How Does The Credit Crunch Affect Personal Injury and Medical Negligence Claims?

With the "Credit Crunch" having such an impact on so many businesses at the moment, is it also impacting on the Personal Injury and Medical Negligence Claims markets?

Director and former personal injury solicitor Nick Jervis of 1stClaims says:

"The claims market is one of the few areas that actually can see an increase during a downturn in the econcomy. There are several reasons for this, but the main one is that people who suffer relatively minor injuries that will attract an award of in the region of £2,000 in good times may not bother to make a claim for compensation. However, once the economy slows down, large bonus payments are no longer being made, and the availability of easy credit disappears as has happened now, that £2,000 suddenly becomes far more important to them."

"Another major reason for more claims being made during a downturn is that if someone has suffered an injury as a result of an accident at work, often they will be worried about claiming compensation from their employer in case they subsequently lose their job. Whilst the reality is that this very rarely happens, and if it does it will normally lead to a compensation claim for wrongful or unfair dismissal as well as the work accident claim, we understand that this is a reason for some people deciding not to pursue a claim. The major change in a downturn is that many people are made redundant by the same employer, and then have nothing to lose by pursuing a claim so decide to go ahead. With three years from the date of the accident available to make a claim for compensation the "credit crunch" is an indirect reason for an increase in work accident claims" Jervis says.

The only aspect of claims that you would expect to see reducing during a quieter economy might be medical negligence claims as often the claimant needs to contribute towards the cost of the claim as they are more difficult to prove. However, that is not happenening either. Nick Jervis says:

"I believe that there are a couple of major reasons for medical negligence claims not being affected by the economy. One of them is that more and more solicitors are offering no win no fee agreements, and funding the claims for the victims of the medical negligence. The other major reason is that we are seeing a year on year increase in medical negligence claims of at least 50%. Hospital superbugs are a major factor, with claims arising from the C Diff and MRSA bugs increasing all of the time."

It seems then that whilst so many aspects of business are affected by the credit crunch, the personal injury and medical negligence claims markets actually see a rise during a downturn.

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