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Monday 24 June 2013

Funding Personal Injury Litigation - How To Avoid The Pitfalls?

Prior to 1 April 2013 funding personal injury litigation was relatively straightforward.  A Claimant could be funded by way of a Conditional Fee Agreement whereby if he lost his case entirely, or failed to beat an offer made by the Defendant, he would be ordered to pay the Defendant’s costs but an insurance policy would cover this.  Alternatively, if he won his case he would recover his costs, plus the insurance premium and a success fee, from the Defendant.

From 1 April 2013 the funding arena has completely changed, at least in part as a response to the spiralling costs of litigation and the impact this has had on motor insurance premiums.

Although a Claimant will not now ordinarily be ordered to pay a Defendant’s costs if he loses his case, the rub is that he will be ordered to pay a proportion of the Defendant’s costs if the Defendant makes an offer which the Claimant rejects and he proceeds to trial and is awarded less.  The proportion of the Defendant’s costs the Claimant can be ordered to pay can be up to the amount of any damages awarded.  Added to this, the insurance premium taken out to cover the risk of paying a Defendant’s costs in the event of failing to beat an offer is no longer recoverable.  

In short, therefore, in the absence of an insurance premium, a poorly advised Claimant could lose all of his damages if he fails to beat a Defendant’s offer!

At Sampson Coward we can guide you safely through the personal injury funding pitfalls.  We will advise you of all your available options, seek to obtain insurance on your behalf to protect the damages awarded to you in the event of failing to beat a Defendant’s offer and ensure that the decision you choose is the right one for you.