Survey: 3m people have used CFAs in last five years but Jackson will price many out

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By Legal Futures

25 May 2011

Dismore: government does not understand how people think

Almost three million people have used ‘no win, no fee’ agreements in the past five years but the government’s proposed reforms of the system will mean they are no longer an option for many people, major research released today has claimed.

Commissioned by the Access to Justice Action Group (AJAG) and the Association of Personal Injury Lawyers (APIL), the research found that half of those who had used conditional fee agreements (CFAs) earn less than £25,000 a year, below the national average wage, and would not be able to fund their claims any other way.

Women would be hit hardest, with the survey finding that the average female CFA claimant earned just over £19,000.

With the government set to publish legislation next month to implement the Jackson reforms, the research marks an escalation in efforts to build opposition to them among MPs.

Earlier this month ICD Research spoke to 15,441 people, of whom almost a quarter had made a legal claim in the past five years, and 7% (1,033) had done so using a CFA. Extrapolated across the population, this means nearly three million claims in that time.

The vast majority of the CFA cases were personal injury claims, half of them leading to payouts of under £5,000. Campaigners argue that once various deductions are made from damages under the planned changes, many cases will no longer be economic to run.

APIL chief executive Denise Kitchener said the government’s CFA reforms will mean “a huge number of people will lose their right to the compensation to which they are entitled, and which they need and deserve, as they will not be able to afford the legal help they need to bring a claim”.

AJAG co-ordinator Andrew Dismore added: “The government’s plans are Draconian and will end access to justice for the less well-off. The system we have now works well and has huge satisfaction rates from those who use it.”

He told Legal Futures that neither Lord Justice Jackson nor the Ministry of Justice understood that people would be put off from bringing a claim if they had to put any money up front – such as for disbursements – or if there was a risk of having to pay anything to the other side.

A separate poll commissioned by AJAG earlier this year found that 77% of people would not bring a claim if they were at risk of paying a defendant’s costs.

Though the Ministry of Justice plans to introduce qualified one-way costs shifting, so that normally a personal injury claimant will not be at risk of paying the successful defendant’s costs, it is considering whether there should nonetheless be a minimum payment in order to prevent speculative claims.

ICD said that a third of people found their solicitor through advertising/the Internet, while 31% used a personal recommendation (including trade union referrals). Some 16% went to their existing solicitor and 14% were referred by their insurer.

Nearly a quarter (23%) of cases went to court, while 67% settled pre-issue. Four out of five respondents were satisfied with the ‘no win no fee’ outcome and process, and a similar number were satisfied with the amount of settlement.

Almost a third of those who lost their case were still satisfied with their solicitor’s advice and performance.

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