Why claimants pay 25% of any compensation settlement towards their legal costs

By Ian Morris | Updated February 7th, 2023

190 questions have been answered on this subject, why not ask your own?

Prior to the 31st March 2013, claimants pursuing claims for personal injury compensation on a no win no fee basis retained 100% of any settlement awarded to them with no deductions, and paid nothing if they lost their claim.

At that time, the system obliged 3rd party insurers to fully cover their legal costs and insurance costs as well as pay them compensation for their injuries and losses. From 1st April 2013, the law changed and successful claimants were obliged to help towards the cost of their claim by contributing up to 25% of their total compensation settlement and as Solicitors could no longer recover the cost of the ATE insurance premium in a claim, the claimant must also repay the cost of any such policy should they win.

The current no win no fee claims system still guarantees that claimants pay no costs whatsoever should their claim for compensation fail (including for any ATE premium cover put in place).

100% no win no fee removed by The Laspo Act

Sadly (in our view and that of the claimant personal injury sector) the Government bowed to pressure from the Insurance sector and introduced the LASPO Act 2012 (often referred to as the Jackson Reforms) effective from 1st April 2013. This changed the way No Win No Fee claims worked and who paid what when claims were won.

No Win No Fee legal services remained available to claimants, meaning that they could still pursue a claim without having the worry that they would be forced to pay expensive legal fees if they lost. However, the outcome if a claimant succeeded and won their claim for personal injury compensation was very different. The main result of these changes from a claimant perspective was that when their claim for compensation succeeded, they could no longer oblige a 3rd party to cover their legal costs in full.

To compound the problem, personal injury compensation solicitors were forced to work on a fixed fees basis and submit claims via the Portal system. This saw the fees they received from losing insurers for their legal work undertaken in succeeding with a claim reduced by more than half their previous sum, whilst their work and cost burden remained the same. As a result, the only way to cover the loss created by the new law was to oblige claimants to pay towards the legal costs when they won.

Insurers claimed that the cost burden they faced when losing a claim was too great and that solicitors were greedy, charging excessive costs and benefiting from encouraging claims and maximising claim settlements. As a result No Win No Fee solicitors were also banned from charging losing 3rd parties a success fee and the Government wholeheartedly agreed with the Insurance sector view that successful claimants should contribute to their legal fees.

25% now deducted from compensation

The Government decided that when a claimant succeeded with their claim and was awarded a compensation settlement, they would have to contribute a maximum of 25% of any settlement awarded to them which would be deducted by their Solicitor and used towards their costs incurred for running the claim. Further, successful claimants could no longer claim the cost of the insurance premium (ATE cover) that they had taken out from the defendant insurer and would now be obliged to pay that cost from their settlement in addition to the 25% deduction from their settlement award. It should be noted however, that the specialist partner Solicitor firms who pursue the claims Direct2Compensation claimants, work hard to minimise the deductions from claims.

Why did they do it?

The Government took the view that by changing the law relating to No Win No Fee claims for compensation and obliging a deduction from any successful claim, that they would achieve one of the insurance industries key goals – to reduce costs faced by the insurance companies, who form the vast majority of defendants in personal injury claims. For years, the insurance sector via their public mouthpiece, the ABI (Association of British Insurers) whose members had to pay the injury compensation settlements, special damages claims and legal costs when they lost a claim, had decried the ‘unfair’ burden placed upon them by what they labelled extortionate costs caused by the compensation culture sweeping the UK. Of course, the reality was that there never really was a compensation culture, it was just people exercising a legal right to pursue a claim for compensation when they were injured because of the negligence or actions of someone else.

It is interesting to note also, that during this same period when insurance companies decried their cost burden and tried to place all claimants in the ‘trying it on’ box, that their profit margins continued to rise as did the premiums that they charged to motorists, businesses and organisations. In a bid to further increase their profits, they convinced Government to agree that successful personal injury compensation claimants should pay towards the cost of the claims process. As a result, the Government amended the law so that successful No Win No Fee personal injury compensation claimants were obliged to contribute up to 25% of any compensation settlement towards the costs of the claims process as well as paying for any ATE insurance cover from their settlement. Government framed this change as being a move would benefit the wider consumer public as insurance premiums would decline, saving us all money. The Insurers promised that they would pass on the benefit of reduced costs to them by reducing insurance premiums for Motor, Public Liability, Employer Liability and many other insurance policies.

To summarise, the 25% deduction from compensation element of the LASPO Act 2012 and personal injury compensation claims after 1st April 2013, was brought in to reduce the costs faced by a losing insurer. It’s interesting to see that despite their promises and the lower cost burden that they now face, insurance premiums have not reduced in price. Indeed, premiums have risen way above inflation and profits have followed suit.

It’s still worth claiming

Regulated, compliant personal injury claims management companies such as Direct2Compensation and the expert personal injury compensation solicitors with whom we partner fought hard against the introduction of the new regime. Those of us who work in this sector could see that the changes were inherently unfair and in the favour of the huge insurance firms. Alas the Government pressed on. So whilst it isn’t fair, it is the system in which we are obliged to work. Losing 25% of a claim settlement and having to cover the cost of insuring the claim against failure (ATE), when the whole point of making a claim is because you’ve been disadvantaged by someone else’s negligence is far from ideal, but getting 75% of something is better than 100% of nothing. We fully believe that it is still worth making a claim and the new system just further enforces the point that it is vital to maximise any claim settlement.

ATE premium costs cannot be recovered so must be paid by successful claimants, but only if a claim is won. It is important to remember that ATE cover only needs to purchased if a claimant does not already have suitable cover. Suitable existing cover would be ‘legal expenses insurance’ – also known as BTE (before the event) insurance. It is important to discuss this with your Solicitor before asking them to provide ATE cover for you. Many people have BTE cover already and it can be attached to motor insurance policies, home & contents insurance cover, financial products such as credit cards or through union membership. If you would like to find out more about ATE & BTE insurance cover, please contact us or ask your Direct2Compensation specialist solicitor.

190 questions have been answered on this subject, why not ask your own?

Request a call back

Use the form below to request a call back from one of our personal injury advisors.

Ask a question Cancel reply

Questions

Read on for questions and advice about claiming...

My children dad died in a RTC – claim was valued over a 100k for my children – now insurance are saying we will not win as was going over speed limit and offered 35k final offer – or go to court – so accepted the 35k reluctantly and now I find out 25% of this is to be took away and £1650 for ATE insurance so almost 10k taken of the children are both still in school one primary one high – can they take this much from a childrens claim – I thought it was recovers from the other side – the claim was made in 2020 but I was not really taking in everything with what had just happened a few months earlier – do I just have to hand over 10k as I really do not feel as if we won the case either

Have the Police confirmed that the speed limit was being exceeded at the time? Also, have they confirmed that the fault for the incident rests with the 3rd party?

We were in a non fault rtc and have made a personally Injury claim with our insurers recommended solicitor.

I have been awarded £1261.64
This includes travel expenses, physio costs and whiplash.

The solicitor is deducting 25% of that total which is £315.41

This then leaves £946.23

The solicitor then wants to deduct the physio costs from that leaving me with a grand total of £618.23

Are they within their rights to deduct the 25% from my travel expenses and physio costs? Then to take the full amount of physio costs back off my final amount?
For example, if they had paid the physio costs before deducting the 25% I’d be over £80 better off. It makes no sense

When was your accident? If it was after 1st June 2021, you will be on the new scheme where claimants are facing much reduced settlements. If the accident was before that date, the settlement seems too low and the amount deducted seems unfair.

You mention that your Solicitor arranged the physiotherapy sessions – did they give you warning that part of your settlement would be deducted for the costs? You should question them on this point and ask if they receive any commission for referring you to the medical provider.

Hi when you win a personal claim what percentage do you pay all together?

In terms of the level of a % deduction that a claimant will ‘pay’ should they succeed with their claim, it will depend on the nature of the agreement that they have signed with their Solicitor or claims company.

