11 September 2012Print This Post

Life after Jackson – less work, less profit and fewer staff

Stark: demoralised group of people

Claimant personal injury lawyers have painted a grim picture of what life will be like after the Jackson reforms, with less work, redundancies and firms looking to move away from this type of work.
Nobis Jackets Men

A snapshot survey conducted by the Association of Costs Lawyers also found strong opposition to government plans to extend the RTA claims process to higher-value and other PI cases.

Some 78% of the 50 respondents predicted that they would have less work after part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 comes into force next April, with 84% believing it will reduce their profitability too – most (90%) expect competition to drive down success fees once they are no longer recoverable from the losing side. More than two-thirds (70%) think the reforms will make their firms less willing to take on riskier cases.

There was uncertainty about who would pay for after-the-event insurance if it is needed – 28% said the client, 24% the solicitor and 38% reckoned it would be a mixture of the two.

Some 62% of firms expect to make staff redundant as a direct consequence of the Jackson reforms, while 28% did not know at this time – only 10% said for sure that they would not. Nearly six in ten firms (58%) are now looking to move away from personal injury and diversify into other areas of law.

On the RTA claims process, the majority (72%) said that it falls short in some areas (22% said it delivers what it is supposed to). Asked what improvements or changes they would like to see, 32% wanted it easier to use, 22% higher fixed costs, and 16% for fewer cases to fall out – the majority of respondents (54%) said that between a quarter and a half of cases they deal with fall out of the process, which is consistent with other findings.

Four in five solicitors opposed both vertical and horizontal extension of the process, citing the increased complexity of such cases as the main reason and the fact that one size cannot fit all; the lack of an insurer database was also highlighted in relation to employer’s liability claims specifically.

A third of respondents said they were likely to move to contingency fees/damages-based agreements for non-portal cases once allowed under the Act.

Iain Stark, chairman of the Association of Costs Lawyers, said: “It is easy for the public and policymakers to be indifferent to the impact of the Jackson reforms on claimant lawyers, but the responses to our survey indicate a demoralised group of people who will not be able to hold open the door so that injured people can access justice.

“It is often said that, like water, lawyers will find a way to continue, but at what cost? As one respondent said: ‘Lower fees means less-qualified fee-earners representing clients and less compensation recovered. The actual cost of providing the professional Rolls Royce standard service which clients expect will be out of proportion to the Mini costs recoverable.’”

By admin

Tags: , , , ,