longer depend on whether one can afford it, but on whether one's case is a strong one."
Pay the middleman
The 1999 Access to Justice Act, which came into force in April 2000, dramatically increased the attractiveness of no-win no-fee deals as judges could make the losing side shoulder the extra costs associated with conditional fee cases.
These are the "uplift" fees charged by solicitors, an increase on normal fees to compensate for the possibility of loss and therefore no fee, and the insurance premiums paid to protect against the other side's legal costs in the event of defeat.
"Trip and slip" cases get the headlines
And legal aid for personal injury cases was abolished, making a conditional fee agreement many people's only hope of justice.
The changes in the law have prompted a blizzard of negative press stories about the legal industry, particularly in its most reported sector, personal injury.
Headlines like "Legal 'vultures' are making £2m out of the NHS each week" or "Compensation culture is killing equestrianism" or "Compensation culture wrecking small firms" have their effect on the public's imagination.
The suggestion is that grasping lawyers vastly inflate their fees for no-win no-fee cases, leading to a drain on the public purse.
Martin Bare, outgoing president of the Association for Personal Injury Lawyers, denies this. "There is no gravy train. The perception arises because people don't think that for the cases that you win, there's another that you lose, for which you get nothing."
Lawyers blame this public perception of the compensation culture at the door of claim management firms. Typically, these are not staffed by solicitors, and instead act as middlemen, passing clients on to lawyers. The changes to the law made it desirable to advertise their services on television.
"That then gave them a model where they could afford to bombard you and me with endless advertisements," says Mr Bare. "That is what makes people believe that there is a compensation culture."
ACCIDENT AND DISEASE CASES
Figures: Compensation Recovery Unit
But the statistics of personal injury claims do not necessarily back up the idea of a compensation culture.
Cases involving accident and disease are notified to the Compensation Recovery Unit of the Department for Work and Pensions, as part of efforts to recoup disability benefit and NHS treatment costs from the party responsible from the injury.
These figures have been relatively stable. The number of cases registered to the unit in 2000/1 was 735,931. The number in 2007/8 was 732,750.
Clinical negligence cases notified to the unit have fallen from 10,890 in 2000/1 to 8,872 in 2007/8. Accidents at work cases have fallen from 97,675 in 2000/1 to 68,497 in 2007/8. Only motor accident claims have risen rapidly, rocketing from 403,892 cases in 2004/5 to 551,899 cases in 2007/8.
In its 2006 report on the "compensation culture", the House of Commons Constitutional Affairs Committee heard evidence that personal injury claims had gone up from about 250,000 in the early 1970s to the current level, but that the introduction of no-win no-fee had coincided with this levelling off.
Lawyers dispute that no-win no-fee inevitably leads to more frivolous claims and more cases generally. They say the solicitor acts as a filter, knowing that every case that doesn't make it to court or a settlement is a financial loss to the firm.
"Our assessment has to be that the prospects of success are at least 60%," says personal injury lawyer Jeffrey Logan, partner at Liverpool solicitors firm Goodmans, adding that solicitors now have more of an interest in making sure there are no costly delays in a case.
But the negative public image remains, particularly of the category of cases the legal industry calls "trip and slips". Stories of a claimant who has slipped on a petal/grape/banana and is pursuing thousands in compensation are a newspaper staple.
Lawyers think more serious injury cases should be emphasised
Mr Bare says the reader is very rarely offered the full picture. The comedy element is played up, the fractured hips or arms preventing work being done are played down.
But there are those, particularly in the insurance industry, who argue that the real issue is not the number of claimants but a rise in the value of payouts.
"The common perception is that we live in this compensation culture," says Malcolm Tarling, of the Association of British Insurers. "What we have seen in recent years is an increase in the average personal injury award."
Mr Bare puts this down to the million pound payouts given to victims rendered quadriplegic or otherwise seriously affected. He says any rise can be attributed to increased life expectancies being factored into awards for people who will need a lifetime of care and will never earn a salary.
