According to experts, the rules gave birth to myriads of spurious legal claims, while the numbers kept on increasing with every year. Therefore, the amount of ‘whiplash claims’ has increased by 25% since 2010, which goes against a decreasing road traffic accidents number.
Another case to pay close attention to is a profitable sideline called into existence by legal establishments for those who deal with details and parts of vehicles suffered an accident (the components are sold to legal representatives). A no win no fee policy naturally contributed to a huge increase in accident claims, since an individual practically has nothing to lose if the result of an effort is a failure.
In turn, such attitude contributed to the changes in legal ranks: since a customer doesn’t care much about the costs, a savvy services provider steps up to increase pricing numbers. Some financial and law experts also believe that a success fee is hardly reflecting the real effort put into achieving the desired results in a solid number of cases (an exaggeration in ‘price – effort’ is what they mean exactly).
A price growth for legal costs turns into a tendency, and more respectable insurance companies attract more customers with their status and advanced offers, which gives a legal establishment a chance to keep on reconsidering their pricing policy on a regular basis. In accordance with the data provided by the Association of British Insurers, legal customers contribute to an average £2.7m reward through premiums for personal injury solicitors.
In a legal costs review for 2012, provided by David Young, NHS is reported to pay £8bn for claims in previous 5 years, and the damages payment totaled as little as 30%, while the rest amount fell to legal cases lot. A sufficient amount falls on taxpayers shoulders in full measure, plus the claims against local authorities may provoke another increase in taxes, meaning that a council tax may be affected.