Why claimants have a legal requirement to contribute 25% of any compensation settlement towards their costs should they win their claim

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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 and could no longer recover ATE insurance premiums.

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.

Fee changes

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.

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 at Direct2Compensation, our partner solicitors 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 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.

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  1. I was in a rta with my husband 3 weeks ago my insurance have appointed a solicitor to claim for personal injury they said they take 25% which is fine as 75% is more than I had. The other driver has admitted full liability. I am unsure as to whether they can take any more than the 25% I.e costs in small print I’m not aware of I don’t want to go through with it if I’m going to end up with less then them. Would you recommend any specific questions to ask. I’m new to this never done before and am so stressed out by it all. Thank you

    • We would always recommend using an independent specialist personal injury Solicitor of your own choosing rather than simply taking the firm that your insurers recommend. Whether that be a firm like us or any other specialist No Win No Fee personal injury firm, it is important that you have control over any legal affairs relating to yourself.

      With regards to the 25% deduction, that is absolutely fine and appropriate and is in accordance with the LASPO Act 2012. The only other deduction the Solicitors can take is the cost of any ATE insurance premium if one is needed. This is insurance to cover you against losing your case – it would pay the costs of the defendant and you would pay nothing for it if you lost. However, you cannot recover the cost of this policy from the defendant if you succeed with your claim so your Solicitor would have to deduct that – usually around £2-£300.

  2. Hi, I have finally received a settlement cheque today for a car accident that happened back in September 2015. I received the settlement figure of £2650. But it states on the form of authority I signed online that ‘I will receive the global sum of this amount’ and does not include the ATE or the 25% fee deduction within the documents therefore am I not owed the full amount despite not mentioning these hidden costs in advance? On the other hand if these costs are to be deducted, they have taken off £360 for the ATE and £662.50 which makes the 25% but does this sound a reasonable amount or too much? Please let me know when you can, thanks.

    • The 25% issue sounds correct and as long as you were signed up to a conditional fee agreement that confirmed the required 25% deduction, there is no problem with that. Regarding the ATE cover provided, you cannot recover the cost of that policy from the defendant insurers if you succeed with your claim. Prior to the 1st April 2013, successful claimants could recover that cost. Sadly, successful claimants must now fund that cost from their settlement if they succeed with their claim. Therefore, 25% plus ATE premium is a standard deduction. The cost for ATE premiums varies from between £150 – £450 on average.

  3. Hi Ian my husband was hit head on by a car driver whilst he was on his motorbike 2 years ago. Full liability was admitted straight away. He had full motor legal expenses cover so no % will be deducted upon settlement of his claim. He sustained numerous injuries some still ongoing today but we are satisfied by the medical expert’s prognosis. He also suffered PTSD. So my questions we have are; today we received an amount the legal exec is suggesting for the injuries. We believe (but of course we are not experts) that she has seriously underestimated his claim. I have gone back to her requesting a full breakdown of what value she has put on each injury. Are we entitled to receive this. She has also deducted the physio and psychiatrist’s fees (over £2k) from his total claim. I am confused by this as it was the medical expert she instructed who recommended that my husband should have this and no conversation ever took place about who would be responsible to pay this. As an aside we have had terrible service from this company, not returning calls, taking on average 3.5 weeks to respond to an email and we are now on our 4th case handler. We are happy with the out of pocket side of the claim. What are our choices (if any) to ensure that my husband receives the full amount he is entitled to? thank you

    • You do need to query with them why they have deducted the £2k+ fee for pyschiatrist and physiotherapy fees without having obtained your authorisation to do so prior to instructing the experts to provide treatment. It could be that they will go on to seek recovery of those fees and reimburse you for them in due course.

      As for the appropriate value, you should be entitled to receive the Barristers opinion that would have provided the value range for the claim.

  4. 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?

  5. 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 thought 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 advise I’m so worried he also said that if I lose on 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.

  6. 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.

  7. Hi

    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.

  8. 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.

  9. Hi are law firms allowed to charge you more than 25% in a no win no fee case .It was a tribunal case for a protective award ?