With our Solicitors, they operate on the basis of no fee if there is no success and for personal injury claims, there is no more than 25% of awarded damages that will be deductible (in matters for work related stress compensation, that will increase to up to 35% due to the complexity of such matters and the amount of work required).

I was a passenger in a RTC. we were hit from behind and I got whiplash snd had to go to the doctors. I was contacted by the drivers insurance solicitor who said they would deal with my claim and it would cost 30% of the claim. They have been useless and it has taken a year to get an offer of £360 plus £480 that they said I had to pay for the chiropractor that there doctor said I needed. The total with what I had to pay out was £480 and the total offer is £840. The solicitor is saying they are taking 30% of the full amount including day I had to pay myself to the chiropractor. Surely this is not right as they told me I had to pay it and now want to take 30% of they money I had to pay out leaving me £144 out of pocket.

Sadly, the outcome you have received is exactly the outcome that the claimant side of the personal injury compensation sector predicted would happen when insurers convinced the government to change the way that whiplash and soft tissue injury claims arising from road traffic accidents were handled. The changes that came in to effect on 1st June 2021 meant that Solicitors would not be able to recover legal fees on any claim for soft tissue injuries after a car accident unless the claim value exceeded £5k. Sadly, the likelihood of any whiplash claim reaching such a value (typically they were previously averaging around £2-£3k) meant that claimants could no longer instruct a firm to act on a No Win No Fee basis without agreeing to having a considerable amount of their damages kept for legal fees if they won. Further, the value applied for injuries were lowered considerably, meaning that where a previous claim would have been valued at £2k and the majority of legal fees were recovered (so a claimant would pay no more than 25% of any damages towards costs) would now be valued at £400-£500.

As a result, we as a company will not handle any soft tissue rtc claims as it is not viable for us and it is not fair on claimants.

The insurance industry said that they would reduce insurance prices considerably as a result of these changes, but have they? (we all know the answer)… So with their massively reduced costs on soft tissue rtc claims, insurers are now profiting massively from insurance premiums.

Thank you very much for taking time to reply. My main issue is that the solicitor doctor recommended my to have 6 sessions at a chiropractor and the solicitors said I had to pay for it and send them the receipts. I had 6 sessions costing £80 and the solicitors now say they are taking 30% of the money they told me to pay for a chiropractor. Surely they cannot take 30% of money they asked me to pay out for treatment so they didn’t have to arrange it themselves?

I would attempt to speak with someone senior within the firm in question to discuss this point. Whilst Solicitors may take a deduction from the special damages element of a claim, many will seek to avoid doing so wherever possible and it could well be that they agree to waive any deduction from the medical costs part of your settlement.

Involved in RTA 2014, other parted admitted liability. I sustained injury to different parts of my body neck, arm, back and a few days later my ankle started playing up and a couple months later it was diagnosed as having sustained damage to two places (ankle and upper part to my foot). I am no longer able to wear high heels. Damage contributes to arthritis to other side, right hip issues causes me to be unbalanced if I attempt to walk quickly or carry items over 3kg, making me fall. I am on ESA & PIP because of issues with arthritis at time of RTA, My Insurers put in a claim for £25K after 1st offer of £5k. Supposedly lodged in court but I have no proof. They are pushing for me to accept £25K. I believe it should be more as my GP has referred me to the Orthopaedic. Should I hold out for more and how much if so?

Have you had a consultation with a medical expert in respect of them providing a detailed prognosis of injury report to your Solicitor for the purposes of your claim? If so, the contents of the report along with relevant medical records should then be sent to Counsel for appraisal and they will give your side an opinion on appropriate settlement values.

My Insurance company sent me to 2 separate Consultants who have underplayed the extent of the injuries that I continue to suffer from, with both saying that recovery should happen within 6 months and that I would be ok. One of the Consultants basically that I was feigning the pain. I got my GP to send me for an MRI which showed that I have x 2 Lesions on my foot. The Insurers are saying that because I had not informed them of about my foot at the outset, the 3rd party Insurers are likely to pay out less than the £25k (which they say I should accept). I have given away loads of shoes and have a wardrobe full of lovely shoes – virtually new – that I will not be able to wear because of the damage to my foot.

This is a frustrating situation, but without the appropriate medical evidence in place it is hard for your side to fully fight your case. Have you asked the Solicitors to return to the Consultants you have seen to ask them to reconsider their reports and provide a more appropriate prognosis?

Hi I was a passenger in a car the other party accepted liability, straight forward case, yet it’s been over 2 half years my solicitors have informed me that they are charging on top of 25% vat on top also vat on ATE policy, basically on everything there adding vat – can they do this?

If you are not happy with your Solicitor and their conduct during the handling of your claim, it is important that you let them know in writing. You may find that this resolves the problems, but if not, make a formal complaint and you can then escalate that to the legal ombudsman should you need to do so.

My son has a claim which started in 2012 and so receives all compensation. However I ame xtremely unhappy with my current solicitor and have been looking for a new one. If I change now I can be charged upto 15% should I stay where I am or move. How will this affect how much my son receives in total

A new Solicitor should be able to run the claim on the previous system (which would see no deduction from settlement). However, switching Solicitors is far from straightforward – more-so for a new Solicitor rather than the client. This is because of the lien cost requirement issue.

I am starting a no win no fee claim I am concerned and confused if I win the claim and the amount of compensation does not cover the cost of solicitors do I have to pay the difference? Many thanks

Make sure that you are careful in your choice of which firm you will instruct to act for you. However, any decent specialist Solicitor will ensure that you sign a No Win No Fee instruction (Conditional Fee Agreement) that guarantees that you’ll never pay any costs if you are not successful and that you would contribute NO MORE than 25% of any awarded compensation towards costs if you do win.

Our specialist Solicitors operate on a No Win No Fee basis that will not require you to sign up for costly insurance that you would have to pay for if you succeed with your claim and will deduct on the minimum from any settlement should you succeed, capped at 25% of the total award – inclusive of VAT. As an example, if a claimant were to achieve settlement of £10,000 the minimum that they would receive would be £7,500. If you would like to use our excellent No Win No Fee service, please call us on 01225430285.

Does the claimant get 75% of the final award even if it’s not a no win no fee case?

If a claimant has instructed a Solicitor on a private client basis (in that they are agreeing to pay their Solicitors costs regardless of the outcome), they should retain all compensation.

Myself my Mother and Father were involved in a hard rear end smash while waiting at a junction. The lady who crashed into us admitted liability straight away. Her insurance company have confirmed this. We have two lots of dash cam footage. We have all suffered back injuries. The insurance company have sent out Solicitors papers to sign which I think is a no win no fee which states a maximum of 40% will be taken out of the claim money and I think 20%VAT. So it seems not worth bothering with. Do you think I should carry on with this claim?. Many thanks

The potential deduction figure you have been quoted is ridiculous and you should not instruct any firm who would take over half of your settlement. You should sign up with a firm that deducts no more than 25% of any awarded damages.

Hello

MY personal injury claim was settled in September 2021 for £10,000 (net £6900 once the success fee and ATE premium was deducted by the solicitor).

A few weeks later I received a sum of only £2900, and was informed that the solicitor was holding the remaining £4000 having interim billed me on account of the basic costs and disbursements of the claim. The solicitors have requested the other party to make payment in respect of the claim to cover those disbursements and costs , and have indicated that, only when the other party makes such payment, they will be in a position to forward the remaining compensation of £4,000.00 due to me.

I have two questions:
1. I have not had any sight over the actual incurred costs of the claim – how do I know whether this amount is accurate?
2. Additionally, are the solicitors permitted under conduct rules and accounting rules to withhold part of my compensation award as recourse for the unpaid costs from the other party?

You are entitled to see a full breakdown of the costs in your claim and should request the same from your Solicitor. The Solicitors are entitled to hold funds in lieu of receipt of their costs from the defendant if the terms of the Conditional Fee Agreement you signed with them allows them to do so.

