How much does it cost to make an injury claim?

If you have sustained an injury that was not your fault, you may decide to make a compensation claim. The most common way to fund a claim is with a no win, no agreement - but there are alternatives. This article explains the options and cost implications of making a personal injury claim.

No win, no fee

No win, no fee removes the financial risk and is the most common way for a claimant to make a personal injury claim. Under a no win, no fee agreement you will have no legal fees to pay if your claim is not successful.

Without a no win, no fee agreement (technically known as a Conditional Fee Agreement (CFA)) you would have to cover the defendant’s legal costs and injury claim disbursements.

These costs can be covered by taking out After the Event (ATE) insurance.

How does After the Event (ATE) Insurance work?

After the Event (ATE) insurance is a key part of any no win, no fee agreement when making an injury claim. This specialised type of insurance is so named because it is taken out after the incident that gave rise to a personal injury claim.

After the Event (ATE) insurance is designed to protect personal injury claimants against the financial risk of making (and losing) a no win, no fee legal claim.

Without ATE insurance, you would be liable to pay the defendant's legal fees, costs and disbursements, if your claim is not successful. You would also have to pay your own expenses, such as travel costs, medical reports, and barrister's fees.

Together with a Conditional Fee Agreement (CFA) - the legal term for a 'no win, no fee agreement' - ATE insurance gives you complete peace of mind that whatever the outcome of our claim, you will not be out of pocket.

ATE insurance works in a different way from most other insurance policies. Referred to as a ‘self-insuring’ policy, you pay nothing upfront for the premium, nothing if you lose your claim, and the cost of the policy (not usually expensive) if you win.

The cost of the policy is then deducted from your compensation settlement.

Your personal injury solicitor will advise you of, and obtain the best ATE policy for you when you start your claim.

Read more about ATE insurance

If you win a no win, no fee claim:

• The defendant will pay all or most of your legal fees.
• If any costs cannot be recovered from the defendant, they may come out of your compensation award.
• The ATE insurance policy should also cover any disbursements that cannot be recovered from the defendant.
• You will pay your solicitor a success fee (capped at 25% by the MOJ) which is deducted from your compensation.
• General damages awards are increased by 10% for claims funded with a CFA.

If you lose a no win, no fee claim:

• Your solicitor will not charge you any legal fees.
• You will be liable for the defendant's legal costs and disbursements, but these costs will be paid by your ATE insurance.

Read more:

How does no win, no fee work?

Why do most personal injury solicitors charge the maximum 25% success fee?

Damages-Based Agreement (DBA)

Similar to no win, no fee, a Damages-Based Agreement (DBA) is where you agree to pay an agreed amount to your solicitor and/or barrister if they obtain a specific financial benefit. DBA's are also capped (by law) at 25% of the compensation settlement or award.

The solicitor's payment is usually calculated as a percentage of the projected compensation. If the case settles quickly, a DBA can be financially beneficial for the solicitor as they won’t have done as much work.

If the defendant denies liability and your case drags on, perhaps going to court, under a DBA your solicitor will have to carry out more work than they might have initially estimated - for the same fixed fee.

Read more:

Will my personal injury claim go to court and what if it does?

DBA’s are rare, but if you are offered one and you think your damages will be high, then a CFA is probably a better option.

Before the Event (BTE) Insurance

Before the Event (BTE) insurance differs from ATE insurance insofar as it is taken out in advance of an accident. BTE is also referred to as Legal Expenses Insurance.

BTE insurance is typically offered as an optional extra with motor, travel, or home insurance. BTE insurance is designed to cover any legal costs incurred when defending or making a claim.

BTE insurance may also be offered as part of a credit card agreement or bank account.

If you have a BTE insurance policy, you may not need to enter into a No Win, No Fee agreement depending on the terms and limits of the policy you have.

BTE insurance may not be sufficient to cover the costs of larger claims, however. If you think you hold a suitable BTE policy, ask a personal injury solicitor to check your policy documents to confirm whether you are covered.

Legal aid

Legal Aid (also known as 'public funding') is no longer available for most personal injury claims.

Instead, Legal Aid covers the costs of family mediation, legal representation and legal advice in specific circumstances. Legal Aid is only available for people who cannot afford to pay for legal costs themselves.

When is Legal Aid available?

The Gov.uk website states that you could get legal aid if:

• You or your family are at risk of abuse or serious harm, for example domestic violence or forced marriage
• You’re at risk of homelessness or losing your home
• You’ve been accused of a crime, face prison or detention
• You’re being discriminated against
• You need family mediation
• You’re adding legal arguments or bringing a case under the Human Rights Act.

Legal aid is means-tested, and may require a financial contribution from the client.

Read more:

Can I get legal aid for a personal injury compensation claim?

Trade Union Funding

If you belong to a trade union, your membership may grant you free access to a solicitor as a perk. This free access may even extend to members of your immediate family.

You may be offered a free initial consultation on your case with a personal injury solicitor. If the solicitor thinks you have a good chance of winning, your trade union could fund the entire case for you.

You may also be provided with insurance to cover costs should you lose the case.

The conditions of the funding available to you will depend on which trade union you are a member of.

Self-Funding

Self-funding is, as it sounds, where you pay your solicitor's fees yourself. Solicitors usually charge by the hour and fees soon 'rack up'.

As a self-funder. if you win your case you would not have to pay a success fee.

If you lose your case you would have to pay all of your legal costs and disbursements as well as those of the defendant.

For this reason, self-funding is not a popular way to fund a claim.

However you decide to fund your claim…

• Ask for regular updates from your personal injury solicitor on any costs being added to your case
• Remember that it is possible that costs will be deducted from your compensation award
• Be sure you are completely clear on what you may be expected to pay before you proceed with your claim

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Author:
Gaynor Haliday, Legal researcher

About the author

Gaynor Haliday is an experienced legal researcher and published author. She has had numerous articles published in the press and is a legal industry commentator.