Recession causing a surge in no-win-no-claim cases
With the recession scenario setting in, companies across the UK are reporting a surge in ‘no win no claim’ cases.
According to insurance experts, the main reason for such a surge is due to the ongoing recession, which has forced councils, employers and motorists to reduce their expenditure and neglect safety issues.
Conditional fee agreements (CFAs) or no-win no-fee deals were introduced in the UK civil courts in 1998 to make the legal system fair for those who could not afford the legal charges. This system ensures that a case goes to court not because one can afford it, but because the case is strong.
No win no claims in the tourism industry
Irrespective of the downturn, people of UK are not compromising on their annual holidays.
However, keeping in line with historic trends, the recession has brought about an increase in the number of ‘no win no claim’ cases in the tourism industry.
According to a compensation expert in the travel and holiday insurance sector, “It's been a pattern in the last few downturns. When times are hard and affording a holiday is pushing the budget, claims are much more likely.”
He further added that, “On the one hand travel companies are facing more claims and on the other they have fewer staff to deal with them.”
The tour and travel companies are being blamed for focusing more on value for money rather than customer satisfaction.
This has meant that the travelers are not getting what the brochure described or they are getting ill frequently.
According to a compensation expert, travelers in such a scenario have an instinct to recover some of their money spent due to the scenario of recession.
Since a ‘no win no claim’ case ensures zero expenditure in a legal claim, more and more travelers are filing such a case against their tour operators.
Employers and the no win no claim policy
Due to the ongoing recession, a number of businesses are cutting down on their staff to reduce their expenditure. A no win no claim option is becoming popular among those employees who think that they have been unfairly dismissed.
Since a number of small businesses are desperate to cut down on their costs, they are neglecting the correct method of retrenching employees.
This has left numerous individuals jobless and without a proper explanation as to why they were dismissed.
According to Phil Orford, chief executive of the Knutsford-based Forum of Private Business, “As soon as people start to encourage employees to pursue claims at no cost you are going to experience a rise, and the complexities of employment law make it more difficult for smaller firms to cope.”
A rise in personal injury claims
According to the figures revealed by Department for Transport (DfT), there has been a significant reduction in the number of road casualties in Britain as compared to the previous year.
This is due to the fact that recession and the rising fuel costs has discouraged the use of car as a transport medium. However, despite the reduction in the number of road casualties, there has been a surge in the number of personal injury claims.
According to the director of AA insurance Simon Douglas, people involved in road accidents are “much more inclined to make personal injury claims”. This claim came after a research showed that the number of no win no claim cases in the UK had surged significantly during the past few months.
Updated on 9/24/2009