Hi my personal injury claim was settled in April 2017. I paid 25% to solicitors but I did not know, nor was I asked, whether I had LEI. If I can prove I had LEI is there anyway to claim back the 25%?

Many thanks Cherry

The 25% deduction is not linked to LEI cover, so whether or not you had LEI, that is unlikely to be relevant to the Solicitors deduction of their fee. However, if you were never asked about existing LEI cover and your Solicitor ‘sold’ you an ATE policy that you had to pay for when your claim settled – whether part of the 25% or (as is most likely) an additional deduction and you can demonstrate that you had existing LEI cover, the premium you paid for the ATE cover should be refunded.

Can my lawyer take 25% of my award if that is way more than his costs actually are?

The amount that your Solicitor can deduct should not exceed the total of their own costs.

why is the motor insurance co. who I have paid for legal cover as part of my policy, not footing the bill for the conditional fee?

Whether or not your existing legal expenses insurance would cover the potential deduction of up to 25% of any settlement for a Conditional Fee Agreement based personal injury claim, will depend on the type of cover you have.

i applied for a cfa that states 25% cap but then goes on to say if the compensation payout does not cover the cost of all costs incurred then any shortfall would be payable. A payout was made but numerous purchases made by the firm costs and disbursements was greater than than the compensation. we got no payout and a bill for £5000 is this legal even though we signed without realising the extra clause small print, this clause gave them an open cheque at £220 plus vat per hour, surely you cant win but effectively lose with £5000 costs on top, how do i avoid being taken to court to pay up, how can i get out of having to pay.

The scenario you describe does not sound correct and further clarification should be sought. It may well be a good idea to refer this matter to the Solicitors Regulatory Authority in order that this matter can be investigated.

Hi,

I was involved in an accident which took place on the motorway where the other vehicle hit me from the back. The other party has accepted liability and my solicitors have said they made a global offer to settle the claim however they still want me to pay the full physio costs. Is this correct?

A global offer will see a claimant receive a sum of compensation to cover their settlement figure, legal costs and other fees (including rehab fees), so it would be correct that from whatever sum received (if you have agreed to it), you would pay the relevant fees from that.

Can you tell me why I am being asked to pay for the cost of physio, I received after a RTC, surely the guilty party’s insurance should have to pay these costs not me?

There are two ways in which rehabilitation or physiotherapy costs are paid by defendants. The first (and more straightforward) method is for the defendant to agree to a certain amount of treatments and they then pay the costs directly to the provider. The second method is that a claimant will obtain treatment their compensation settlement will include an element that they then have to pay for the therapies that they have received. It would appear that this is the way it has been handled in your case.

Hi do you have to pay the 25% on your loss of earnings, damage to tools and paying for medication, or just personal injury part?

Most Solicitors will wish to ensure that the claimant is not faced with unreasonable charges and whilst the 25% deduction will come from the total claim – including loss of income/special damages, it is common that the monies recovered for lost or damaged equipment and medical costs are left undeducted.

Dear Ian,

Thank you for providing this wonderful resource and your expertise. It has been a very interesting read.

I pursued a ‘No Win, No Fee’ claim after a car accident. I took out ATE insurance with the Solicitor and was advised that after the unsuccessful claim was closed that there would be no fees to pay due to having this ATE insurance.

I have now been advised approximately 9 months later that the After the Event insurer has refused to pay out on the insurance policy and thus I am liable for a ‘Medical Report Fee’ and an ‘Expert Addendum Fee,’ within 14 days.

Is this enforceable and what recourse do I have from here? At no point was I informed that fees may be due after an unsuccessful claim.

Chris

Have you referred this back to your Solicitors? You should not have to pay any costs for the ATE if your claim failed – so long as you were not found to have acted dishonestly or fraudulently.

Hi. I have an ongoing claim with express solicitors in manchester and they are charging me 33 per cent. Also their hourly rate is 360 pounds. Is that legal?

If the percentage amount to be deducted on success was explained clearly at the outset and you have signed to consent to such a fee, then the Solicitors are acting legally. Morally however, their conduct is questionable! Our Solicitors cap deductions on success at a maximum of 25% of any awarded damages.

The hourly rate issue is not something that would be of concern.

Hi, I have a claim which is nearing completion after getting knocked off my push by a car which had cut a corner on a junction. My question is do my solicitors take their cut out of my special damages ( bike,helmet, loss of earnings etc) aswell as my injury compensation.

The deduction that a Solicitor will take from your settlement will include the full settlement. However, if there is an element of settlement for future loss of income or future medical costs, that element should be left intact.

I could not work out how to reply to your response to my query earlier, so using this method!
Just wanted to say THANK YOU for responding with a clear answer. I have relayed your feedback to my aunt and suggested she considers using your services. Thank you again!
Chris

No problem – we’re more than happy to help and answer any queries or concerns that your Aunt may have about the claims process – whether she chooses to instruct our Solicitors to act for her or not.

I was in an accident and have been offered an £1800 settlement. My solicitor is trying to take 1400 and give me £400! Is this even legal? I’ve been reading that they can only take 25%? Thanks in advance for your advice.

You will need to refer to the initial conditional fee agreement that you signed when instructing the firm of Solicitors to act. Whilst our Solicitors will deduct no more than 25% of any total settlement, some others will have terms that enable higher deductions.

Your Solicitor should be able to give you a copy of your initial terms of engagement and a breakdown of the costs and why they are deducting the sum that they seem to wish to deduct.

Could you please advise in this case. My wife claimed for personal injuries as a result of the car accident, the defendant admitted liability. We then we got a letter from our solicitor that stated that the shortfall in costs is greater than 25% of the settlement for the injuries and that she is therefore not entitled to a refund.

You need to check the terms of the No Win No Fee agreement that was signed at the start of the claim to confirm the maximum deduction the Solicitor could take from settlement. So long as this stipulates the 25% success deduction, you must then refer the Solicitor to those terms.

My wife is in the process of obtaining a final settlement for personal injury claim for £30,000. I have been told we will pay up to 25% of the total.

What is the procedure for her to question the percentage (if they charge that amount). I gave the solicitor witness statements, photographic evidence (before and after my wife’s fall) and a full diary documenting the care needed over a period of 4 months. The defendant admitted liability, so I do believe that I made the claim a lot easier to resolve work wise for the Solicitor.

Depending on the terms of the Conditional Fee Agreement that your Wife signed when instructing her Solicitors, the Solicitor will be bound by what they can or cannot deduct.

Whether or not the Solicitor is willing, or indeed able to reduce the % deduction figure at this stage is unclear, but you can have that conversation with them.

You can ask the Solicitor for a written breakdown of their total costs and disbursements (the disbursements should be recoverable from the defendant in most cases), so that you are aware as to the maximum that they may deduct from settlement (the Solicitor cannot deduct more than their total cost).

Hi could I please ask a question if you win your case for personal Injury or they settle out of court do you receive 70% of your compensation and the solicitor gets 30% . As per the CFA ? The success fee is this included in the final compensation payout (30%) or is the success fee paid out separately? I have been made an offer of say £27500 the solicitor have taken 30% leaving me with £19250 final settlement but then they have claimed well over £25000 for their costs etc and that leaves the solicitor with a very large chunk of the payout Infact more than me . My CFA stated I would receive at least 70% damages so that means they’re took 30% but my success fee says 25% is this separate or does it mean on the whole payout ? So sorry about all the questions I’m so confused . If you can offer any explanation I would be most grateful.

Thankyou for your assistance with my enquiry

Karen

Depending on the terms of the CFA you signed with the Solicitors you have instructed, the total deductions for success should not exceed 25% or 30%. Our Solicitors offer CFA’s that guarantee that our claimants will face a deduction of no more than 25% of their compensation if successful in their claim. Although in rare cases, a client may also have to repay an ‘After the Event’ insurance premium if they succeed, but our Solicitors do not recommend such cover is taken on a routine basis.

