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If this happens are things really as bad as all that? A liability admitted portal case will bring you £500 worth of costs. It if you've done the case properly you will have done little work so let's suppose you can charge your client, assuming your client pays you anything at all, another £500. That's £1000 profit costs and I'm sure there are lots of personal injury solicitors who will be glad of that these days.

If the case is in the small claims track I can only assume that the CFA cap will not apply and if not why not charge the £1000 directly to client

I don't do this type of case and presumably I'm missing something but is it really all that bad?

This is of course to ignore completely the reasons behind the government doing this which is as we all know to line the pockets of their insurance company friends. And to ensure that as few people as possible make claims. And to kick claimant's solicitors.
"Compensation culture" indeed the only compensation culture is the doctrinaire destruction of an industry that exists in my eyes solely to help people, ordinary people, pursue their rights.