Funding for Personal Injury claims underwent very significant changes in April 2013. Now claimants cannot recover all of their costs from defendants.
But in claims where the claimant has not been dishonest, if the claimant loses, he pays no costs. Prior to April 2013 the loser picked up the bills. Now it is a bit more complicated.
You can agree to pay your own solicitors whatever the result or only if you win. The arrangement where you only pay if you win is called a "Conditional Fee Agreement (CFA)", but is colloquially referred to as "no win, no fee".
In this arrangement the solicitor takes on the risk with you and you work together to achieve the end result. In return the solicitor is also entitled to seek a success fee if you win. Legal costs generally cover the following (this list is not intended to be exhaustive):
- The time spent by a solicitor working on your case
- Court fees
- Services provided by experts (e.g. medical reports)
- Accident Report fees (usually Police Accident reports)
- Travel expenses
- Barrister's fees
- Legal expenses insurance fees.
Damages Based Assessment
Under a CFA a solicitor cannot take more than a total of 25% of your costs as a success fee. Usually with a CFA where the client and the opponent have been reasonable (especially on larger cases) the fee will often come in lower than 25%. A “Damages Based Assessment” (DBA) is where the solicitor takes 25% no matter how little or how much work the solicitor has done.
As a firm we do not offer the DBA for two basic reasons. The first is that whilst very few of our clients want to switch firms, they should be able to without being hit for 25% of their award, by us, and then another fee by their second firm. The second is that clients who co-operate will often pay less than 25% and it seems a bit wrong to us for solicitors to be paid for work they have not done.
Some reputable law firms do offer DBA’s but we think they are potentially unfair. The solicitor has to offset his costs against damages up to settlement but with a DBA a dishonest or shady solicitor can spin the case out so your losses to settlement are greater and therefore his fee goes up. That is our view, which we know is not universally held, but most specialist firms do tend to avoid these agreements. However it is important to remember that solicitors also need to resist the temptation to settle too early, in case further problems surface.
Put at its bluntest, if you don’t trust your solicitor, change. That temptation to string cases out or settle too early is a lot less with other arrangements like the CFA.
Legal Expenses Cover
You can insure against the other side's costs under a " Legal Expenses Insurance (LEI)" policy. In pretty well all circumstances we pay for this and take it out of our success fee.
If you do not already have a policy then you are only likely to find someone who will insure you if you have a cast-iron case, are prepared to pay an extortionate premium or you use a specialist solicitor who is trusted by the legal expenses insurer and recommends they provide cover (we have an arrangement with a leading Legal Expenses Insurance provider that they will provide cover on every case we recommend to them, with very few exceptions - the big one is that the accident happened more than two years and nine months prior to you instructing us).
An LEI Policy covers you for the risk of the defendant’s making an offer which at the time seems too low, but at trial the judge orders the same sum or less. It happens.
Unless you take every offer without fighting it is inevitable that even the best solicitors will call some of these cases wrongly or have a bad day in court. Witnesses can collapse, medical experts can come up with differing views or the court might just prefer the defendant’s case.
What you don’t need is a solicitor who loses his nerve at the first offer, or the second, or even the third. You need a solicitor who holds his or her nerve until the money is right at his own risk, not yours.
We fund this insurance policy in just about every case we take on, so we are the ones taking a risk by fighting on. We can afford to “gamble” our fees – because we won’t get paid for work done after an unbeaten offer. We can take a risk – we deal with numerous cases and have our professional reputation to bear in mind. You have one case - you shouldn’t be taking a chance.
Of course the insurers and their solicitors know which weak law firms always take an offer and really pressure their clients to take poor offers. We take over many cases from these claims cowboys who are unprofessional and only worried about their own fees. We have a reputation for not blinking until what is on the table is a good settlement in front of a decent judge at trial. That is a reputation we don’t want to compromise. And with the confidence that goes with being genuinely experienced in motorcycle trials, we won’t panic just before a trial.
The firm is headed by a trial solicitor. We prepare our cases for trial. If going to trial means our hourly fee is reduced (which does happen) then so be it. We live with that. Our reputation is worth more to us than our fees.
Opponents know if they are against White Dalton Motorcycle Solicitors they had better pay up properly or expect to go to court. So as part of our reputation management we will take a hit on fees to avoid being manipulated into under settling cases.
If a law firm says it will not touch your damages then you can be sure it cannot make a living and therefore isn't using a real solicitor. Your claim is probably being processed by unqualified administrators and that's why they are incentivised to take the first offer on every case.
If you have a tiny little case with no real injury and you can calculate your own losses then you are not taking a big risk using these unqualified claims factories. An injury which could have any serious impact requires a qualified solicitor.
In the same way as the dentist's receptionist can be very efficient at the job she is trained for, you'd want the actual dentist to fix your teeth, because he or she is a degree-level educated and professionally qualified dentist. You wouldn't want a "tooth handling executive" doing your dental work. It is the same with the law.
Where you are liable to pay legal costs then you are entitled to ask the court to assess what is a fair and reasonable amount. Such issues are complicated and it is likely that you will need legal advice on this area, even if it is an argument with your own solicitors.
We regularly get asked to help people who have used non-specialist solicitors, lost their case and are being hit with big bills both from the other side and their own solicitors. To date we have never failed to have those costs reduced. If you are being asked to pay legal costs and want a free, no obligation initial discussion on this then please contact us.