    • We can only speak in terms of Personal Injury Compensation and No Win No Fee claims relating to the same. In such cases, the law allows Solicitors to deduct a MAXIMUM of 25% (inclusive of VAT) from any settlement award.

  10. 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.

  11. 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?

  12. 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?

  13. Hi,
    I have currently a claim for loss of past and future earnings against a big chemical company after developing an allergy at work due to their negligence.
    My solicitor calculated my past and future loss of earnings, but I’m not happy with this as he said if at one point in the past if I got to earn more then at the chemical company there is not anymore a case of loss future earnings. I’ve explain him that indeed I’ve earned more for a certain period of time but is not the case anymore. from 5 months ago my wages are again low.
    can I claim for future loss of earnings in this case?
    Regards,
    Marius

    • Without having full sight of the information it is clearly not possible for us to provide a qualified view. However, if the health problems you have sustained in your previous work have lead to a loss of income in the past and future, you should be able to recover the difference between your current/future income and what you had expected to receive.

  14. 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.

  15. Hi,
    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 soliciotrs were acting on their behalf. Any advice?

    Thanks

    Karen

    • 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.

  16. Hi , I have just settled my claim for professional negligence from struck out pi claim , I signed cfa , the letter of claim was £980000 , my solicitors said good prospects of success on risk assessment, 5 years on they force me to settle for £175000 , I believe very undervalued but was told if I did not accept the offer they would cancel cfa . I settled they gave me £40000 and said I have to wait upto 8 months till they can get costs from defendent before I get anymore money , but the maximum I will get will be another£38000 so a total of £78000 that is over 50% taken from my damages most of which where calculated as past loss , please help I’m at wits end thanks very much .

    • Unfortunately, we can’t really offer any advice on this issue as we do not know the full terms of the agreement you had with the Solicitor and as this was a professional negligence claim rather than a PI claim, it could be different.

      You should go through the complaints procedure with the firm you have instructed and see if they are able to satisfy your concerns and remedy the situation with you. If that fails, you could then go to the legal ombudsman and ask for an investigation to be undertaken.

    • I’m getting paid out for my claim for pi for £2650 the solicitors are taking 25% which is £662.50 but also £213.53 for ate policy is this correct I have no other losses but I thought the 25% included the ate policy.

      • You need to refer to your original Solicitors No Win No Fee agreement and paperwork. Due to the LASPO Act 2012 and the reforms to Personal Injury Compensation that were introduced, claimants are no longer able to recover the cost of any ATE insurance premium from the defendant insurers. Claimant Solicitors were opposed to these changes but the Government listened to the insurance lobby and forced Solicitors to deduct the cost of ATE premiums from any settlement awarded to the claimant.

        If your Solicitor failed to advise you of this then you may well be able to refuse to pay the same.

  17. If you have had a accident and are 100% confident it’s non fault and straight forward case do you have to pay for the A.T.E fee thank you

    • The implementation of the LASPO Act 2012 prevents successful personal injury compensation claimants from recovering the cost of an ATE insurance policy. This became effective as of 1st April 2013. Prior to this, all claimants could take out an ATE policy if they didn’t have existing LEI cover in place safe in the knowledge that if they lost they wouldn’t pay the cost and that if they won, the defendant would have to pay the cost of the policy as well as the compensation settlement.

      No claimant can be forced to take ATE insurance cover, but it would be unwise to not take such cover. Even in what can seem to be the most straight forward and strong claims for personal injury compensation cases can be lost and when a claim is lost, if such cover is not in place the claimant would have to pay the costs of the defendant. It is for this reason and to cover the risk of a huge bill that taking After the Event insurance cover is a worthwhile move.

      Whilst those of us working within the claimant sector of personal injury law were heavily against the changes required by the LASPO Act 2012, we must abide by them and as such, although it is a pity that successful claimants have to pay a fee for their ATE cover (often around £200) it is far better to have to pay that fee on success than a huge sum in to the thousands of pounds if a claim was lost.

