The UK government and the Ministry of Justice finalizes that April 2013 would be the last month of win/lose no fee claims, which no win no fee claims would replace for all kinds of claims in the United Kingdom. The move ensures that UK’s claims management companies and personal injury lawyers cannot push through with fraudulent and exaggerated claims, which increase recompense amounts through legal enquiries.
The move came after insurance company research indicated that a 70% increase in the number of car accident claims contradict that of a 25% reduction in car accidents. Insurance companies pointed out that the industry loses £2 billion yearly for fraudulent and exaggerated whiplash claims. The consequence had many honest drivers pay for £118 yearly as their insurance premiums are pushed up.
The return of the win/lose no fee guarantees that most victims will approach insurance companies directly and not go first to mediating parties. However, personal injury lawyers and critics pointed out in any case, the implementation of the no win no fee would only undercompensate customers. Personal injury lawyers pointed out that without unbiased legal advice, victims could get reduced lump-sums.
Critics also pointed out that CMCs would be getting lesser numbers of clients, yet if some did, they only end up with the same compensation amount if they claim on their own paying 25% of the compensation for legal help.