Given your comment, it would appear you may have instructed a Solicitor on the basis that they may deduct up to 30% of any total settlement. It is worth noting that this is not illegal, so long as you have been advised of this with clarity at the outset and before you had signed their instructions. It is also worth noting that your Solicitor cannot deduct more than their total costs as the deduction is capped – in this case, either 30% of your total settlement or the Solicitors total legal cost. Whichever is the lower of the two.

Hello, some solicitors claiming 35% as per Conditional Fee Agreement, is it legal? many thanks

Yes, it is legal – so long as it is explained in full BEFORE any agreement is signed. Whilst it is legal, there really is no need for such a deduction to be made. With our Solicitors, the maximum success fee deduction is 25% of total settlement and in the vast majority of cases, there will be no recommendation to take ATE insurance either, so you won’t have to repay the premium price for such cover on settlement if you succeed with us either.

When seeking a specialist No Win No Fee Solicitor, it is wise to shop around and make sure you don’t agree to any deduction higher than you need to.

Hi Ian,

Thanks for the the info. I was wondering if you could help me with a question.
I have to pay to my lawyers nearly a 50% of my total compensation in non recoverable cost. This nearly 50% includes the succession fee. I thought they couldn’t take more than a 25% of my total compensation but apparently that ‘limit’ was just for the succession fee.
I’d like to know if what they are doing is right because frankly I find the non recoverable cost very high and unfair.

Thanks in advance for your help.

Kind Regards,

Cristina

Much will depend on the agreement you signed to formally instruct your Solicitor to act at the outset. Have you checked the CFA that you signed at the outset?

50% is unreasonable and you should formally complain to the Solicitors about such a deduction and the lack of clarity in their paperwork at the outset.

Hello
The 25% for the no win no fee solicitor companies are these including vat or does the injured person has to pay vat to the solicitor on top there so would loose another big chunk?

Thanks

The VAT should be included within the deduction.

Hi a drunk driver crashed I to the car behind me then he crashed into me
I had my two grandchildren in the car with me the drunk driver ran off and claimed his car was stolen but the police now say he has admitted driving while drunk so I claimed through a no win no fee company for injury for myself and my grandkids so we have now been offered a settlement for my two grandchildren

My question is I know we have to pay 25% but do we have to also pay £280 ate for every person in my car ( each time time for the three of us ) that’s paying it three times?

There would appear to be no need for you to all have ATE insurance. If you all have it, you’ll all have to pay the premium. Given the accident scenario, I would be minded to go without such cover as it is unlikely to be of benefit.

Hi team,

If a person admits liability to the police about a dog attack on me, can I pursue the claim myself for personal injury and just get hourly legal advice where required? 25% fixed fee on a straight forward case seems crazy. Is contacting their insurance directly a bad idea?

Thanks

The benefits of having any claim for injury compensation handled by specialist personal injury Solicitor are clear. Although the 25% deduction at the end of settlement is a possibility, you must remember that the deduction should be UP TO 25% and not necessarily 25%. The deduction is capped and the deduction must be a maximum of 25% of any awarded damages or no more than the total of your own Solicitors legal costs – whichever is the lower. A specialist Solicitor will ensure that your legal rights are upheld and that your injuries are properly accounted for along with any losses or costs incurred as a result of the injuries sustained. Therefore you’ll be sure that any settlement will be maximised in your favour. There is a misunderstanding in the wider public regarding the amount of fees specialist personal injury compensation Solicitors obtain when acting on claims. Firstly, on a No Win No Fee basis, Solicitors won’t receive any costs if they don’t succeed with a claim and they absolve the claimant from facing liability for defence costs in such a situation. Secondly, due to Government changes to the legal system regarding personal injury compensation, specifically Solicitor fees and how much liable Insurers must pay, Solicitors are now forced to act on very limited fixed fees with the defendant insurers and have been forced to have to take a deduction from claimant settlement as the Insurers argued (successfully) that a successful claimant must contribute to their own legal costs.

You can of course represent yourself and enter in to a claim directly with a 3rd party insurer – if you know their details. However, you need to remember that the defendant insurers will have legal professionals in place acting against your claim.

If a person admits liability in police interview for a big bite attack, should the solicitor reduce the 25% fee as there is less risk in the case?

If you are referring to a Criminal Injuries Compensation Authority (CICA) claim, the Solicitor cannot recover ANY fees whatsoever from the CICA. Therefore, their only source of income would be by succeeding and obtaining 25% of the claim value. As such, it is unlikely to be viable for the Solicitor to reduce the fee on such a claim.

Can’t they claim from insurance the costs if they win?

Claimants can no longer recover all of their legal fees if they win their claim. As of 1st April 2013, when the LASPO Act 2012 came in to force, claimants must contribute to their own legal costs. This is capped at a maximum of 25% of their awarded settlement or the total of their own Solicitors costs (whichever is the lower). Furthermore, claimants can not recover the cost of ATE insurance either.

Do personal injury solicitors minus the 25% fee first and then the ATE premium? OR
Do they minus the ATE premium first the the 25% fee?

Because if they took away the ATE premium first, it would be beneficial to the claimant.

The ATE premium will be deducted from the total settlement value and the Solicitor can then deduct up to 25% of the remaining settlement.

Remember that the deduction % is capped and cannot exceed the total of the claimants own Solicitors costs.

Hi, im currently pursuing a claim for a car accident For loss of earnings and injury, Does the 25% fee come off the total claim or just the injury claim? Will i have to pay 25% on loss of earnings?
Many thanks paul

The 25% deduction will come from the total settlement. That would include previous loss of income or other costs. However, should any element of the settlement include future loss of income or future medical/rehabilitation bills, there should be no deduction from that element.

Hi,
I have been contacted by a company today called visible legal about claiming back fees that a solicitor acting on my behalf last year may have taken off my settlement figure ( car accident). This caller claimed the solicitors are paid by the third party and there is 25% of final settlement set aside for me. They were asking me to sign some documents re this. Is this a scam?
Thanks in advance,
Nicola

It would appear to be an illegitimate call that you have received. The Government changed the laws and systems relating to personal injury compensation in 2013. Prior to that, a claimant would pay no costs if their claim failed, but could recover ALL of their legal fees on top of any compensation if they won – therefore retaining 100% of any compensation. The changes implemented prevented a successful claimant from recovering all of their costs from the defendant and also reduced the amount that Solicitors could be paid for their work. This led to the requirement for claimants to contribute up to 25% of any compensation awarded to them towards the costs of the claim if they won. So long as your Solicitor informed you of this at the outset and it was stated clearly in the Conditional Fee Agreement that you signed to instruct them, they have acted correctly and there will be no fees to recover.

The only caveat to this would be the way that the 25% deduction is capped. The deduction must capped at the lower of one of two criteria: Either 25% of the total awarded settement or the total of the claimants own Solicitor cost as a Solicitor CANNOT deduct more than 25% of the awarded settlement. As an example, if a claim settled for £20,000 and the claimants Solicitors costs were £6,000, the Solicitor could only deduct 25% of the total (£5,000). If the Solicitors costs had only been £3,000, the Solicitor would deduct less than 25% as they could only deduct £3,000.

Does the Solicitors have rights to take 25% of my losses and injury or just the injury?

Your Solicitor can deduct up to 25% from the TOTAL settlement. In most cases, it is only future loss of income that cannot face deduction.

Hi Ian
I was involved in a no fault accident with the other side accepting full responsibility. 2 weeks after the accident I applied for personal injury damages and explained that as the other side had already accepted responsibility a “no win no fee” arrangement did not seem correct. The large legal firm would not move except to say the 25% is a maximum. The case is over and they have charged the full 25% deduction and the ATE insurance. Do I have claims for a reduction? I have tried to discuss but they will not move.

If the Solicitor that you instructed failed to advise you that you would face an ATE deduction (if successful) as well as the 25% deduction, they should – at the very least – be forced to waive the ATE premium fee as you have not been advised of it – or agreed to it.

