Recent changes in the law* have affected the way that compensation claims operate for personal injury and medical negligence claims, particularly for those up to £25,000. The changes mainly affect how much of their costs a client can claim back from the other side and, consequently, whether or not a client can expect to keep 100% of any damages recovered on their behalf.
Instead of keeping 100% of any damages won, a claimant may have to pay a percentage to their lawyer. To avoid this and to ensure there are no deductions from any compensation, and you keep 100% of any damages you win, there are five essential questions to ask a lawyer before you agree to let him or her handle your claim.
1 – Do you offer a genuine no-win no-fee service?
The answer should categorically be “YES”. Your lawyer should be able to assure you that the firm he or she works for offers a genuine no-win no-fee service and that you don’t pay a penny to your lawyer if you lose.
2 – Will I keep 100% of any damages won if my claim for personal injury or medical negligence is successful?
Again your lawyer should be clear as to whether you will keep 100% of any money you get – no deductions to cover legal services – from any damages you win through a successful claim for compensation for personal injury or medical negligence.
3 – Who pays my lawyers costs?
If your claim is successful, your lawyer will be paid by the defendant or the defendant’s insurer. The lawyer will be paid a pre-determined capped amount in most claims up to £25,000. If your claim is not successful, your lawyer should guarantee that you will not be charged a penny.
4 – Will my lawyer charge me a success fee?
This is a key question to ask. Lawyers can charge you a success fee of up to 25% of the value of any damages recovered, but it is up to them whether or not they do so. The rest of your costs are usually paid by the defendant or the defendant’s insurers.
5 – Why do I need a lawyer – shouldn’t I just deal directly with the defendant’s insurers?
Increasingly, some insurance companies are urging claimants to settle direct with them. But in my firm’s experience this often means claimants are offered much less compensation than that to which they are really entitled. After all, there is an obvious conflict of interests: insurance companies want to pay the least possible to claimants. If in any doubt, always seek the advice of a qualified lawyer who will usually achieve much better settlements for claimants than the amount offered by a defendant’s insurance company.
You might also ask: why do I need to ask this all these questions?
The answer is that the recent changes in the law* mean some lawyers are now starting to demand a percentage of any damages won in personal injury and medical negligence cases which could mean you end up with less money.
To shed more light on this it’s helpful to know that before April 2013, if a claim was successful, the claimant’s lawyer’s services were paid by the defendant – usually the defendant’s insurance company. In addition, the claimant’s lawyer could also receive a “success fee” an uplift or additional payment (which varied depending upon the type of case in question) from the defendant. The other side’s costs could also be covered by an insurance policy which paid for itself if it had to be used, and the cost of that policy was also payable by the defendant. The result was that the claimant’s lawyer was paid for his or her work and any related expenses. If a claim was not successful, the lawyer – who took on the risk or losing when taking on the case – would write off the time spent on the case and any costs incurred, and would claim for any expenses from the related insurance policy (with the policy effectively writing itself off).
Under the new system, in operation from April 2013, in many claims cases, particularly road traffic accidents and claims up to £25,000, there is now a cap on the amount lawyers can be paid for their services. For road traffic accidents this has been fixed at £500 (down from £1200). In addition, the success fee and the cost of taking out an insurance policy to cover any court costs cannot be recovered from the losing defendant.
The effect of these changes is that some lawyers will expect claimants to use any compensation won to pay towards the cost of their legal services and to cover the costs of any insurance policy to meet court proceedings. Importantly, you should know from the start exactly where you stand and what to expect.
Finally, at a law firm like Neil Hudgell Solicitors and at any other reputable personal injury or medical negligence specialist, any initial consultation to assess your claim is always free. Despite all the changes afoot at the moment, we are determined to continue to offer all our clients access to justice by delivering a genuine no win, no fee service with no deductions to your compensation.