The Motor Accidents Compensation Regulation 2015 has been amended to cap legal costs for NSW compulsory third party (CTP) claims.

As previously reported by insuranceNEWS.com.au, broad changes to the CTP scheme were delayed in response to a campaign by the legal profession, which highlighted concerns over the loss for many people of rights to claim lump sum compensation. (See earlier story)

The legal costs cap was suggested as an interim measure, and the Government agreed to impose it.

The cap applies to claims made on or after last Tuesday, regardless of prior costs agreements.

The changes:

• Prohibit contracting out of maximum solicitor-client costs for claims for a settlement or award of not more than $50,000
• Protect the first $50,000 of a settlement or award from solicitor-client costs
• Limit legal costs to $5000 for claims made by children under 18 where the settlement or award amount is not more than $25,000, or if the same legal practice is bringing a claim on behalf of another occupant of the same vehicle
• Limit legal costs to $10,000 for claims made by children under 18 where the settlement or award amount is between $25,000 and $50,000.

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