Choosing personal injury firm or lawyer?

Radar 11 January 2010

Television programme Radar last Monday exposed the questionable practices of personal injury firms. Radar first focused the lamp on the 'advising' of 'no cure, no pay' agreements to victims in situations where this was completely unnecessary because liability for the injuries had already been acknowledged or was perfectly clear. In this case, the law stipulates that the liable party must reimburse the reasonable costs of legal assistance, and it is financially disadvantageous for the victim to agree with his advocate to receive a percentage of his compensation.

The issue of 'double billing' by personal injury agencies was also raised. Some agencies offering a 'no cure, no pay' arrangement not only charge their client a percentage, but also the hourly rate for their work to the insurer. Agencies like Pals Groep and Euroclaim were cited as examples. Immediately after the broadcast, the Dutch Association of Insurers let it be known that when advocates would have the same work paid for in full by both the insurer and the victim, it is a scam. The Verbond confirmed that these practices occur with such agencies. With personal injury lawyers do not encounter any problems, the Alliance said.

The TV programme also paid attention to secret covenants that personal injury agencies make with insurers. These agreements state that the advocate gets a fixed percentage of the compensation. The earnings of the personal injury lawyer are thereby greatly inflated. Univé, Reaal, Fortis and Achmea have admitted to having made such agreements, but refuse to say with which agency or agencies. Radar says it can prove that Fortis has a covenant withPals Group. This states that the agency gets 21% of the compensation. Delta Lloyd has confirmed it also agreed 21% with Pals. Pals itself acknowledges having agreements with 10 insurers.

"Perplexing," said MP Arda Gerkens (SP) after she learned about the existence of secret agreements between ten insurers and Pals Group in the TV broadcast of Tros Radar. "Because I think it does affect the independence of the advocate."

Lawyers are prohibited by law from handling cases on a 'no cure no pay' basis. 'No cure no pay' seems like a nice solution for risks that are difficult to assess, but it quickly sells the victim short. In many cases, a 'no cure no pay' provider estimates in advance whether the case is viable and what the approximate size of damages might be. If then a 'no cure no pay' agreement is made then it can mean that the victim pays far too much for a case, in which the advocate also had little risk.

The law entitles personal injury victims to reimbursement of their legal costs by the liable party provided they are reasonable, and the latter is usually the case anyway. When liability has not yet been established, lawyers are allowed to work with a 'low-high fee' arrangement, which reduces the risk of costs. And if the victim falls below a certain income threshold, he can apply for government funding to employ a lawyer. The victim then only has to pay a small co-payment. This funding option is not available to personal injury agencies.

Tip: Do not hesitate to ask the lawyers at Labour Injury Lawyers about the possibilities of making fee arrangements or government-funded legal aid.