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Arena Magazine 2005 Issue 1 |
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No win no fee deals fail victims
Accident victims using ‘no win no fee’ legal firms often end up with little or no compensation even if they win their case, says a hard-hitting report from the Citizens Advice Bureau (CAB).
The (CAB).found that consumers were misled by the term 'no win no fee' which refers only to the solicitor's fee but does not cover other costs such as loan-financed insurance premiums, and court and expert witness fees.
The CAB report also claimed that the UK was far from being gripped by a compensation boom. Of the 2.5 million people who have an accident each year less than a third claim damages.
In addition, since legal aid for personal injury was abolished in 2000 the number of claims being made each year has fallen by 50,000.
To plug this gap 'claims farmers' - unqualified intermediaries - have emerged. These companies, who are unregulated, use high pressure sales tactics and are more interested in signing up large numbers of claimants. These companies, who then farm the claims out to solicitors, pay little attention to their client's needs, says the report.
It is a worrying trend and one which Usdaw members need to be fully aware of.
The CAB survey revealed a number of alarming cases including:
- A woman in Devon who won her personal injury case was left with just £15 after legal and other costs. This was less than one per cent of her £2,150 compensation.
- A man in Warwickshire who won about £7,500 for loss of earnings and injuries from an accident at work, but ended up with £400 after the solicitor's costs were deducted.
- A man from Lancashire who had an accident at work and was awarded £1,250. He had taken out insurance with a loan company to cover the costs and with the interest plus the solicitor's bill he now owes nearly £2,400.
People on low incomes, with good claims for small but personally-significant sums, often find they cannot get a lawyer to take up their case because it is not considered to be of great enough value relative to the costs.
"It's clear from this independent survey that workers need the union's free legal service more than ever," said general secretary John Hannett. "Our members can rest assured that any compensation Usdaw wins for them will be delivered in full with no deductions."
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