ARAG News

Motor claims limit

24 February 2016

motor claims limit-blog ARAG -feb2016In an article appearing in February's edition of Litigation Funding Magazine, solicitor and senior partner of Underwood's Solicitors, Kerry Underwood, suggests that solicitors should charge clients 40% of damages to pursue personal injury claims arising from a motor accident once the small claims court limit increases from £1,000 to £5,000 in April 2017.
Around 90% of motor personal injury claims are for sums of damages between £1,000 and £5,000.
[The main consequence of increasing the small claims court limit is that lawyers' costs are not recoverable in the small claims court].

In fact Mr Underwood goes further, suggesting that solicitors might start introducing 40% pre-issue contingency fee agreements for such claims earlier than April next year, and for all claims irrespective of whether or not costs will be recoverable from the other side. 
Pointing out that claimants in employment tribunals "happily pay the statutory maximum of 35%" [from a settlement agreed to resolve the dispute or compensation awarded to the claimant by an employment tribunal].

The article concludes that if clients do not wish to pay 40% they can pay an hourly rate to their lawyer- win or lose, or take their chance and litigate the claim themselves.

We contend that claimants will be better off than they ever have been by having in place before-the-event legal expenses insurance cover which will fully protect them from forfeiting damages in order to pay lawyers' costs.
Brokers will be wise to make sure that clients appreciate the value of their legal expenses add-ons.  We provide cover to pursue motor personal injury claims under our Motoring Legal Solutions and Family Legal Solutions policies.

--

Lesley Attu

Product Development Manager

 

News Archive