Three-quarters of personal injury firms are planning to cut staff numbers in the near future unless the government pulls back from plans to reform civil litigation.
A survey carried out by the Association of Personal Injury Lawyers found that 118 of the 155 firms questioned were planning to cut their workforce this year.
The survey formed part of APIL’s full response to government plans to cut fixed fees for low-value personal injury work. The new recoverable costs for RTA claims valued under £10,000 would reduce from £1,200 to £500, whilst there are also fixed fees for claims up £25,000 and employer and public liability claims, which would be dealt with by an electronic portal for the first time.
One in six of the firms that took part in the survey said they would stop doing personal injury work under £25,000 if the proposals remain unchecked. More than half are undecided.
In its response, APIL argued that the government was letting independent advice be eroded to the detriment of the injured person. It also claimed that the government had forgotten or ignored the irreducible minimum amount of work required in all cases.
Law firms would be unable to run successful practices advising claimants on pursuing claims for minor injuries and instead claims management companies would move to running the cases themselves.
APIL claimed the government had no evidence to suggest that a £700 cut in costs would be balanced by firms no longer paying referral fees. Furthermore, more than half of personal injury firms do not pay referral fees and would not see any savings from the ban.
‘The government continues to draw conclusions about the link between referral fees and lawyers’ costs which are illogical and flawed,’ added the response.
It is unclear how quickly the government intends to respond to the consultation on fixed costs. The extension of the RTA Portal has been put on hold indefinitely, but the new fees for low-value work could still be in place as early as April.
Nigel Muers Raby, chairman of claimant lobby group the Consumer Justice Alliance, said: 'Lord Dyson, Master of the Rolls and head of civil justice, has said that he does not want the changes to the civil justice system to deny access to justice. However, the government must recognise that any attempt to reduce fixed recoverable costs associated with RTA cases would likely result in such cases becoming commercially unviable, leaving consumers finding themselves unable to find legal support following an accident.'