There are various ways of funding a Personal Injury claim. Some Claimants have legal expenses through their household insurance policy and if the insurer takes the view that the claim has merit, funding through such a policy might be available. In addition, Trade Union members sometimes have the benefit of legal expenses through their Trade Union membership
Legal Aid is not now available to pursue a Personal Injury or Clinical Negligence claim and in the absence of the above forms of funding, lawyers will quite often act for Claimants on a Conditional Fee basis. This is more popularly known as a “no win no fee” agreement. Under such an agreement, if the lawyer takes the view that the claim has sufficient merit, he or she will agree to act on a Conditional Fee basis. Under such an agreement, the lawyer agrees to waive his or her costs if the claim is unsuccessful but if the claim is successful, the lawyer will be entitled to charge a success fee (in addition to recover costs from the Defendant). The success fee is between 0-100% of the lawyers’ basic costs incurred during the claim and is capped at a maximum of 25% of the Claimant’s damages and past losses. The success fee is not deductible from any future losses.
Prior to 2013, the success fee was recoverable from the Defendant insurers. This changed in 2013 when it had to be deducted from the Claimant’s settlement.
With Conditional Fee Agreements, we always advise the client that we also take out on their behalf what is known as ‘After The Event’ insurance. The purpose of the insurance is to indemnity the Claimant in the event of the claim being unsuccessful and the Claimant being ordered to pay the Defendant’s legal costs. This scenario could arise if the Defendant made a Part 36 offer. If that offer (which could be in relation to liability or the value of the claim), is not beaten by the Claimant then the Claimant would be ordered to pay all of the legal costs incurred by the Defendant, 21 days from the date of the offer. The insurance that we take out on behalf of the Claimant covers the Claimant for up to £100,000 of legal costs and disbursements. The insurance premium is not recoverable from the Defendant and if the claim is successful the premium is deducted from the Claimant’s compensation. If the Claimant is not successful then the premium is not payable by the Claimant.
We have successfully acted for many Claimants on a Conditional Fee Agreement basis and this is a popular means of funding claims, as the Claimant does not need to worry about having to pay any costs in the event of the Claimant being unsuccessful.