Supreme Court rules that solicitors cannot deduct fees without the claimant's consent
In a landmark ruling (Oakwood Solicitors Ltd v Menzies), the UK Supreme Court has confirmed that personal injury claimants must give explicit consent before any deductions are made from their compensation for solicitors' fees. This decision strengthens the rights of people making personal injury claims, by ensuring that solicitors can't take fees without permission.
If you're pursuing a personal injury claim, it's important to understand how this ruling protects you and how it could affect the amount of compensation you receive.
What does the Supreme Court ruling mean for claimants?
The ruling states that solicitors cannot deduct fees from a claimant's compensation without their consent. This means you, as the claimant, must agree to any deductions before settlement.
Previously, some solicitors may have deducted fees without a clear agreement. This ruling eliminates such practices, protecting claimants from unexpected legal deductions and ensuring that claimants understand and consent to what the final settlement amount will actually be.
Why is consent for fee deductions important?
Consent to fee deductions means your solicitor must make you are aware of all the legal costs involved. This allows you to make informed decisions about legal fees and understand how much of your settlement will be retained.
This safeguard protects your financial interests, ensuring you have control over legal decisions around your claim, and avoids any surprises when your claim is finalised.
Will the ruling affect your compensation?
This ruling means no fees can be deducted from your settlement unless you agree. In practical terms, this ensures that you will not be caught off guard by deductions you weren't expecting.
Effectively, solicitors are now required to provide a breakdown of fees before finalising your claim, giving you the opportunity to challenge or negotiate certain costs.
Your claim cannot be settled until you consent to the fees your solicitor intends to deduct from your compensation.
Read more:
How much injury compensation can I claim?
What to do if a solicitor tries to deduct fees without your consent
If a solicitor attempts to deduct fees without your consent, you are within your rights to challenge deduction. Here’s what you should do:
- Request an explanation: Ask for a breakdown of fees and an explanation of why deductions were made without your agreement.
- Check your agreement: Review your Conditional Fee Agreement (CFA) or other signed documents for the fee arrangement details.
- Raise a formal complaint: If you're not satisfied with the explanation, submit a formal complaint to the firm.
- Contact the Legal Ombudsman: If the issue remains unresolved, escalate it to the Legal Ombudsman for investigation.
- Consider changing solicitors: You can switch solicitors at any time if you feel your best interests aren't being served.
If you have already consented to certain fees, e.g. by signing the CFA, the Supreme Court's ruling does not empower you to refuse consent you have already given.
Although your solicitor cannot unreasonably delay the settlement of your claim until you give consent, you also cannot unreasonably withold consent for fees until your solicitor agrees not to charge them.
The main purpose of this ruling is to improve fee transparency between claimants and their solicitors, not to prevent solicitors from making reasonable deductions.
Read more:
What is a Conditional Fee Agreement (CFA)?
Check your solicitor's fees before you instruct
To avoid misunderstandings about fees, ensure you communicate clearly with your solicitor from the start of your claim:
- Ask for a clear fee breakdown: Before signing any agreement, request a detailed explanation of the fees, including success fees and disbursements.
- Get everything in writing: Make sure you receive a written fee agreement, including details of any potential deductions.
- Stay informed: Keep track of your case’s progress and any updates related to costs.
- Discuss concerns early: Address any fee-related concerns as soon as they arise.
- Request final approval: Before your case is finalised, ensure you review and approve any deductions in writing.
By following these steps, you can ensure your solicitor acts transparently, protecting your financial interests and ensuring you receive the compensation you're entitled to.
Read more:
How does a No Win, No Fee injury claim work?
Author:
Chris Salmon, Director
About the author
Chris Salmon is a co-founder and Director of Quittance Injury Claims. Chris has played key roles in the shaping and scaling of a number of legal services brands and is a regular commentator in the legal press.