As well as the drain on resources, no-win no-fee has also been blamed for creating a "risk averse" culture where games of conkers are banned, lamp-posts are padded and playgrounds closed.
But the 2006 Compensation Culture report exonerated personal injury litigation and instead blamed risk aversion on "complex causes, including advertising by claims management companies, selective media reporting, a lack of information about how the law works, and on occasion, a lack of common sense amongst those who implement health and safety".
And it's important to remember that for all the cases dismissed by the courts or rejected at an early stage by solicitors, there has still been energy expended in dealing with the initial complaints.
This alone means people are likely to continue to worry about a "have a go" compensation culture.
Send us your comments using the form below.
I can say that in the 26 years I have been a personal injury lawyer, the whole industry and the whole attitude of the public has changed. The perception of a personal injury lawyer is now something below that which a double glazing or photocopier salesmen used to occupy. The whole thing has gone tacky and various claims farmers who scrape the barrel with often fraudulent or exaggerated claims encourage a perhaps deserved perception of the industry or at least part of it.
When I started out I was happy to tell people what I do and be proud of getting compensation for people who undoubtedly derserved it. Now I am not at all so sure. Clients are ruder, have unrealistic expectations and some just exaggerate or lie. There are of course genuine claimants for whom it is joy to act but they are less in number. I would say that every single change in the personal injury business over the last 15 or so years has been a step backward. Costs have not gone down, quality has not gone up, and there have been whole tiers of mouths to feed added into the process who never existed in the past ranging from claims farmers to costs negotiators.
Name withheld, Birmingham
Who gains by promoting an image of a compensation culture? Insurance companies of course who use it as an excuse to raise premiums. If none of us take risks they do not make any payouts. A legitimate experienced PI lawyer will not embark on frivolous claims as they will not be paid for their professional services. Simple as that. The insurance industry spends millions on promoting the image of a compensation culture including forwarding the "grape slip" cases to the press.
Late one night my partner was pulling out of our driveway, on a suburban road, in her car when a motorcyle on the wrong side of the road, collided with her. The rider was found to be drunk, under the influence of drugs, had no insurance, was banned from driving - offences for which he was later convicted. Yet five years later he is still pursuing a claim for the injuries he received that night. There is something wrong with a system that allows someone who contributed so clearly to their own injuries seeking financial compensation.
No-win no-fee is indefensible; it was introduced not to widen access to the courts but to shift cost from the legal aid fund. A legal aid application has to satisfy an independent regulator that there is a reasonable case. No-win no-fee places that judgement with the solicitor who takes the case. He or she therefore has a financial interest in the result and in the way the case is conducted. The consequence is that cases which should be brought but seem of high risk are turned away and the injured party is denied any hope of a remedy. Borderline cases are not welcomed by no-win no-fee lawyers. The method does not increase access, it reduces it. Many people are denied a remedy and the courts are denied the opportunity of responding to individual cases and changes in society. The system resembles one which was long outlawed - called champerty and maintenance. It is a move backwards to an illegal and potentially corrupt method.
Peter Soar, Cambridge
Laura, Cumbria: how do you know the other driver was uninsured? If you can prove he was just inform the police, he'll end up worse off whether he "saved the cost of his premium and earned a few quid" or not. Also, why shouldn't your partner lose his NCB? He had an accident, which he caused, sounds pretty fair to me. Bad drivers push up the premiums for the rest of us too and consider this; no bad drivers = no accidents = no faked injuries / frivolous claims.
Stuart, Sutton Coldfield
I slipped on ice two weeks before Christmas last year. The landlord of the club had allowed his ice machine to overflow and create a virtual skating rink. As a result of his inability to: A) put up a warning sign, B) turn off the machine, and C) clear the area of ice, I now have an eight inch plate running up my ankle, nine pins and am scarred for life. It took his insurers until two weeks ago to admit liability, and then they offered only 75% as "he knew the ice was slippy". Well, forgive me for being ignorant, but if I had been told it was icy, I wouldn't have gone around the back of the building to unload my gear. Most claims are not frivolous, but are looked upon due to insurance companies who treat claimants like thieves.