If you have not already done so, you could raise a formal complaint to your Solicitor (check their website for their complaints procedure policy). If the complaint fails to resolve the matter, you could then escalate it to the regulator and legal ombudsman service.

Is the 25% of a successful claim negotiable and, if so, at what point would it be agreed? Also, is ATE insurance compulsory and do you have to purchase it through your solicitor, or can it be bought independently?

The 25% fee can be negotiated as it is not set in stone, but in the majority of cases, a Solicitor won’t be able to move on that due to the costs restrictions put in place by law that can make working on personal injury claims on a No Win No Fee basis financially unviable for a law firm. However, before you sign any instructions for a Solicitor, you should ask about the possibility of a reduction. With our Solicitors, if they can do anything with the 25% deduction, they will.

As for ATE, it is not compulsory and can be purchased individually – although that is likely to be more expensive than getting it from your Solicitor. The majority of our cases no longer see any recommendation of ATE cover.

If I make an insurance claim the solicitor gets 25% of my claim amount? They shouldn’t be charging VAT as well as the 25%?

Your Solicitor will deduct UP TO 25% of your awarded settlement – although the amount that they can deduct is capped – either at a maximum of 25% of the total or up to the total of YOUR legal costs – essentially they can’t deduct more than their total costs.

VAT should be INCLUDED in any deducted amount and not added on top.

If I win a case on a No Win No Fee (25% deduction) agreement, do I have to pay any extra costs if the claim value is not enough to cover the Solicitors costs plus the Doctor appointments etc? Or does the 25% deduction cover everything, insurance inclusive?

You should not face losing any more than a maximum of 25% of your compensation settlement (including VAT) towards the costs of the claim. The only other contribution you can face is if your Solicitor has advised and put in place ATE insurance cover for your claim – in which case you cannot recover the costs of that premium. ATE costs usually are around £150-£300.

My daughter and her sons were involved in a motor accident 3years ago and claimed against the person that hit them. We have been informed that my grandson has been awarded £800 compensation but after the solicitors take out 25% plus ATE he is left with just 375 which seems wrong. Is there anything we can do about this ATE payment?

That would appear to be an excessive deduction from the compensation and should certainly be complained about to the Solicitor practice in question. If you were not advised as to the cost of the ATE cover before it was provided, there is every reason to have that fee waived and not deducted.

I got injury compensation my solicitor deducted the 25% as agreed and then also deducted money for cognitive Behaviour Therapy, Occupational therapy, medicine reviews that my solicitor had asked me to attend. I didn’t know anything about paying these bills until now. Is this right to deduct this money?

You need to check that the settlement provided by the defendant accounted for these costs. Sometimes, a defendant will settle rehab costs directly and in other circumstances, they may add the cost of the rehab therapies to settlement and the client must then meet the cost.

I wish to accept my offer on a whiplash claim, but my solicitor is telling me that out of my claim they will deduct ‘X’ amount for the physiotherapy that I received. Is this correct? I thought that I got 100% of my money?

Depending on the agreement you signed to instruct your Solicitor, the maximum you should contribute is up to 25% of any awarded settlement. However, in cases where the defendant has allowed a sum for physiotherapy that has been provided, the claimant will have to pay that back to the therapist who has already provided treatment. To clarify what you should face in terms of any cost, ask your Solicitor for a copy of your initial agreement and a written breakdown of their costs/your deductions.

Hi I’m in the process of a rtc claim that the third party has accepted liability, the accident took place right outside of mu home causing damage to front wall so solicitors have asked for quotes to repair damage. Do they then take 25% of the whole claim including the repair work or just the personal injury settlement amount?

We can only speak with certainty on the personal injury element of the claim you mention and the framework for that would be a maximum 25% deduction of any awarded settlement.

If the claim for the damage to the property is also being dealt with on a No Win No Fee basis, there could also be a deduction from that but we would have thought your Solicitor could recover their costs for the work on that element of the claim if pursued separately and that would mean retention of 100% of the total in that element of the claim.

As always, you should speak to whichever law firm is representing you.

Just wondering if my no win no fee claim deduction is right? My Solicitors say that it will be 25% plus vat, but I don’t no if this is right? My claim is estimated at 325k to £52k, but I have managed to get them down to 10% though.

The Solicitors agreement to reduce their deduction to 10% should be welcomed and will make a big difference to the amount of settlement you will receive. In usual circumstances, the deduction of 25% should include VAT and not have VAT added, but you should check that with your Solicitor and the agreement you signed with them at the outset of your claim.

Hello, is there anyway of claiming the 25% back of the solicitor?

In certain cases, some claimants may have a pre-existing insurance policy in place that would enable them to recover any deducted compensation, but in normal circumstances (due to Government changes to the laws regarding personal injury compensation claims effective 1st April 2013), claimants have no option other than to contribute to the costs of the legal process. Whilst this doesn’t seem particularly fair (and those of us on the claimant side of the personal injury sector fought against these changes), the fact is that Solicitors are now receiving far less in terms of fees for the work that they do – even with them having to deduct up to 25% from a claimant settlement.

Can you tell me is the rate of 25% on a no win fee the highest amount that can be charged as I have seen some company’s charging 40% Thankyou .

Firms may charge more, but it is a rarity for any firm to do so and claimants should not be asked to contribute such a high deduction from settlement. The standard legal requirement is a deduction of 25% (including VAT).

Hi, I’m happyish with the 25% payment, however the claim we have underway also stipulates “disbursements” will also be deducted but does not state what these will be. I understand they cover many things but it seems very vague, will they be considered in the final total or an additional amount we pay?

This usually means that a Solicitor ‘may‘ have to deduct disbursement costs from a settlement but only if the legal costs that they are able to recover on success have yet to be forwarded. For example, if a client settlement is paid, but the legal costs are not forwarded, a Solicitor may take the costs that they have incurred from the settlement and then reimburse the claimant when their legal costs are also forwarded.

Essentially, at the end of the process, you should only contribute up to 25% of any awarded compensation.

Hi Ian I have found the terms offered to me to take my case it says:

If we arrange a policy for you, the work carried out in arranging the same will be charged in accordance with our hourly rate and subject to the 25.00% (plus VAT) cap as set out in the CFA document. The work carried out by us before the policy starts will include explaining to you what the policy covers and does not cover, providing the necessary information to the insurer for the policy to be issued and checking the policy documentation received.

Are they allowed to charge me the vat on their 25% of the claim it mean they get all their costs paid, 25% + vat they will get more than me?

Our Solicitors charge 25% including VAT, but you will be charged what was listed in the relevant clause in whichever agreement you have signed.

It is certainly worth querying this with your solicitor.

I was told and signed in agreement with my solicitor that he would take on my personal injury claim for 25% plus £500 insurance, but now his ready to put forward a figure to the liable insurance company, he has asked me to sign excepting the condition of apart from what we have already agreed, his expenses of over £6000. The claim his putting forward is only£16000 of which he thinks we may get £12000, this will give him, roughly 75%, which to me is immoral. How do I stand.

We wonder if you may have misunderstood what your Solicitor is asking to to agree to and why. The initial agreement you signed with your Solicitor (Conditional Fee Agreement) instructed your Solicitor to act on the basis that you pay nothing if your claim failed, but allowed them to deduct up to 25% of any awarded compensation should you succeed (along with recovery of any ATE premium if you have agreed to that). That agreement should still stand – although you do of course need to question that BEFORE you sign any other document. The £6,000 figure is your Solicitors costs to date. Your Solicitor should only ask you to agree to those so that they can recover as much as possible from the defendant.

Hi, if I make a claim and win do the solicitors take 25% of the whole claim, ie loss of earnings and injury compensation?

The 25% deduction should include VAT and will be taken from the entire settlement – including special damages. However, if any part of the claim settlement relates to FUTURE loss of income or FUTURE medical costs, there should be no deduction from that element of the settlement.

