I am asked this by most new clients, either in my first discussion with them or at the first meeting. It is clear that there are many myths circulating about legal fees in injury claims and some people think it will be “too expensive” to claim, so I thought I would set the record straight.
Most claims nowadays are brought with clients having signed Conditional Fee Agreements (CFAs) and having taken out policies of After-the-Event Insurance (ATE).
This means that if a client does not succeed with a claim (subject to the rare exception I will mention later), then they pay nothing at all in respect of legal fees or disbursements.
If they do succeed, then, firstly, pursuant to the CFA they will have to pay a success fee to their solicitor. The amount of the fee will depend on the percentage of the success fee in the CFA itself and the amount of work performed by the solicitor at the point when the claim is concluded. However, it will never be more than 25% of the amount of the compensation that the client receives.
Secondly, the client only pays for the ATE premium if they win the claim. The amount will vary from around £34 in straightforward road traffic cases to a few hundred pounds in a Fast-Track case (valued up to £25k) although premiums will be more in high value and complicated cases.
Clients usually pay their success fees and ATE premiums out of the compensation they receive, so they don’t have to find the money before the end of the case.
Legal Expenses Insurance
Some clients have Legal Expenses Insurance (LEI) so do not need to enter into a CFA. Commonly found as additions to motor and house insurance policies, LEI will mean that the policyholders will not have to pay a success fee or an insurance premium if they win the case and still pay nothing if they don’t succeed, provided that the terms of the LEI policy are complied with. We always advise clients to check for LEI before we enter into a CFA with them.
Others may be covered by Trade Union funding which is similar to LEI if they or a member of their family is a member of a Union which offers such a scheme.
In rarer cases, such as Criminal Injury Claims and those to the Motor Insurers’ Bureau where the claimant has been injured by an untraced drivers, Solicitors may enter into Contingency Fee or Damages-Based Agreements with clients so they are only paid if the claim succeeds, in which case, like many US lawyers, they receive a sum equivalent to a percentage of the compensation which the client receives. Common figures for these types of agreements are 33% and 40%.
Legal Aid is only available in Clinical Negligence where the client suffered injuries during childbirth.
The exception to all of the above is very rare, apparently occurring in 0.4% of cases and occurs where the client is found to have been “fundamentally dishonest”. That means that the Court has ruled that they have lied or been fraudulent about a substantial issue in the case – examples include cases where Claimants have been proved to have been working after the accident when they stated that they were unemployed, have greatly exaggerated the effects of their injuries, have lied about how or where they were injured or were not injured at all. In those cases, the Claimants are often ordered to pay their own legal fees and those of the opponent. Fortunately these cases are much rarer than insurance companies and some elements of the press would have us believe. We have yet to act for a person found to have been fundamentally dishonest.
So a short answer to the question at the top of the article is that a case usually costs nothing if you lose and if you win, you may have to pay a success fee and an ATE premium or a percentage of your compensation, but nothing that is not deducted from your compensation. In some cases you will pay nothing if you win.
Remember that it is often advisable to speak with a solicitor that offers a free first interview before starting a Personal Injury claim.
If you would like free advice about any type of claim, please call us on 0114 218 4000 or email my team at P.I.Dept@tayloremmet.co.uk