Andie Riley, Leeds
Having dealt with personal injury claims for many years for a number of major insurers I have no doubt that the public perception is totally wrong. A million pound payout may seem a lot but it doesn't go a long way if you are 25, can never work again and need to pay for 24 hour care because you've been left paralysed. Saying that, having worked for personal injury solicitors as well, I've never met a poor one.
Chris , Sittingbourne
After a car accident a few years back, I ended up with severe soft tissue damage to my shoulder. As I was in the middle of my last year at university, I didn't take the time off I probably should have and ended up being told by the other driver's insurance company that I couldn't be that badly injured and was farmed off with very little compensation. Five years on, I still have to pay for expensive regular osteopath sessions. I get so frustrated when I see people around me who slipped on a post it note when they didn't look where they were going getting thousands - clearly we should all learn to fake injuries a bit better.
These no-win no-fee firms do encourage frivolous claims. I recently had a very minor prang caused by myself. The impact was very slight and no airbags went off in either car and I was able to drive off after swapping details. The other party claimed over 20k for whiplash which my insurance company paid out, the chap was OK at the time and said he was fine. These law changes must be amongst the dumbest ever. I'm all for people claiming who have a legitimate claim but this just encourages greed and stupidity. The annoying TV adverts are pitched at the level that these idiots can understand.
Stephen Wood, Sheffield
It's important to remember that without no-win no-fee, many people who have been crippled or seriously injured by negligent employers would have received no compensation whatsoever. Many employers think it's OK to ignore health and safety rules, and don't really care if their employees fall off shaky ladders, or lose a hand in an unguarded slicing machine. No-win no-fee means they can be forced to protect their workers.
No-win no-fee is OK if the other party is insured otherwise your stuffed. This happened to me when the operator of a funfare falsified his public liability insurance. Naturally the insurance company rescinded their responsibilities and my claim for multiple fractures left me out of pocket and eight months off work and crippled for life. No-win no-fee? Don't you believe it.
John Franklin, Wootton Bedford England
My partner hit another car when pulling up to a set of traffic lights. The car stopped suddenly, about 30ft away from the lights. As my partner was stopping anyway, the only damage was a cracked headlight on his own vehicle. He took photographs, and tried to get the drivers details. The other driver was uninsured, and so was very evasive about his details. It was forgotten about until a month later when a letter off a "no-win no-fee" solicitor appeared on the doormat. He was suing for whiplash and other personal injury. The car insurance company did not even contest the claim, despite evidence to suggest the injury was faked. As a result, my partner lost his no claims bonus. The uninsured driver not only saved himself the cost of a premium, but earned a few quid for a bit of melodrama. It's got to a point now where some car insurance companies are just paying out for frivoulous claims, as it's cheaper than contesting them at court. The result of this is higher premiums for those that are insured.
Whilst most would appreciate that greater "access to justice" is provided by the CFAs, I would imagine that a large amount would also agree that it encourages abuse of the system. Nobody doubts that there are genuine incidents that result in injury or worse. The evidence is there to see on the HSE website. In cases like these, the injured party should be entitled to claim. However, what CFAs also allow is ambulance chasing and hawking by unscrupulous firms who focus their attention on those people who they think would appreciate the cash that they could receive following their "so called incident". The compensation culture will exist as long as these firms exist.
Andy Dawson, Lancashire
I am a solicitor and I am always astounded at the injustice of the other side paying the uplift of fees in the event that the claimant is on a CFA - why should a defendant have to pay extra just because it happens to be sued by someone who can't afford legal fees? This effectively means that the claimant can't lose either way. The law should change so that the claimant, in the event of a win, should pay the uplift of fees to his solicitor. Otherwise, where is the risk to the claimant? If you can't afford something, surely there must be a price if you take a gamble such as a no-win no-fee.
Samantha Phillips, London
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