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Success Fees Explained

If you’ve been injured in an accident that was somebody else’s fault, you might decide to make a personal injury claim. For many, that comes with the fear of losing money if the claim fails or having to give up most of their compensation to pay for a solicitor. However, success fees are used by solicitors that offer a No Win, No Fee service to make claims a lot less financially risky for claimants. But what is a success fee and how much of your compensation will be deducted? In this article, we’ll explain why success fees exist and how they work in personal injury claims.

If at any point you have any questions while reading this article, you can speak to one of our advisors for free advice. If you’re looking to claim, they’ll review your case for free and discuss your options. Furthermore, if your claim is strong enough, one of our personal injury lawyers may agree to represent you on a No Win, No Fee basis. That means you’ll only pay a success fee if you receive a compensation payment.

To talk to one of our specialists right away, please get in touch on 0800 652 1345. Otherwise, if you are wondering “what is a success fee?”, please read on.

What are personal injury claims?

Before we look at when you need to pay a success fee, let’s rewind and explain when you might be entitled to make a personal injury claim.

Our personal injury solicitors work on cases where:

  • The claimant was owed a legal duty of care by the defendant; and
  • The defendant was negligent and caused an accident; and
  • The claimant sustained injuries during the accident.

If your claim meets the criteria set out above, you could be eligible to claim on a No Win, No Fee basis. This is where the solicitor takes on most of the financial risks involved with claiming rather than the claimant.

Some of the most common claims made on this basis include:

Usually, these types of claims will be made against an insurance policy held by the defendant. In many cases, insurers will try to deny liability for the accident and your injuries. This is where using a personal injury lawyer can really help. If you have specialist representation, we believe you stand a better chance of a) winning your claim and b) being compensated fairly.

How do No Win, No Fee agreements work?

If you had to pay a solicitor in advance to represent you in a personal injury claim, the chances are that you might go it alone or decide not to claim at all. That’s why many offer No Win, No Fee agreements for personal injury claims.

Rather than paying the solicitor for their work upfront, you’ll agree to a success fee if compensation is paid.

Once you and your solicitor have agreed to work together, they’ll send you a Conditional Fee Agreement (CFA). This is one of the most common forms of No Win, No Fee agreements used in personal injury claims.

The CFA will explain what your solicitor will do for you. This includes:

  • Gathering proof to support your claim.
  • Arranging for medical reports to be obtained.
  • Filing the claim with the defendant and/or their insurers.
  • Dealing with the defendant’s insurers on your behalf so you don’t face any difficult questions yourself.
  • Arguing your case and providing additional evidence if needed.
  • Attempting to secure the maximum possible compensation possible for your suffering.

As you can see, that’s a fair bit of work that the solicitor is doing without advance payment. That’s why, realistically, No Win, No Fee solicitors only take on personal injury claims if they have a reasonable chance of success.

If the claim is won and compensation is paid, your solicitor will deduct a success fee from your settlement. If the claim fails, you do not have to pay a success fee.

What is a success fee in personal injury claims?

When you sign a CFA, you agree to allow your solicitor to deduct a fixed percentage from your compensation if the claim is won. This is called a success fee.

Legally, success fees are limited to 25% of your settlement when using a CFA. The fee is used to cover your solicitor’s work and costs accrued during your claim. The success fee percentage you’ll pay is clearly listed in your CFA before you sign it.

Why do success fees have to be paid?

In the past, winning a personal injury claim meant that the defendant would have to pay all of your legal costs. However, following the introduction of the Legal Aid, Sentencing And Punishment of Offenders Act 2012, things changed.

Since the new law was enacted, it is only possible to recover some legal fees from an unsuccessful defendant. These do not include the cost of your solicitor and this is the reason why success fees were introduced.

Many legal professionals would agree that this is not fair but it is the law as it stands today. To reduce the burden on the claimant slightly, the legislation led to a 10% increase in personal injury compensation for many injuries.

Can you pay less than a 25% success fee in a personal injury claim?

When success fees were introduced, the idea was that personal injury solicitors would compete for business and as such lower the success fee percentage. However, due to the complexity of claims and the risks involved with No Win, No Fee claims, it’s not unusual for solicitors to stick to the 25% success fee limit.

The best way to find out what success fee percentage you’ll be offered is to get in touch. If one of our solicitors takes on your case, your contract will show you the success fee they agree to work for.

What happens if you lose a No Win, No Fee claim?

The reason why No Win, No Fee agreements are popular is that claimants don’t want to lose money if the claim fails. As we’ve already explained, if your case doesn’t work out in your favour, you won’t need to pay a success fee to cover your solicitor’s costs. But what else might you be charged for?

Well, if your claim is lost, you might be liable for the defendant’s legal fees. As you can imagine, these could be quite costly.

No Win, No Fee means just that. As such, insurance is put in place at the start of your claim to protect you from having to pay such fees if your claim is unsuccessful.

If you have legal expenses cover on your home or motor insurance policy, for example, this could be used to protect you. If not, your solicitor could arrange for an After The Event (ATE) insurance policy to be taken out before the claim begins.

This should mean that you’re not left out of pocket when claiming compensation on a No Win, No Fee basis.

What other costs might be deducted from my settlement?

The success fee you’ll pay if your claim is won will cover your solicitor’s work and associated costs. However, you may also have the cost of your ATE cover deducted from the settlement as well. Additionally, you could be asked to cover the cost of any balance of any expenses not recovered from the defendant.

Your solicitor will go through exactly what you might need to pay if your claim is won at the beginning of the process. As always, it is worth checking everything contained within your No Win, No Fee agreement before signing.

Do No Win, No Fee claims end up in court?

When a personal injury solicitor reviews a potential claim, they’re trying to establish the chances of winning compensation for their client. That means they’ll review the evidence and reason for the claim in fine detail and only usually accept claims with a high chance of success.

In our experience, that means that very few claims need to be heard by a court. As you can imagine, court hearings are expensive and time-consuming.  If solicitors had to factor these costs into the success fee, many claims simply wouldn’t be viable.

As such, our solicitors will always try to secure out-of-court settlements with the defendant’s insurers. However, if a fair offer cannot be reached, they are willing to ask the courts to intervene where necessary.

Contact us about success fees today

We hope that this article about success fees has helped. If you need further advice or would like to talk to us about a claim, please call our advisors on 0800 652 1345. During your free initial consultation, your questions on personal injury claims and success fees will be answered and you’ll receive guidance on your potential next steps.

If you need a further explanation about success fees or have anything else you’d like to ask, please feel free to connect to our live chat service.

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