One of the most common concerns for potential claimants is the cost of pursuing a personal injury claim. Here, we explain the financial aspects of making a claim, including the No Win No Fee system, potential deductions from your compensation, and other costs you might encounter during the claims process.
Understanding No Win No Fee Agreements
Most personal injury claims are handled under Conditional Fee Agreements (CFAs), commonly known as “No Win No Fee” agreements. Here’s how they work:
- No Upfront Costs: You don’t pay any fees to start your claim.
- No Fees if You Lose: If your claim is unsuccessful, you typically don’t pay any legal fees.
- Success Fee: If you win, you’ll pay a “success fee” to your solicitor, capped at 25% of your compensation.
Costs if Your Claim is Successful
If you win your case, there are some costs to consider:
1. Success Fee
- Capped at 25% of your compensation (excluding future losses)
- This fee covers your solicitor’s time and the risk they took in pursuing your case
2. After The Event (ATE) Insurance
- ATE insurance is often not required in straight forward claims
- Protects you from paying the defendant’s legal costs if you lose
- Premium is only payable if you win
- Typically costs between £150-£250 for standard claims
3. Other Potential Costs
- Medical report fees (usually covered by your solicitor)
- Court fees (if your case goes to court, usually covered by the defendant if you win)
Costs if Your Claim is Unsuccessful
Under a proper No Win No Fee agreement, you shouldn’t have to pay anything if your claim is unsuccessful. This includes:
- Your solicitor’s fees
- Court fees
- The defendant’s legal costs (covered by ATE insurance)
The Impact of the LASPO Act 2012
The Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act 2012 introduced significant changes:
- Claimants now contribute up to 25% of their compensation towards legal costs
- ATE insurance premiums are no longer recoverable from the losing party
We argued that this would not be fair on claimants injured in non-fault accidents, who should not have to pay anything for claiming compensation. However, the government saw otherwise. As a result, the 25% deduction obligation was passed in to law.
These changes mean successful claimants receive slightly less of their compensation, but the No Win No Fee system still provides access to justice without financial risk. It still ensures that making a personal injury claim remains accessible to most people.
Although successful claimants will contribute a portion of their compensation towards legal costs, this is balanced against the benefit of not having to pay anything if the claim is unsuccessful. Remember, receiving 75% of a fair settlement is significantly better than no compensation at all.
Frequently Asked Questions
Generally, no. This fee is standard under No Win No Fee agreements. However, some solicitors may offer to cap their fees at a lower percentage for certain types of claims.
Most solicitors will cover these costs initially and recover them from your compensation if you win.
Reputable solicitors will be transparent about all potential costs. Always ask for a clear explanation of any fees or deductions before proceeding with your claim.
This depends on the terms of your agreement. Discuss this with your solicitor before withdrawing.
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