    • 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.

  18. 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
    Thanks
    Michael

    • 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.
        Thanks
        Michael

  19. 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.

    • Iva

      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.

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

    Regards

    Kevin

    • Kevin

      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.

  21. Hi

    Could you just confirm on a win settlement example £200k
    What are the solictors allowed to take
    If you have a agreement 75% to me and 25% to them

    Thanks in adavnce

    • Immi

      Hi, you raise a good question about the level of damages that can be called in to the contribution towards the costs of the claim for a successful claimant.

      As you rightly state, the claimant MUST (by law) contribute towards the costs of the claim and this cost is taken from damages awarded but no fees are payable if a claim is to fail.

      If you are expecting a settlement value of £200k, that is clearly a high value claim and must involve serious injuries and I would expect that a large element of that settlement value is for future loss of income and past loss of income. Whilst the deduction is set at 25% (max) of the awarded settlement, there is a cap and I would not imagine that you will have to pay £50k towards the costs of your claim.

      If you have a ‘standard’ agreement with your Solicitor, they will deduct 25% from your settlement total. However, the 25% deduction will only apply to the element of the total that relates to the injury and all past loss of income and costs incurred. In this case, the deduction element would include any out of pocket expenses incurred, general damages for the actual injury/pain/suffering, loss of earnings, care etc.

      The 25% deduction cannot apply to any part of the claim total that represents any future losses – such as the amount of the settlement that is made in place of a claimants inability to work in the future and therefore future loss of earnings, disability on the labour market, the costs for any future care requirements or future medical treatment costs. It only applies to past losses.

      Importantly, the 25% deduction is often not the full 25% as the law applies a double cap to protect claimants. The deduction is capped at 100% of the value of the actual costs a Solicitor has incurred, or 25% of the compensation – whichever is the lower of the two figures. For example, if a claim settles for £20,000 and a Solicitor had done work to the value of £3000, then the maximum they could deduct from the compensation would be £3000 (25% would be £5000) and £3k would be the lower of the two figures so is the most they could deduct). Conversely if the claim settled for damages of £20,000 and a Solicitor had done work to the value of £15,000 the most they could deduct would be 25% at £5000.

      I hope that this explanation helps you?

      • Hi Ian
        Thankyou for your reply
        The firm did hold back £50k till fees where payed from 3rd party and diff i had to pay.
        I was left with £10k apprx after there deductions.
        Which looking at the bill they have taken the 25% off my full settlement.
        Could i have this reviewed by another solictor firm or a judge. If so would i need to pay for this? Or shall i contact the Fca?

        Thankyou in advance

        • Hi, in the first instance you should raise this issue with your instructed Solicitor. If you look on their website, they should have a section that explains how complaints/grievances are raised with them and this should also show how they work to resolve the same.

          If they are unable to satisfy your concerns and explain things that match with the agreement you have signed with them, you can then ask the Law Society/Solicitors Regulatory Authority to investigate for you.

          I hope that this helps

          • Hi Ian
            Just a update i tryed contacti ng my solictor no reply back from her. She got someone else to reply back to my email.
            I still was not happy with the outcome, off my charges i spoke to 4 diff solictors and i was advised that the charges that my prev solictors charges are totaly wrong, and know have to go through all this again.
            Will keep you posted.

      • Hi Ian

        Just a update looks like i have been charged to much according to another solictors firm by a fair amount. Just waiting to see the outcome.
        Will keep you posted
        Regards
        Immi

  22. my partner a self employed private taxi driver was hit by a van, non fault. the car was a cat c write off. he had another 5 years left of a really good car but had to buy a newer cheaper car as in the area in which he works, only let cars on that are less than 4 years old. he had to pay 800 towards the other car, didnt get a penny of the insurers of the guy that hit my partner and was out of pocket. his solicitor said he couldnt claim for this!. so hes is out of pocket plus the solicitor said if he had legal cover , he still would have to pay solicitors fees. he got just over 2 grand out of over three, the solicitor charged the 25% plus vat, plus ate. i an going to get him to ring his insurance again and ask for a copy of his insurance details for that year. and i am going to look at the solicitors documents if hes not lost those. i thort from the start that this guy was a pretty useless solicitor, and no honest but my partner wouldnt listen. the accident happened in nov 2015, his cheque finaly came yesterday. we have been so out of pocket for a non fault accident and ended up worse off. could you give me your opinion on this please x

    • Tracy

      Hi, thank you for sharing your situation. I am sorry to hear about your Husband’s situation and that you feel unhappy with the outcome of his claim.

