An End to 100 Percent Compensation: Why recent changes favour the insurers.



Changes brought about last year mean an end to 100 percent compensation. We explain exactly why the changes came about and how they will affect your claim.

We’ve all seen the advertisements…

“Have you had an accident at work? Been injured? Here at (insert one of any law firms you want) we have helped countless people with their personal injury claims on a no win – no fee basis…”


The Good Old Days

Some would claim that the no win-no fee system was biased toward the claimants. In cases involving moderate to low level damages where the value was less than £25000, which covers the vast majority of personal injury claims, the claimant would receive 100 percent of the compensation; and if a claim was unsuccessful the claimant had nothing to pay. On winning such claims, any money spent by the solicitor in taking on the case was met by the insurers as the costs then allowed were enough to actually cover the solicitor’s expenses.

Access to Justice

This made sense for the claimant because the solicitor’s expenses could be substantial including medical reports and records, and possibly an insurance premium to cover additional expenses such as court fees (an element that the Government has increased substantially in recent years) or the cost of barristers etc. if proceedings had to be issued and the case went to trial.


Arguably, making the claimant pay their own costs would be limiting their access to the justice system so the 100 percent compensation principle appeared to be fair, at least to the claimant and their legal team. Things did not seem quite as rosy for the insurers who were footing much of the bill.

And then…

Changes in the system brought about through Government legislation last year (in response to lobbying from their friends in the insurance industry) have swung the balance more favourably toward the insurers. The government has published information about the changes on the Ministry of Justice website but here’s a brief outline for the lay person.

What do the new changes mean to you?

These changes have severely limited the proportion of costs that are recoverable from the insurers in moderate to low value claims to such an extent that if solicitors relied solely on these costs they would most likely have to close; in fact, many have already fallen by the wayside.Consequently, if you want to pursue a claim on a no win – no fee basis, your solicitor can still give you the guarantee that there will be no liability for any payment if you lose the case, however you will have to agree to pay the solicitor a portion of your winnings if the claim is won.


How much will a win cost you?

The amount you agree to pay the solicitor will typically up to 20 percent or 25 percent of the damages recovered by the solicitors although the exact cut may be subject to negotiation depending on the size of the potential damages and the prospect of success. Perhaps the old system was biased towards the claimant and their solicitors however there can be little doubt that the new rules favour the insurers more.


Smaller pay-outs should mean lower premiums

Insurance companies can now happily boast that the savings they have made will mean lower premiums for the rest of us. Unfortunately, that offers little comfort to those claimants whose injuries are longer term and debilitating and need every penny of their compensation.

Claiming is still worthwhile

If you or someone you know has had an accident, all is not lost and it is still worth making the claim. Given the changes, it is more important than ever that you find the right solicitor who will advise you properly and who will ask for a fair amount should your claim be successful. Hallam Solicitors have a lot of experience dealing with compensation claims and can assure you of an effective and fairly priced service.

For more information, get in touch today.


21 Otley Road Headingley