Amongst an array of consequences for lawyers, the most notable is the reduced opportunity for lawyers to take on small claims. The intention is to discourage small claims, as the regulated costs are so low that consistently taking on small claims will become unsustainable.
The introduction of the Dispute Resolution Service as the dispute resolution mechanism for the statutory benefits scheme also means that lawyers will only be permitted to charge for their services if the injured person is under a legal incapacity or exceptional circumstances exist.
Even the value of common law claims is now reduced due to the limits on the heads of damages that can be claimed, namely economic and non-economic loss.
But what is the underlying cause of this CTP overhaul? Well, the two main factors seem to be the prevalence of fraudulent claims and increasing premium prices. The new scheme is said to be a response to the rise of exaggerated (‘soft’) fraud claims and outright fraudulent (‘hard’) claims. The added restrictions and thresholds in the scheme will essentially act as deterrents for both claimants and lawyers.
Importantly, lawyers are urged to familiarise themselves with the new laws and regulations as soon as possible so as to help injured persons navigate through their entitlements to compensation.
A definitive guide to the new scheme can be found here.
The team at Stacks Goudkamp are experts in running and maximising compensation claims. If you or somebody you care about has been involved in an accident, you may be entitled to compensation. For more information, and to arrange a free, no obligation assessment of your claim, please call Stacks Goudkamp on 1800 251 800 or alternatively make an online enquiry.