How much does it cost to make a personal injury claim?
If you have sustained an injury that was not your fault, what funding options are available to you if you wish to seek compensation?
No Win, No Fee is the most common way to fund a claim
No win, no fee means that unless you win your case you do not pay solicitor’s fees. All personal injury solicitors will offer no win, no fee as an option.
If you do not win your claim, you are likely to be expected to cover the Defendant’s legal costs and disbursements (third party costs such as medical reports).
These costs can be covered by taking out 'ATE insurance'.
After the event (ATE) insurance is usually taken out in conjunction with the CFA at the beginning of the litigation process.
ATE insurance is designed to cover your opponent’s legal costs if you lose your case.
The combination of ATE insurance and a CFA gives absolute peace of mind that you won't be exposed to any unnecessary financial risk.
ATE insurance works in a different way to most other insurance policies. Referred to as a ‘self-insuring’ policy, you pay nothing up front 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..
If you win on a No Win, No Fee basis:
- 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% where there is a CFA. Read more about this.
If you lose on a No Win, No Fee basis:
- Your solicitor will not charge you a legal fee
- You will be liable for your opponent’s legal costs and disbursements, but these can be fully covered by ATE insurance
- Your ATE insurance will also cover your solicitor’s disbursements.
Damages Based Agreements (DBA)
Similar to no win, no fee, a damages based agreement means that the claimant will make an agreed payment (also capped at 25%) to the solicitor and/or barrister if they obtain a specific financial benefit.
The payment is usually calculated as a percentage of the compensation.
If the solicitor achieves a quick and easy result then, financially, DBA’s work in the solicitor’s favour as they won’t have done as much work.
If the case goes to trial, DBA’s work in the client’s favour (especially if the award is small) as the solicitor will have carried out more work.
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 insurance (BTE)
‘Before The Event’ (BTE) insurance differs from ATE insurance in that it is taken out ahead of suffering an injury rather than after it has happened. BTE is also referred to as 'Legal Expenses Insurance'.
BTE insurance can be offered either as part of, or as an optional extra to, motor, travel or home insurance, and is designed to cover any legal costs incurred by 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; a personal injury solicitor can look over your policy documents for you if necessary, to see where you stand.
This is also known as 'public funding', and is no longer available for straightforward personal injury claims.
Instead, Legal Aid covers the costs of family mediation, legal representation and legal advice in specific circumstances. It is for people who cannot afford to pay for legal costs themselves.
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.
Trade union funding
If you belong to a trade union, they may allow you free access to a solicitor as a membership perk; this could even be available to other members of your immediate family.
You may initially be offered a free consultation on your case with a personal injury solicitor, and if it is considered that you have a strong chance of winning, the 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.
Private funding or ‘Self funding’
Self-funding is, as it sounds, where you pay then solicitors fees yourself. Solicitors usually charge by the hour and fees soon 'rack up'.
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 your case is funded…
- 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
How can Quittance help?
Quittance is a panel of highly experienced personal injury solicitors. Our solicitors have an excellent track record of winning claims and will fight for the best possible compensation settlement for you.
To speak to us about your claim, without obligation, call 0800 612 7456 or click here to arrange a callback.