100% compensation 'promotes consumer protection'

The 100% compensation system, which ensures personal injury victims receive their full compensation payout, is there to protect consumers, it has been argued.

On Tuesday, minister for justice Ken Clarke criticised no win no fee arrangements, saying they hamper the legal process by encouraging organisations to pay settlement sums for minor cases, fearing larger fees should they lose a case in court.

Association of Law Costs Draftsmen chairman Iain Stark notes if the principle of 100% compensation is to be scrapped, reforms will have to be made to the current level of damages to take account of the changing cost payment structure, The Lawyer reports.

He comments: "If legal costs are to be deducted from damages - presumably by reference to some form of percentage deduction - I would query how this promotes consumer protection.”

And personal injury lawyers support this viewpoint, arguing victims will be put off making legitimate claims because they lack the resources to pay claims solicitors.