Hi Ian,
I instructed a legal firm to fight a critical illness claim for me and the CFA I signed stated that the opponent will pay my legal fees if we win. The insurance firm finally agreed to a payout of the policy after some back & forth. It appears now my legal representative is withholding substantial amount of money by claiming it’s for their legal fees after deducting the agreed 50% success fee. This is clearly in breach of the CFA which says that I am entitled to recover the legal fees if we win from the insurance firm. The opponent has refused to cough up the legal fees but I will be significantly out of pocket as a result despite the CFA. I’ve complained and now the legal firm wants to negotiate. What % basis can I ask for to refund and/or what other form of redress can I get to conclude the matter? Many thanks

Without knowing the full contents of your CFA and the reasoning given for a deduction by your legal firm, it is of course, hard to advise properly. You should go in with the starting point being that you signed an agreement that afforded you a zero deduction service and that you fail to see why you should now have to sacrifice a substantial portion of your damages due to an issue that is beyond your control.

You may also wish to escalate your complaint to the regulatory authorities and the Legal Ombudsman in order that they can assist you and potentially secure you the full settlement.

My son has spoke to an accident helpline, they have sent an agreement which says they will take up to 35 percent of any compensation he receives, i think this seems a lot.

That is far too much! Our Solicitors would take no more than 25% of the compensation settlement and charge NOTHING if the claim fails. Give us a call to find out how we can help your Son make his claim for compensation.

I have just Accepted a £20,000 Compensation offer, but my Solicitor is saying I have to pay £4,000 in VAT, and the Solicitor said he is taking £8,000 instead of £10,000, Barrister £1,750 and the Doctor’s fee was £850, I have asked him for copies of Original offers but he just sent an ordinary email with the above details, sounds a bit dodgy to me.

Is this a personal injury matter? Why should you be paying VAT? You need to get to the bottom of this quickly – we would suggest complaining to the Solicitors first of all and potentially then escalating the complaint to the ombudsman.

Do you pay VAT on £20,000 Compensation?

Personal Injury Compensation settlements should not be subject to tax deductions.

Good morning today I received my Compensation check in full for my Recent car accident but my solicitors are asking for more than 25% of the value. Do I have to pay them more than the 25%?

You need to refer to the agreement you signed when you instructed your Solicitors to act for you. They should only deduct 25% from the settlement plus any ATE premium. The only other deduction could be if you have to provide some of the settlement to cover the costs of already provided rehab therapies.

Hi there i have had the help of a solicitor firm as I was involved in an accident long story short I received a cheque only yesterday for £650 and they took £3800 for fees which I had no idea about I was told they would take %25 of what ever they received I thought they claim their money off the 3rd party is there anything I can do about this?

Have you queried this with the Solicitor practice? It could be that they will be forwarding further funds to you in due course and that they have simply received part of the legal costs from the defendant (from which they can take their fees) and then the settlement balance will follow afterwards.

If this is not the case, you should immediately contact the Solicitors Regulatory Authority and legal ombudsman service and complain.

I’m currently going through a claim against the motor insurers bureau investigators and i’ve had an offer from them to settle. Now my Solicitors have said that if i take the offer, they’ll take their percentage and send the rest on to myself. When the claim first started 3.5yrs ago I was told their percentage was 25% of my overall claim. They are now saying they want 33% plus vat on top! Is this correct and allowed? Thank you

You need to refer to the agreement you signed when you initially instructed your Solicitor to act. They can only deduct more than 25% if their contract with you explicitly allows them to do so.

Hi, I am due to settle an insurance claim (after third party ran me over). They have made a part 36 offer of a global payment. Can I insist on a full breakdown instead? Can I insist third party break down this global offer to all component parts? That way I can see how much they are paying for each aspect of claim. Eg injury, trauma etc…

You can certainly ask them to do so.

Does the 25 percent come off all the money offered including that for loss of earnings?

The total deduction cannot exceed more than 25% of the total settlement (excluding any ATE policy cover). In most cases, any element of the claim that relates to future loss of income or future medical costs will not face deduction.

I have recently had an injury claim settled. The company handling the claim had deducted their fee of 25% of the compensation, but they have also taken a charge of 25% from my out of pocket expenses, i.e. treatments, costs of travel to medical appointments, is this correct?

They are justified in taking a deduction of a total of 25% (never more) from the ENTIRE damages awarded to you.

Hi i am currently making a personal claim for injury after a serious accident at work. They have given us an interim payment, they took 25% plus then charged me vat on top this, doesn’t seem right, can you help? Thanks.

You should ask for a copy of the Conditional Fee Agreement (CFA) paperwork that you signed to check what deduction you had signed up to make from any award received.

As long as the amounts deducted are accurate with regards to your signed documents, then all is fine. Of course, if the Solicitor has deducted too much make them aware and they should resolve the situation.

Hi. Apologies if this has been asked before, however my partner had a RTA in April 2018. She is using Russell Worth to make a personal injury claim in which they will take 25% of the final sum awarded. Since April 2018 she has incurred expenses including mileage claims, loss of earnings and prescription charges. Can you tell me whether they are allowed to deduct 25% from these expense claims please?

The total deduction can come from the total settlement and may also include loss of income and incurred costs. In most cases, Solicitors will do all that they can to minimise a deduction from loss of income or future medical expenses, but it really does depend on the level of damages awarded and the total costs incurred by the Solicitor in pursuit of the claim.

Is it correct that you take 25% and also take 10% from my insurance that I have making me pay twice as I pay for the insurance?

We don’t recognise the 10% additional deduction you mention. Our Solicitors work in accordance with the current legal requirements of No Win No Fee (conditional fee agreement) legal matters. This confirms that you would pay no costs whatsoever to any party should your claim fail. However, if you were to succeed with your claim, the deductions that can be taken are a maximum of 25% of any award made to you along with the need to recover the cost of any provided ATE cover (as you are no longer able to recover the ATE premium cost from the defendant). Whilst ATE premium’s can vary, a typical ATE cover fee will be somewhere between £150 – £300.

Your posts are quite informative, but I wonder whether some of what I have read may need amending?

You say that the deductions from clients is capped at a maximum of 25% from damages and that it is the lower of either the 25% deduction or 100% of base fees. But as I understand it, the success fee can be up to 100% of base fees meaning if say a solicitors fees were £10,000, they would be entitled to claim a further £10,000 being 100%. obviously if my claim settled for £10,000 then they can only tale £2500 from my damages as this represents 25% but, as I understand they could seek the shortfall because that is not capped.

The key issue here is that the Solicitor CANNOT deduct from your damages anything more than the 25% of your settlement (they will also have to deduct any premium for ATE insurance). A Solicitor may attempt to recover further fees from defendants, but they are unable to take further from a claimants award.

Good morning, I settled a personal injury professional negligence claim last year. I accepted a part 36 offer of £150000, I only received £40000 from the compensation and now the solicitors are wanting £50000 back for their costs plus interest, so the claim could leave me £10000 worse off than when I started, are their fees capped at 25% of the compensation?
Be grateful for any advice.

If you pursued your claim on a Conditional Fee Agreement (No Win No Fee) basis, your Solicitors fees and restrictions upon them should be clearly set out in the agreement you signed. Your Solicitors fees should be capped.

Your Solicitor should be entitled to deduct 25 % from all of your past losses – so that would include any out of pocket expenses incurred, general damages for the actual injury/pain/suffering, loss of earnings, care etc. When calculating the deduction our Solicitors normally exclude treatment costs and leave those 100% intact but this is optional and will depend on the nature of the claim and the work undertaken by the Solicitor.

The 25% deduction doesn’t come off any future losses – for example future loss of earnings, disability on the labour market, future care costs or future treatment costs etc – it only applies to past losses.

Incidentally, and most confusingly, the success fee is not always a full 25%. It has a double cap. It is capped at 100% of the value of the actual costs we incur, or 25% of the compensation – whichever is the lower of the two figures. By way of example, if the claim settled for damages of £20,000 and our Solicitor had done work to the value of £3000, then the most our Solicitor could deduct from the compensation would be £3000. (25% would be £5000 and so the £3k would be the lower of the two figures). Conversely if the claim settled for damages of £20,000 and our Solicitor had done work to the value of £15,000 then the most they could deduct would be the 25% at £5000.

