“Sometimes fixed costs mean that claims are not economical to run. In the past we could say to clients, if you win you keep all of your compensation. That is how it should be. Unfortunately, given low fixed costs, we have to tell clients that if they win, a very significant slice of their compensation will be lost due to deductions for our fees and ATE [after the event] insurance premiums. This puts people off proceeding”. Where claims affected by FRCs are still pursued, there is a shortfall between what the victim can recover from the wrongdoer and their actual legal costs. In many cases, this means that the victim has to make up this shortfall from their compensation. This leaves them without the full compensation they need. APIL’s research with employer liability (EL) lawyers also found that asking injured people to cover this shortfall deters them from taking their claim forward: Victims forced to bear the financial burden “Less people will decide to make personal injury claims, as even if they win the case, they get much less money. Before the introduction of fixed costs, claimants received 100 per cent of their damages. Nowadays, in view of fixed costs, they will end with a much lower percentage – maybe only about 50 per cent when factoring in success fees and ATE insurance premiums. This is not fair and undoubtedly affects access to justice”. Quotes from APIL’s survey of employer liability lawyers +42% increase in inflation 0% rise in recoverable costs Since 2013, there has been a 42% rise in inflation, significantly increasing legal costs for victims of negligence. Yet for many injured people, the amount of legal costs they can recover from the wrongdoer has not increased at all. PAGE 19
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