      Of course, we don’t know the ins and outs of the claim here as it was not pursued by ourselves, so we can only comment generally.

      Your Husband would not be able to claim the additional costs of a new car by way of his personal injury claim as the claim made via the insurers for the damage/loss of the vehicle would cover the ‘car’ element of the claim.

      The Solicitor is correct in deducting the 25% from the settlement and is indeed obliged by law to do so. This is something that came in to force in April 2013 by way of the LASPO Act 2012. With the ATE premium, the claimant (your Husband) is responsible for paying the premium as the LASPO Act 2012 forbids claimants from enforcing the losing 3rd party to pay this fee as they did before.

      However, if your Husband did have cover in place via his motor insurance – commonly known as Legal Expenses Insurance (LEI) or Before the Event Insurance (BTE), he may have been able to use this instead of purchasing additional cover by way of an ATE policy. His Solicitor should have checked with him at the outset of the claim as to whether he had existing cover. If they have not done this (and you can prove it!), you may be able to force them to repay the cost of the ATE premium.

  23. I was hit by a taxi whilst on my push bike. I went through a no-win, no-fee solictors. The third party accepted full liability. The claim went through the small damages (?) portal and I accepted a settlement figure. From this settlement figure, physiotherapy and legal insurance fees were deducted. From the remaining figure, the solicitors took 25%.

    I was very confused about how insurance works at the time. I also was paying for push bike insurance at the time of the crash, which included legal expenses. Would/can I still claim the 25% fee and legal insurance fee back through my then active cycle policy (are these not classed as ‘legal’ expenses?)?

    • Ryan

      Your Solicitor who pursued the claim for you should have checked with you as to whether or not you had any legal expenses (known as Before the Event – BTE or Legal Expenses – LEI insurance) before providing you with an After the Event (ATE) policy.

      If the Solicitor has not done this, then they have exposed you to having to pay the premium cost that may have been avoidable if your existing LEI had been happy to insure your claim.

      I am not sure whether your bike insurance will provide any come back for you, but you should certainly ask them. In the first instance, I would ask for a FULL explanation from your Solicitor.

    • Yes the 25 % comes off the whole claim – for both injuries and all PAST losses (all out of pocket expenses incurred, general damages for the actual injury/pain/suffering, loss of earnings, care etc). However, when calculating the deduction total, most fair Solicitors (that’s us!) usually try to exclude treatment costs and leave those 100% intact. This is not always possible, but we try to protect this for claimants.

      It is really important to note though, that the 25% deduction doesn’t come off any future losses – for example future loss of earnings, disability on the labour market, future care, future treatment costs etc etc. The 25% deduction can only apply to PAST losses.

      Somewhat confusingly, the deduction, commonly known as the success fee, is not always a full 25%. It has a double cap in place to offer some protection to claimants. The success fee deduction is capped at 100% of the value of the actual costs Solicitors incur, or 25% of the compensation – whichever is the lower of the two figures. By way of example, if a claim settled for damages of £20,000 and a Solicitor had undertaken work to the value of £3000, then the most that they could deduct from the compensation would be £3000 whilst the full 25% would be £5000. In this case, £3k would be the lower of the two figures. Conversely if a claim settled for damages of £20,000 but a Solicitor had carried out work to the value of £15,000 the most they could deduct would be the 25% at £5000.

      There can be room to negotiate on the 25% from the clients perspective and this is something every claimant can discuss with their Solicitor before they formally instruct them to act for them.

