A new bill which is being put forward may see a huge increase in the number of personal injury claims which are made in Scotland.

The accepted rule in Scottish courts is that whoever loses the case pays the legal costs of the winner. This means that we don’t see big numbers of cases which don’t have any merit, as well as giving both parties an incentive to settle cases before they have to deal with any legal fees.

This could all be about to change in personal injury cases though, and while unintended, the consequences could be costly for everyone.

Claims management companies see Scotland as a haven

Currently being discussed by the Scottish Parliament’s Justice Committee, the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill is looking to implement a massive change in personal injury litigation in Scotland. The bill proposes that anyone who pursues personal injury cases in court will not have to pay the legal costs of their opponent, win or lose.

The reason the bill has been introduced is to solve the ‘David vs Goliath’ relationship that currently exists. The relationship gets its name from the fact that most pursues do not qualify for legal aid, don’t have the money to pay lawyers’ fees, and the defenders they are fighting are generally insured.

It is not as simple as this, however, with a number of solicitors working on ‘no-win, no-fee’ basises.

This means that clients already pay nothing to pursue a case, and they are backed by the financial might of the solicitor’s firm, who often have claims management companies backing them.

Despite the enormity of these changes, the Scottish Government is yet to provide evidence of the number of people injured in Scotland who fail to have a lawyer take their case.

Since 2011, there is data that suggests that there has been a huge increase in the number of personal injury claims which have been made in Scotland since 2011 – almost four times as high as the increase that England has seen.

Legal reforms in England have meant that claims management companies have moved north of the border.

The claims management companies that have moved to Scotland have done so because of the introduction of measures against them. Claims management companies in England are now regulated, and the legal fees which are paid to the claimant lawyers have been reduced. This is on top of the banning of the controversial practice of buying and selling claims.

The changes in the rules have ensured that the behaviour of claims management companies has improved significantly, as it has helped to remove the incentives that were there for bad conduct.

None of the measures which have helped improve the situation south of the border have been proposed in the bill which is currently being discussed by the Scottish Parliament’s Justice Committee. This means that Scotland remains an enticing place for making personal injury claims. This is what will attract more and more claims management firms, meaning that we should expect more daytime TV adverts as well as texts and emails from the companies telling us how much money we are owed in compensation.

There is one exception to the new rule, should it be approved by the Justice Committee, which is if the defender is able to prove unreasonable contact or fraud.

These exceptions will not work as a deterrent for every potentially false claim, as there are still big financial rewards available for those who put claims forward in the first place.

It is important to realise that a huge majority of claims are settled before they ever make it to court. This means that the exceptions to the rule will likely not take effect on a large number of cases.

The Government say that they are reviewing their regulation of claims management companies.

While this is a step in the right direction, it is not enough. It is important that the Government do not create further incentives for claims management companies to behave irresponsibly, as well as introducing regulatory measures against these companies.

The companies want to find people who have genuine claims, to ensure that they are paid quickly and with the full amount. The legal costs for a pursuer are much higher in Scotland than they are in England, this means that the claims management companies prefer to operate here, creating false claims through texts and cold-calls.

These fraudulent claims are paid for by the taxpayer, so it is something that we should all be concerned about. The other people who suffer as a result of the fraudulent claims include insurance policyholders, as well as genuine claimants whose settlements are delayed by the fraudulent ones.

The bill which is being discussed by the Justice Committee only increases incentives to make fraudulent claims, and does nothing to help fight fraudulent claims in Scotland.

There are a number of factors that make Scotland such an attractive prospect for these claims management companies, particularly if the new bill is introduced. They will see that they no longer have to pay legal fees even if their cases lose, meaning more income from referral fees, increased legal costs, topped off with no regulatory body to keep them in line.

The Scottish Government have said of the bill that it ‘might lead to an increase in the number of personal injury claims.’

It is in no doubt that we will see an increase, and that it will be a substantial one, and it will be the taxpayer who will have to foot the bill.

Contact our Personal Injury Solicitors in Glasgow, Scotland

With lawyers based in Glasgow, and servicing the whole of Scotland, our team of Personal Injury Solicitors can help you with all areas of your claim, ensuring you receive the best representation from the start of your case through to the end. To speak to a member of our team, call us today on 0141 413 4292, or complete our online enquiry form here.