New legislation will impact anyone making a claim through the courts after April 2013

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On 1st April 2013 the Legal Aid, Sentencing and Punishment Act 2012 will come in to force. You may think ‘So what?’

You may not eligible for legal aid, and you may not have committed a crime, nor be waiting to be sentenced, but don’t let that fool you: this piece of legislation potentially impacts upon every business and individual who makes a claim through the courts of England and Wales after that date.

Within the Act is legislation that blows away the principles that have underpinned the way the costs of making a claim are dealt with and how solicitors can fund these cases.

A contingency arrangement allows your solicitor to take on your case for a slice of your damages. Contingency type arrangements have been unlawful until now in civil matters where proceedings are underway.

For years, those arguing for contingency fees had made little progress against the long established principles that such agreements were unlawful, and should not be allowed for reasons of public policy. The fear has always been that unscrupulous solicitors might supress evidence where they had a stake in the outcome of a case, and that this takes us closer to an American model of funding cases with potentially vastly inflated claims.

Now the tide has turned. The principle of contingency fees is now being extended to civil claims, which include money claims, defamation, professional negligence and property claims. These new contingency agreements will be called Damages Based Agreements (or DBA’s). There will be a cap on the amount that solicitors can agree to take in personal injury claims of 25% of the damages, but in other claims it is up to the solicitor and client to agree between them.

The new rules will provide solicitors and clients with another option when approaching the crucial  issue of how to fund litigation. Whilst some may be nervous about this legislation, they will have to get used to it: the changes are here to stay.

For those willing to embrace the new rules, both solicitors and clients, there are opportunities here to increase access to justice in a manner unthinkable a few years ago.

 


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