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Children will have to pay for their own lawyers to get car crash compensation because they will be excluded from a low-cost Government scheme that takes effect in April.
The Government, worried that car insurance premiums are rising due to whiplash claims and legal fees, is bringing in a low-cost online portal on April 6.
Adult claimants will be able to use the portal to bring claims without lawyers. The Government will also bring in a tariff of set payout amounts for road traffic injuries to bring costs down for insurers.
At the same time, changes to payout rules will cut the fees earned by lawyers who will also lose work to the new portal. They say they will earn so little that they will not be able to represent under-18s at all.
As a result, children – who cannot use the portal – will either have to pay for a lawyer out of their own pocket upfront or drop their hopes of compensation, all at a time that they are suffering from injury.
Currently, if a child is injured in a car crash a lawyer has to help them get compensation, because injury payouts to juveniles have to be decided by a judge in court. The same is true for all "protected parties", such as injured adults without the mental ability to be directly involved. Lawyers then recover their costs from the losing side’s insurer.
From April, children will still need to use the courts to get crash payouts, as the Ministry of Justice (MoJ) has excluded their cases from the new online portal, arguing vulnerable groups including minors should be seen by a court.
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Matthew Maxwell Scott, of the Association of Consumer Support Organisations (Acso), a trade body, said: “Children can’t use the new portal because the Government has said they can’t, so their only recourse to justice is to get a lawyer.”
To make matters worse, under the new system lawyers representing children cannot reclaim their costs from the losing side’s insurer, and instead would have to take their fees from the damages awarded to the child.
In a cruel twist, the level of those damages will fall due to the new tariff system, and lawyers would only be entitled to a maximum of 25pc of this lower payout.
Claimant lawyers say the outcome is that their fees would fall so much they will not be able to afford to represent children in court.
Stuart Hanley, of Minster Law, said: “The maximum a lawyer can take for a success fee is 25pc of the damages, and judges can reduce that. Judges may think even awarding 10pc would be too much. That reduces the commercial viability of a lawyer running a child’s case.”
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Acso has written to the MoJ about the issue.
An MoJ spokesman said: “Our whiplash reforms will make claiming for personal injury simple, fair and proportionate, but we are looking at ways they can be strengthened further in the interests of all claimants, including children.”
The portal system might not be ready for April 6, as the Government still needs to decide on the new tariffs and sign off laws for the rules underpinning the portal.
Nigel Teasdale of the Forum of Insurance Lawyers, a legal group, said: “I think it’s going to be difficult. It could be done. They could push through the secondary legislation and put more staff on to finalising the rules. But it still wouldn’t give enough time to adapt our systems to it.”
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