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What Is A Success Fee?

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What Is A Success Fee?

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What Is A Success Fee In Personal Injury Cases?

As you may know, some solicitors offer a No Win No Fee agreement for their services if they decide to represent you during a personal injury claim. You might, therefore, be wondering how much you have to pay them if they win your case for you? Well, instead of paying an hourly rate for their work, you pay a success fee to cover the cost of their work. This is a percentage of the compensation you’re awarded. As the name of the service suggests, you don’t pay the success fee if your case is lost.

In this guide to success fees, we’ll look at what success fees are, what percentage of your compensation is deducted, and what sorts of personal injury claims you could make.

What Are Success Fees?

Where a No Win No Fee claim is won, the solicitor will be paid a success fee by the claimant. In the past, your solicitor could claim their success fee from the defendant (the person you claimed against) if you won the case. Importantly, that meant you could keep 100% of any compensation received. However, in 2013, LASPO or the Legal Aid, Sentencing and Punishment of Offenders Act 2012 came into effect. As a result, you must now pay the success fee yourself. Usually, you’ll pay a percentage of any settlement you are paid. When making a personal injury claim using a type of No Win No Fee agreement called a Conditional Fee Agreement (CFA), the success fee is capped at 25%.

Do Personal Injury Solicitors Offer Discounted Success Fees?

At the time LASPO was introduced, the expectation was that law firms would compete for business by offering a lower success fee percentage. However, generally, that hasn’t happened and as such, it’s likely you’ll pay a maximum of 25% of your compensation. When you read your CFA, the success fee should be clearly explained. If you’re not sure exactly how much you’ll pay, you should discuss this with your solicitor before signing.

Why Do Personal Injury Solicitors Take The Full 25% Success Fee?

No Win No Fee services essentially allow claimants to hire a solicitor without risking losing their own money when making a personal injury claim. This is important because, since LASPO was enacted, Legal Aid is no longer available for these types of claims.

Instead, the financial risk lies with the personal injury solicitor/law firm. Therefore, by charging the full 25% success fee, they can recover the cost of their work and mitigate their risk if the claim is successful. Importantly, the solicitor will not be paid at all if they fail to win compensation for you.

To keep their businesses running, solicitors who concentrate on personal injury claims must be efficient and successful. That’s why many law firms stick to the 25% cap allowed by the Ministry of Justice (PDF document).

What Is After The Event Insurance?

As we’ve said, if your claim is lost, you won’t have to pay your solicitor’s success fees. However, depending on your No Win No Fee agreement and the outcome of the case, you might incur other fees. For example, you might be told to pay the defendant’s legal costs. You could also have to pay your solicitor for their disbursements. Don’t worry, though, most personal injury claimants are protected by After The Event (ATE) insurance. This will be taken out before your claim starts to protect you from paying the costs.

If you would like to find out more on ATE insurance, give our claims team a call on 0800 6524 881.

What Parts Of My Compensation Will The Success Fee Be Deducted From?

In most cases, personal injury claims are split into two parts:

  • General damages are claimed for your pain, suffering and loss of amenity. This can be based on both physical and psychological injuries.
  • Special damages are used to claim back any costs you’ve incurred because of your injuries. They can include travel costs, care costs, medical expenses and lost income.

Success fees are deducted from both general and special damages based on past losses. Importantly, if your claim also includes an element of future loss (such as loss of future earnings for example), this can’t be considered for the success fee.

To prove how serious your injuries are, your solicitor will arrange a local medical assessment during your claim. This will be carried out by an independent medical expert. They will review your medical records, examine your injuries and talk with you about how you’ve been affected. Following the appointment, your solicitor will be sent a report to explain your prognosis.

Why Use A Personal Injury Solicitor To Claim Compensation?

To show what a personal injury solicitor does to earn their success fee, let’s take a look at the tasks they’ll conduct during a typical claim. They will:

  • Review your case with you to get a full understanding of what happened and how you’ve suffered.
  • Write to the defendant to tell them they are going to claim against them (they must acknowledge this letter within 14 days).
  • Collect evidence to support your case.
  • Arrange a medical assessment with an independent medical expert.
  • Send another letter to the defendant’s insurer to set out exactly why you believe their client caused your injuries. They will then have 3-months to conduct their own investigation.
  • Await their response and try to counter any objections with additional evidence.
  • Keep you up to date about how the case is progressing.
  • Try to reach an amicable agreement to prevent the claim from going to court. They will discuss any compensation offers with you and advise on whether to accept them.
  • Aim to achieve the highest amount of compensation possible for you.

As you can see, a lot goes into making a personal injury claim. It’s worth reiterating that our personal injury solicitors will do all of these tasks on a No Win No Fee basis.  This makes your claim a lot less risky.

You’ll only have to pay their success fee if you are compensated. If you are interested in starting the claims process with us, or would like to know more about success fees, call us today on 0800 6524 881.

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