    • Christine

      Thank you for asking your question – a very good one!

      The funding of cases is a very important issue and one that most claimants have concerns about.

      Firstly, we can confirm that any work undertaken by Direct2Compensation and our partner Solicitors is done so on a fully No Win No Fee basis. This means that if a claim fails – for any reason, there is no fee to be paid by the claimant.

      However, due to the requirements of the LASPO Act 2012 claimants are now obliged to pay a fee from their settlement towards the costs of the claims process. This fee is capped at 25% of the settlement award. This deduction covers any payment for injuries and previous losses but there is no deduction from any element of an award that covers future losses – such as loss of income or medical costs.

      The only additional fee payable is for any ATE insurance (After the Event) cover that was put in place in the claims process. Solicitors will always discuss suitable insurance cover with claimants before they obtain ATE cover for a claimant. As such, if there is existing (known as BTE – before the event insurance) cover in place a Solicitor will use that and there will be no ATE requirement and no fee. If no BTE cover is in place a Solicitor will have to purchase an ATE policy for the claimant. The claimant will be made aware of the cost of such cover before they agree to the same.

      I hope this helps, but if you would like to discuss this with us, please call us on 01225430285.

  24. I was paid £3,830 and the accident company took 25% from me and took other money from me £240 he said this money is not attendance fees and he took other one £200 he called the one VAT. I need you to tell what to do is this right

    • No attendance fees he’s talking about of £240 +VAT 200 I was not in the country then l travel out of the country and when I came back l didn’t see any letter from him

      • You need to take this up with the Solicitor who represented you urgently. If you don’t get a satisfactory response from them, you must complain via the Law Society within 3 months.

    • Without knowing what agreement you have signed and what the additional deductions you cite were taken for, it is difficult for us to comment.

      What I can say is that due to the LASPO Act 2012, it is now the case that successful claimants are obliged to contribute 25% of their damages towards the costs of the claim, paying nothing if they lose. The only additional deductions that can be made relate to the cost of insuring the claim against losing. If this is to be the case, claimants will have been asked to sign a mandate to this effect at the outset of the claim.

  25. hi, in 2014 i was in a car accident and have multiple injury, the other party insurers have admitted liability and i have legal costs on my insurance of £50,00 but my solicitor has me on a no win no fee agreement is this right?
    jim

    • James

      I am not 100% sure as to what it is you are asking here. Are you saying that from your settlement, that you are having to pay a fee for an insurance policy taken out during the processing of your No Win No Fee claim? If so, I can explain as follows.

      When you instruct a specialist solicitor to act on a No Win No Fee basis to pursue a claim for compensation, your Solicitor will need to insure you against the costs of the claims process – should you fail. The cost of the insurance (commonly known as After the Event Insurance or ATE) is never payable if your claim fails – the premiums range from around £150 – £450 pounds, but is largely a non-recoverable cost if you succeed with the claim. Therefore, it is common that people pursuing a claim have to contribute up to 25% of their settlement towards the costs of the claim (if they win) as well as paying the ATE insurance premium cost.

      You should not be paying any costs at all if your claim has failed. I would strongly suggest that you speak to your current solicitor and ask them to explain (in simple terms) what all costs/deductions you are faced with by succeeding with your claim.

    • Mark

      Sadly, Personal Injury Solicitors working on claims that are run through the ‘portal’ system as per the requirements of the LASPO Act 2012 have to deduct up to 25% from the compensation settlements of claimants who succeed with their claims. This is not something Solicitors wanted to do, but were forced to do by the way the Government opted to change the No Win No Fee personal injury landscape in April 2013.

      The 25% comes off the total settlement, including all the 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 Solicitors usually exclude treatment costs and leave those 100% intact but it must be noted that not all Solicitors take this view.

      The 25% deduction will not be taken from the element of a settlement that relates to future losses – for example future loss of earnings, disability on the labour market, future care, future treatment costs etc etc. It can ONLY be applied to past losses.

