Survey: 10% uplift to damages “insufficient” to cover extra LASPO costs

Hurley:  professional indemnity claims on the rise

Hurley: professional indemnity claims on the rise

Nearly three-quarters of personal injury specialist solicitors say the 10% uplift in general damages introduced to compensate for the LASPO changes is insufficient to cover the additional costs that claimants now have to meet, according to a survey.

Challenging the view of former Forum of Insurance Lawyers president Andrew Parker, who in December claimed the Jackson reforms had “improved access to justice”, almost two-thirds said a claimant’s access to justice has been significantly restricted by the reforms in the nearly two years since they came in.

Predictably, the survey of 100 senior soliciors – carried out late last year by MSS for legal expenses insurer ARAG – found that seven out of 10 reported the reforms had had negatively impacted on their practice, while not one indicated a positive impact.

Just 11% thought they were routinely securing the additional 10% uplift on all successful cases and only one solicitor said the extra 10% fully covered the extra cost of after-the-event (ATE) premiums and success fees.

Although 83% of practices surveyed offered ATE insurance, just half offered it on all cases. ARAG argued that the shortfall risked higher premiums due to adverse selection, as firms cherry picked the more certain cases.

ARAG’s head of ATE, Paul Hurley, said: “Where firms don’t insure, the client is often left holding the risk unless the firm agrees to carry the risk themselves. This leaves the firm vulnerable to professional indemnity claims from disgruntled claimants, an area we know is on the rise…

“The reforms should have ensured that a claimant is returned to the position they were in prior to the injury, without penalty and this is not the case. In fact, for many without the means to fund a case themselves, access to justice is simply not available.”

He called for an “urgent review” of the reforms by whichever government was in power after the general election to ensure changes were “fair to all sides in the claim, not just the defendants”, adding: “With legal aid only available in exceptional cases, ATE insurance is the only recognised form of protection that can safeguard the claimant against adverse costs in pursuing a claim, and so the cost of premium should be recoverable from the losing party.”


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