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Your Agreement with your solicitor
When you claim for personal injury you will have to sign an agreement with your solicitor. This contract is usually a “no win no fee” agreement (also called a Conditional Fee agreement or CFA for short).
This is the legal basis on which your solicitor has agreed to work and you have agreed to “pay” for that work.
“No win no fee” means that you only pay if you win your claim and not if you lose. So if you lose you have nothing to pay (although beware some CFAs will make you pay for any expenses the solicitor has incurred throughout the process such as medical expert fees or court fees).
You may be advised to take out After the Event insurance (often called ATE for short). Policies cover you if you lose your claim and have to pay the other side’s legal costs (other side means the person or company who was to blame for your injuries) or sometimes it will cover your own solicitors’ costs or expenses). If you agree to take out ATE the premium will have to be paid out of any compensation if you win and you will usually not have to pay it if you lose.
Costs from the other side
If you win your solicitor can claim a certain amount of their costs from the other side. However those costs might be fixed at a fairly low level and not cover your solicitors actual costs.
The CFA should set out the likely costs that your solicitor might incur and say whether the costs they might recover are likely to be fixed or not. It should explain when you might have to pay costs to your solicitor and what those costs might be.
Many solicitors use high hourly rates and spend a lot of time on a case (often a lot more than can be recovered from the other side, especially if these are fixed) and then charge you for the shortfall between their costs are what they received in costs from the other side.
The success fee
The success fee is a figure which the solicitors are allowed to charge and is set out in your CFA as a % of their base costs. Remember these are the costs your solicitors has incurred and may be particularly high if they have used a high hourly rate or spent a lot of time on the case.
The success fee % is usually based on the risk of losing and therefore not getting paid so a claim with a low risk of losing (eg a road traffic accident with a rear end shunt) will usually only warrant a low % (the courts have applied 15% in some cases). The courts have said that in theory a success fee could be set at a rate that bears no relation to the risk and be reasonable provided you are fully aware of the rate, . Whatever it is based on it needs to be explained in the CFA so that you understand it.
Many solicitors apply a success fee of 100% which is rarely justified on risk alone.
If your solicitors’ costs are high then the success fee amount will also be high (even more so if the success fee is 100%).
By law the success fee cannot exceed 25% of your compensation. Many solicitors aim to get their success fee high enough so that they can always hit or exceed the cap and take 25% of your compensation (this is usually through a combination of high hourly rates, lots of time and a high success fee % such as 100%).
“Shortfall and success fee cap”
Many solicitors will agree to cap the total amount of their success fee and shortfall at 25% of compensation. Which is fair enough provided the shortfall and success fee themselves are reasonable.
Why use Sentinels Solicitors for my personal injury claim?
- We base our success fee on risk and this will not be more than 25% of the costs.
- We will advise you if your claim is likely to attract fixed costs from the other side if you win.
- We do not use artificially high hourly rates to bump up our costs.
- We use senior solicitors (with more than 25 years experience each) so your claims are handled speedily keeping costs down.