If you have legal cover with your motor insurance, do you still have to give the 25%?

It really depends on the kind of cover you have and to what extent the cover will reimburse any incurred costs.

Many daughter has just been awarded £216000 from the CICA
Her solicitor has charged 25% for the work plus another £8000 for medical report which £750 was for a rewrite of a report when they got a two names spelt wrong.
Two questions should my daughter have to pay for the rewrite?
Secondly the £8000 for reports seems excessive as it included taxi fairs for the solicitor etc

My daughter will need support for the rest of her life and have only £147000 out of a claim of £216000 seems excessive.

You mention a very substantial settlement, so it would be reasonable to expect that some of the costs of the work involved would also be substantial. However, £8,000 for a medical does seem excessive. Whilst it could be legitimate, this is something you should query with the Solicitor and perhaps ask them for a written explanation of the costings and deductions. If you are not satisfied with their response, you could then escalate this matter and contact the Legal Ombudsman Service so that they can independently review this for you.

My solicitor has sent the details of my claim off to be valued by a Barrister before presenting it to the other side. Who will cover the cost of this? Will it come out of his 25% fee of will it be deducted from my final award? Also, any private medial consultants I have been sent to by him, where does the cost of this come from?

You will not pay a fee for the Barristers opinion and in most cases, no deductions for any medical treatment. This should all be included in the costs that you will recover from the defendant and will not be taken from your compensation. The only fees you should pay at the end if successful will be a deduction of 25% from your total award and the cost of any ATE insurance premium if you have required that (usually around £200).

The Barristers opinion is vitally important to you and your Solicitor as the Barrister is an expert and will use case law and guidelines to form a valuation range for your claim based on expert medical reports and the impact your accident has had on your life. Once your Solicitor has been given a valuation range, they will contact you to provide the details.

Thanks Ian. That clears things up. Best wishes

I have received a settlement offer from 3rd party insurance through my solicitor it says on letter that offer subject to deductions, 1 being success fee which I know and that’s fine but other is physio costs coming off the settlement offer is this right and can they do that take physio costs off my final settlement? I thought they were liable for any medical expense, confused.

In some cases, the defendant will pay rehabilitation costs as well as compensation. However, in your case they may have agreed to cover the costs of your physiotherapy as part of the total settlement value. Therefore, if they have already paid for the rehab costs, they would be entitled to deduct any previously paid costs that are a part of the total settlement from the final payment. You should of course check with your Solicitor as to what was agreed to make sure that you are not losing out.

Hi there, I had an accident on Nov 2013. My case dragged out a very long time and I’m now due payout for my compensation in the next few weeks. My contract with the solicitors appointed never references a 25% fee. Actually, it says the opposite – it says I will receive 100% of my compensation and all fees will be pursued by the 3rd party. I have also been told by the solicitors that i won’t pay any fees, however, I am skeptical. Namely, because on google reviews many many of their other clients say they were blindsided by a 25% fee despite being told they’d pay nothing. I have tried to get a confirmation in writing from them but so far, they have refused to give me any information until the payout if received. Quite poor actually and I don’t really trust that they won’t try to pull the 25% out of my comp. My question is, does the new legislation override my contract with them agreed in Nov 2013, or does what we agreed on stand regardless of new legislation? Thanks!

This is interesting and you should certainly seek advice from the Legal Ombudsman Service (and possibly the Solicitors Regulatory Authority – SRA) if the Solicitors do attempt to deduct 25% from any award made to you.

Our understanding is that if the paperwork you have signed makes no mention of any deduction from an award of compensation, the acting Solicitor is not entitled to make any such deduction from your award. If they do make a deduction of 25%, you should immediately complain to the Solicitor (look for their complaints procedure on their website) outlining that you signed terms that confirm in writing that you will retain 100% of any award made to you. If they cannot satisfy your complaint in accordance with their complaints policy, you should then raise the issue to the legal ombudsman and SRA.

Is there any way that i could claim back the 25% deducted from my injury claim i.e. through a third party?

Some people have insurance that will enable the recovery of the 25% deduction, but that is rare and uncommon. If you have existing Legal Expenses Insurance in place, you could contact the provider to see if you are covered.

I have been awarded £2,250 net compensation in a claim for ankle ligament sprain with tears in the ligament and bruising. This happened after I stood in an unseen hole in a water board grate and my foot fell into it.

I received medical treatment, had a scan and medical via the solicitors I used. I have not accepted any offers or had any correspondence with regards to offer. The solicitors are simply saying that the £2,250 is the award.

I just wondered if that also has the reduction of 25% as this was done on a no win no fee basis and if so how much was the award before this? I also thought I had to be a part of deciding what offers I take and be aware of amounts of offers made? I just wondered if the Solicitors are being honest with me about the award amount and how I go about this or does this seem a reasonable offer with regards to injury and recovery of roughly a year? It has also been 2 years since I made the claim!?

If you underwent a medical organised by your Solicitor, you should have been given a copy of the medical experts report to agree or disagree with before it was disclosed to the defendant insurers. Did this not happen?

When it comes to the value of a claim, your Solicitor should approach you with an offer and advise you as to whether it is fair and should be accepted or if it is unreasonable and should be rejected. With regards to the £2,250 that doesn’t seem unreasonably low but without seeing the medical examiners report, we cannot say for certain whether you should have received more or not.

You need to query with your Solicitors as to how this value has been reached – has there been a Barristers opinion sought in this matter?

My solicitor advised me not to accept an offer from the defendant now they are saying I am going to end up with 20 thousand of costs (this is not a print error) my AET insurance is refusing to pay my costs because the defendants expert says I’m lying about my injuries (I wish I was) even though I have 5 experts that agree about my injuries, my solicitor said I only need to be worried about the amount of compensation I receive, now I’m looking at over 20k worth of costs due to his bad advice. I’m so worried he also said that if I lose in court I could go to jail, so I was scared and accepted an offer out of time. I’m so worried about the costs I just don’t know what to do.

If you are acting honestly and have not committed any fraud, you will have no risk of jail so please do not worry about that. If you have 5 expert opinions who on your injuries and condition, the fact that the defence has produced 1 expert to contradict that should not matter.

My solicitor is claiming 3k for hearing loss charging 25% fee plus £2k ATE I’ll end up with £250 I lost 2 days pay going to appointment & hearing tests plus fuel will end up with nothing how can they charge £2k for a ATE on a 3k claim?

£2k for an ATE premium is ridiculous and needs to be questioned urgently. Are you sure this is not a typing error? You should immediately complain to your Solicitor regarding this and if they are unable to provide a positive outcome you should immediately refer the matter to the Solicitors Regulation Authority (SRA) and Legal Ombudsman service.

Standard ATE premiums range from £110 – £220 with some policies being a little more at around £400, but I have not heard of such a high premium so can only assume that it is a typing error.

I had an RTA where liability was admitted straight away in the portal. Can solicitors still claim a success fee in this case? I thought if liability was admitted them they could recover their costs from the other side in full?

Sadly not. The LASPO Act 2012 and the Jackson Reforms to Personal Injury compensation (effective 1st April 2013) mean that your Solicitor is unable to recover FULL legal costs. Therefore, if you succeed you will contribute a maximum of 25% of any award towards the costs of the claims process.

Hello, just a quick question, I had a accident in my, which was non fault. Just had offer is it right that they are taking out the physio FEES?, I know it’s right that they take ate fee and cfa fee but don’t understand why I’m paying for my physio.

You need to check with your Solicitor on this but commonly, the cost for physiotherapy or rehabilitation treatments can be recovered from the defendant as part of the settlement. This will be the case if a medical expert has included a requirement for such treatments in their report and both sides agree to this.
In your case, you should only be paying for the physiotherapy if it was something you elected to have without having an agreement in place for the defendant to cover the cost of the same.

