At the start of the claims process, it is unlikely you will know whether you are going to be successful in your claim or how much you will receive in damages, so it is important to understand what it will cost.
In this article, we will explain:
- How personal injury claims are funded
- What “no win, no fee” means in practice
- Whether you may already have legal expenses cover
- What other funding options are available
What is a “no win, no fee” agreement?
A no win, no fee agreement means you will only pay your solicitor if your claim is successful.
It is important that everyone should have access to legal support to make a personal injury claim, which is why, provided your claim has good prospects of being successful, we will offer to progress it on a no win, no fee basis.
The majority of personal injury claims are funded on a no win, no fee basis. In this funding arrangement, a Damages Based Agreement is put in place. This provides that if the claimant is ultimately successful in their claim and compensation is recovered on their behalf, a percentage of that compensation will be deducted to cover the solicitor's fee. The percentage which is deducted is set by law and will depend upon the level of compensation, as follows:
- 20% for the first £100,000 of damages
- 10% for any damages between £100,000 - £500,000
- 5% for damages over £500,000
In the event the claimant is ultimately unsuccessful in their claim and receives no compensation, then the claimant is not required to pay their solicitor's fee.
This arrangement offers clients peace of mind, as it means that if their claim is unsuccessful, they won't have to pay legal fees.
What is After the Event (ATE) insurance?
Whilst no legal fees will be payable if the claim is not successful, there may still be outlays or costs which are incurred during the course of a claim which will require to be paid which the claimant will be responsible for. This includes the cost of obtaining reports from expert witnesses, medical reports or any costs the court require to be paid including the opponent's costs. To protect claimants from this risk, an After the Event insurance policy is often recommended. This is a type of legal expenses policy purchased after the injury occurred to cover any costs if a case is ultimately unsuccessful.
If the claim was unsuccessful, no insurance premium would be payable and the insurance company would cover any costs. This ensures the claimant can walk away from the process without paying anything and offers peace of mind and protection. In the event the claim is successful, the cost of the policy is deducted from the compensation, ensuring no upfront costs are payable at the outset of the claim.
Do I already have legal expenses insurance?
Many people have legal expenses insurance. We would always recommend you check to see whether you have this cover. Many mortgages and insurance policies, such as buildings, contents and car insurance provides legal expenses insurance, in addition to some credit cards. We would recommend you initially contact your insurers to discuss whether cover can be put in place. Whilst there will be a firm of solicitors on their panel, it is common that you will be entitled to nominate a solicitor of your choosing to act on your behalf to progress your claim.
Can I fund a personal injury claim privately?
It is possible to fund a personal injury claim privately. However, the cost of litigation can quickly escalate and so we would always recommend exploring alternative funding arrangements to protect the claimant's interests.
If you would like specific, tailored advice about a potential claim, please contact the MFMac Personal Injury Team or call 0131 247 1000 for a free, confidential discussion.