      Incidentally, and most confusingly, the success fee is not always a full 25%. It has a double cap to protect claimants as much as possible. The deduction is capped at 100% of the value of the actual costs the Solicitor who has won the claim has incurred, 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 a Solicitor had done work to the value of £3000, then the most they could deduct from the compensation would be £3000 although 25% would be £5000. However, as £3000 would be the lower of the two figures, the deduction would be capped there. Conversely if the claim settled for damages of £20,000 but it was a complex case and the Solicitor that won the matter had done work to the value of £15,000, then the most they could deduct would be the 25% at £5000.

        • Mark

          Unfortunately, there is no provision within the LASPO Act 2012 (and the Conditional Fee Agreement (No Win No Fee) framework) that we/Personal Injury Solicitors are obliged to work within that enables a successful claimant to recover the 25% deduction.

          Solicitors are willing to negotiate the deduction percentage rate on certain claims – particularly those where the value of the claim may be high or where the claim will require very little work so it is always worth having such a conversation with a solicitor during initial discussions about a claim before any agreement is signed.

          I hope that this helps.

          Yours sincerely

          Ian

  26. My son was injured and went to hospitol,they misdiagnosed his problem,slapped a plaster on him,and said see you in 6 weeks..we went back,removed plaster he had a deformity of 33% degree angulation to his arm..he was 15.. He has to have a hip bone graph and now is permanently deformed…it’s been going on for three years,but now I feel let down by my solicitor as it seems the 25% of compensation seems to be more than that..ie costs,barrister,im so unhappy and so very sad for my son…I feel that they are being greedy ..and he hasn’t won the case yet…he was 15 lost his future job,apprentice…and now it all seems so marred because we feel the solicitor hasn’t been totally straight forward…upset mother is am..

    • Anna

      Hi, I can understand why you feel upset, but it could be that you are not fully understanding how the charges and costs of your sons claim will be met? Of course, I don’t know the situation with your Solicitor and I would advise that you speak directly with them to find out what they are doing re making any deductions from your Son’s claim.

      The amount (if any) deduction that your Son’s Solicitor can take from any settlement will depend on the No Win No Fee agreement that was entered in to at the time of commencing the claim. You mention that it was 3 years ago. If the No Win No Fee agreement was signed BEFORE 1st April 2013, your son should be on a claim model that requires the Solicitor to take NO DEDUCTION from any settlement.

      However, if the claim was started on or after 1st April 2013, the No Win No Fee agreement would be different – because of the LASPO Act 2012, which reduced the amount of cost a claimant could recover and forced Solicitors to work on the basis that a deduction of 25% would be taken from any settlement awarded. The only additional costs that can be deducted are for insurance premiums if policies are needed to be purchased to enable to processing of the claim.

      I hope that this helps, but I would strongly suggest that you contact your Son’s Solicitor and discuss your concerns with them so that you are fully aware of the situation and know for sure, what (if any) deductions you should expect your Son to face.

      Yours sincerely

      Ian

  27. I agree that 75% of something is better than nothing, but it can’t be fair that the person responsible for causing me to need to use a Solicitor doesn’t have to pay my legal costs in full. I don’t think the Government acted fairly with this rule, letting the insurers have their cake and eat it at the expense of those claiming.

    • Hi Ash, thanks for commenting. Before this law became enforced, we (and many others within the industry) said that it felt unfair. Sadly we weren’t listened to and we’re now in this situation. It is what it is (as they say in America!) so we do our best to help clients get the maximum from their claim. In the end, they still end up with more than they would if they didn’t claim. I hope you were compensated properly for whatever happened to you and that you’ve made a full recovery.
      Best wishes!

      • Hi Ian
        Thank you very much for the answer
        The Supreme Court already decided that they, due to negligence and breach of health and safety made me allergic. The only question is if the loss of earnings stoped to be calculated from the date that I earned more then I use to earn at them. Basically for a financial year I’ve earned more then I use to do but now again less
        For that year make sense that I won’t have a loss of earnings but in this moment should be as I earn less
        Thank you very much for your time
        Regards
        Marius

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