I won a claim against my former employer. They breached their duty of care which lead me to have long term condition (tennis elbow plus surgery). Solicitors said that agreed to a settlement of £15k – they deducted their success fee of 25% plus insurance. The Solicitors deducted the success fee from original settlement and sent me my settlement with a final amount from their own company (basically of the name of solicitors) so i’ve never seen the settlement paperwork from my former employer or any other document saying that they agreed on £15k. I trusted my Solicitors.

However, after few years I heard people talking that my former employer paid £55k for me and not £15k and I really do feel that my claim was underpaid. Plus I researched about these Solicitors and they do have some bad reviews from their former employees who is saying that they do underpay claimants or claim was underpaid due to them not bothering to do the job properly. Is it possible that the Solicitors faked the agreed amount? Or maybe they did receive £55k but gave me only £15k (actually around £10k after fees) And how can I check this? Thank you.

If you have used a legitimate firm of Solicitors, you probably have no concerns but they ought to be able to clarify everything to you so that you can understand that everything is correct as they have stated.

You have 2 options here now. Firstly, you should view your Solicitors website and locate their complaints policy and then launch a complaint in order to get their explanation as to your concerns. If you are not happy with their handling of your complaint, you should immediately contact the Solicitors Regulatory Authority and complain to them so that they can investigate this for you.

Firstly what a great forum, very informative.

I have a quick question in regards to the success fee, using the expert’s example of the 25% cap whereby an award of £20,000 has been awarded on a £3,000 fee and a £20,000 award on a £15,000 fee is the figure of £3,000 and £5,000 inclusive of vat or can vat be added bringing the totally amount to £3,600 and £6,000?

Solicitor deductions must be a MAXIMUM of 25% and not more. Indeed, there is a cap as you mention. It is not allowed for VAT to be charged on top of the deduction and the explanatory note to The Conditional Fee Agreements Order 2013 states any success fee must be inclusive of VAT.

Thanks Ian, sorry I forgot to ask…. if a solicitor was to charge 20% rather than the 25% can they then charge vat on the success fee as this will still be a lesser total then the 25% cap?

I can’t speak for all firms, but those with whom we work, would never add VAT to any settlement deduction.

Hi i have won a personal claim they offered me £5000 less 25% do i have to pay the 25% as i did not use a lawyer thankyou.

If you have not employed or instructed a specialist Solicitor to act for you on a No Win No Fee basis, it is hard to understand why the defendant insurers are attempting to deduct 25% from your award as you are not claiming any costs.

Is the deduction being taken for costs or because they are holding you 25% liable for your injuries?

My husbands RTA claim was recently settled and he was awarded £2200. From this he had to pay for ATE insurance, the solicitors fee but also the fee for physio which was £500. Is that correct? I thought the defendants paid for any medical expenses?

He was also told the final amount he would receive in the bank would be £1800 and this was stated in a letter. However, they have now said the amount in the letter was wrong and it was an admin mistake. This is totally misleading, is there anything we can do?

With regards to the amount your Husband was promised to receive being written incorrectly, there may be nothing you can do about that but you could argue that you had accepted that amount and considered it ok and that if you had been advised of the actual amount being lower, you may have refused the offer and therefore pursued a claim for a higher settlement.

The fee for the rehabilitation therapy ought to be something that can largely be recovered from the defendant but it maybe that they have disputed the requirements of such therapy and refused to pay for the same. However, if it was your Husband’s Solicitors who arranged the therapy and advised that it would be paid for by someone else, you should hold them accountable for that.

Whatever happens, it sounds as if you have a valid grievance against the Solicitors in question and it would be wise to find their complaints procedure on their website and go through that process with them. If they are unable to satisfy your complaint you could then refer the matter to the Legal Ombudsman service.

I had free legal cover as part of my car insurance when someone crashed into me. I ended up pursuing a claim with them regarding personal injury. I then received a letter from a solicitors saying they had been asked to act on behalf of the insurance company. Everything goes ahead and takes 2 years to settle. There has now been an offer and the solicitors have stated they will be taking 25% of the settlement fee. I am confused as the car insurance had free legal cover and the solicitors were acting on their behalf. Any advice?

The free legal cover would not necessarily mean that you don’t have to contribute up to 25% of your award should you succeed. You need to refer to the paperwork that you signed with your Solicitor and check with your insurers to find out whether or not this deduction is recoverable.

I have legal expense cover on my motor insurance. Would I be entitled to 100% of my compensation if I win ?

It really depends on the amount of cover you have and what policy you have. If you would like our Solicitors to check out your existing LEI cover for you, we would be happy to assist.

Me and my girlfriend were involved in an accident, a car travelling at 50mph ploughed into the back of my slow moving ford transit. I have legal expenses cover, and I’m currently in the process of claiming personal injury damages, loss of earnings, damage to personal property by way of no win no fee.
My girlfriend has settled at £3000 less 25%.
Can I claim back my 25% from my insurer through my LEI?
If yes, is my girlfriends 25% recoverable also?

Without knowing the full cover that you have on your legal expenses insurance, it is not possible for us to say either way. We would recommend that you contact your LEI provider and discuss your before the event insurance with them and find out if you will be eligible to recover your 25% deduction.

I’ve been offered a £25000 ‘global offer’ less 25%. Is that right or is 25% the maximum they can take, depending on whether the costs the solicitor incurred were lower than the £6250?

After successful injury claim, 25% success fee was deduced. At the moment of accident i had Motor legal protection plan. Can i claim to be paid back 25% solicitors fee (expenses) from my Motor legal protection insurance?.My claim was administrated by different solicitors, i haven’t used my legal protection insurers services. Actually at that moment i didn’t know what is Motor legal protection, it was jus automatically added to my policy.
And now i get call from other solicitor, they want to make claim to get back my 25% success fee, but then i need to pay them 35% success fee and other disturbances from the money they manage to get back. I am totally lost, what i need to to, and i cant find any information, is that success fee covered by legal protection. Do i need to use solicitors, or just make claim myself?

You don’t have to use a Solicitor, but is often the best way to ensure that your claim is administrated properly and the outcome maximised in your favour.

In terms of your motor legal protection insurance, whether or not you can claim your 25% fee back on that will depend on the policy and what coverage you have. If a Solicitor is saying that they would like to pursue a claim on that policy, it would suggest to me that a claim would be likely to succeed and that you are covered for such matters.

Are they saying that they would deduct 35% of whatever they recover (for the claim on your 25% deduction)? If so, you should ‘shop around’ for a better price or see if you can negotiate a better rate with them.

When a claim is settled does the solicitor claim 25% of the total award including treatment fees or is it 25% of the injury award ?

It is 25% of the total claim value – but only including PAST losses – any element of the claim that relates to future loss of income or future medical costs should not face ANY deductions. In most cases, we do not deduct anything from medical expenses as we work hard to make sure that any deductions from a settled claim for personal injury compensation are kept to an absolute minimum.

Tracey just asked a question on How long does an insurer have to reply to a compensation claim?... I fractured my elbow end of September this year has I fell in a public house I've rung no win company up took my details and told me what s...
Keith just asked a question on Injury disclaimers – do they prevent the right to claim compensation?... I signed a disclaimer for cataract operation, I was told I would be able to see without spectacles but not for reading, I was happy with tha...
Dorothy McCall just asked a question on Can I be sacked for having an accident at work and making a claim?... I had a couple injuries in work from Robbery was traumatic. Company started to manage me out got the sack I believe because of PTSD it e...
AD just asked a question on Claiming compensation for pre-existing injuries made worse after an accident... Hi Ian,I thought I would update and also ask for some more advice please.Following my medical in March 2023, my pain symptoms have ...
Donna Andrews just asked a question on Is it worth making a compensation claim?... I had a trip on my landlords pavement and fractured my ankle this was in August I am still suffering and hanig treatment I don't know wjat t...